SEOUL, September 14 (AJP) - South Korea's Samsung and LG will make a combined 1.9 trillion won ($1.4 billion) in early payments to suppliers ahead of the Chuseok holiday, seeking to ease cash-flow pressures on smaller business partners during a period of increased funding needs.
Samsung said Monday that 13 affiliates, including Samsung Electronics, Samsung C&T and Samsung Biologics, will pay a combined 1.3 trillion won to suppliers about seven days earlier than scheduled.
The amount is about 110 billion won more than Samsung provided ahead of last year's Chuseok holiday.
LG, meanwhile, will make 600 billion won in early payments through eight affiliates, including LG Electronics, LG Energy Solution, LG Chem and LG Innotek. Payments will be made as much as 13 days ahead of schedule.
Large Korean companies routinely accelerate payments to smaller suppliers ahead of major holidays, when demand for cash can rise as businesses face expenses including raw-material purchases and employee bonuses.
LG also operates about 1.2 trillion won in financial support programs through seven affiliates, including funds and direct lending that allow suppliers to access interest-free or low-interest financing.
Both conglomerates are taking additional measures aimed at supporting smaller businesses and local economies during the holiday period.
Samsung is operating an online marketplace for employees featuring regional specialties, agricultural products and goods made by small and midsize companies that participated in Samsung Electronics' smart-factory program.
Seventeen Samsung affiliates are participating in the marketplace, with employees typically purchasing about 3 billion won worth of products during the Lunar New Year and Chuseok holiday periods combined each year.
LG affiliates, meanwhile, plan to provide daily necessities and conduct volunteer activities for vulnerable communities during the holiday.
- Samsung and LG will separately make a combined 1.9 trillion won in early supplier payments ahead of Chuseok, including 1.3 trillion won from Samsung and 600 billion won from LG.
- Samsung will bring payments forward by about seven days, while LG's eight participating affiliates will make payments as much as 13 days early.
- The companies are also providing additional support to smaller businesses, including Samsung's holiday marketplace and LG's 1.2 trillion won supplier financing programs.
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