[Sponsored Report] With Kepco seal and aid, SMEs get a boost abroad
Korea Electric Power Corporation (Kepco) announced yesterday an innovative support plan for its small- and medium-sized affiliates.
Altogether some 500 participants, including Kang Chang-il, chairman of the Knowledge Economy Committee of the National Assembly, Yoo Jang-hee, chairman of National Commission for Corporate Partnership, Chung Jae-hoon, deputy minister for Industrial and Economic Policy at the Ministry of Knowledge Economy as well as executives of affiliated small and medium enterprises, attended the shared growth policies presentation and announced the 15 plans to effectively support the SMEs.
The executives of Kepco and SMEs also held a discussion session to exchange ideas on the support policies among other issues.
The 15 areas of support include exploring overseas market, reducing the entrance barrier and reinforcing supporting businesses.
For new overseas market exploration, Kepco provides a Kepco seal of approval dubbed Kepco Guaranteed Brand for the export products from the SMEs. The product guarantee assists SMEs with strong export potential to break into foreign markets by helping them with the challenges of brand recognition.
With the launch of Kepco Guaranteed Brand this year, some 50 companies will benefit from the seal of approval by the state-run energy corporation, and the number of beneficiaries is set to grow.
Some of the more direct cooperative measures of support include advanced networking and potential buyer matching, which Kepco is planning by activating export-inducing business using the Kepco brand.
The company is also planning to expand its financial support to SMEs up to 100 percent from the current 50-70 percent.
A business support model spanning areas in engineering, procurement and construction (EPC) is aimed at helping lesser known SMEs, which have advanced technology and knowledge and lack experience in overseas markets, by offering opportunities for SMEs to participate in Kepco projects. The various opportunities will be offered for the local manufacturing and construction companies.
For SMEs without extensive overseas networks, Kepco will open up its overseas branch offices and subsidiaries to the SMEs for the use of office space as well as offering consulting in exports and marketing as well as and local market information.
Kepco’s overseas electricity appliances purchase information system is designed to share valuable market research findings with the SMEs.
To add to the information database, Kepco collected data on voltage, frequency and other kinds of restrictions of the countries they have already advanced in as well as the business environment and unique features and standards of the appliances that are currently being used.
Reducing the entrance barrier
By reducing the advance registration requirement, Kepco is planning to provide more opportunity for SMEs to deliver its goods as long as they are of proven quality. The eligibility standard will also be reduced as well to widen the door of opportunity for SMEs. In addition, to help with sustainable domestic sales of the companies lacking wide networks, Kepco will purchase products, engage in construction projects and give orders to SMEs this year. The project is estimated to be 5 trillion won ($4.6 billion) in scale.
SMEs that produce quality products and possess advanced technology but are facing difficulty in generating enough profits as they are not registered will benefit from Kepco’s Big Mall event. The event offers an opportunity for SMEs to promote and sell their products. Kepco will also display the items it uses to offer opportunities for sale. It also aims to modify the purchasing standards to help lower entry barriers for SMEs.
Reinforcing business support
R&D support activities for SMEs will be strengthened as well.
The scale of the research and development support business for its affiliated SMEs - which was within 500 million won of within 75 percent of the total R&D cost - will be increased to a whopping 1 billion won, and new supporting business model for cooperative R&D business will be launched as well.
Currently at Kepco various kinds of advance payment and contract incentives is paid 100 percent in cash to its large corporate affiliates, but they still issue promissory notes to their subcontractors.
To rectify this unjust practice and to induce cash payment to subsidiaries and subcontractors, a new system to manage the subcontractor payment cash account and real time cash payment check system will be introduced.
In the cases where the contract is worth over a certain amount of money, the companies will need to submit a confirmation to make the payment in cash and there will be a promissory note receipt report center operated separately.
Kepco will also support mentoring to utilize the accumulated research resources in technology mentoring and to help the competitive ideas of SMEs to become a product.
For this, Kepco has organized the R&D mentor team with researchers. It will offer support to SMEs by sending experts in the specialized field to the companies, and it will also develop and operate education courses.
Cho Hwan-eik, president and CEO of Kepco, promised his steadfast support in the series of initiatives to help SMEs by illustrating his philosophy. He emphasized his belief in the importance of shared growth based on mutual trust and integrity by mentioning the African philosophy of “Ubuntu” meaning “I am because you are.”
He promised that Kepco will conduct genuine communication with cooperative spirit and will actively promote shared growth with the small- and medium-sized companies.
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