LG, SK vow support for their smaller suppliersSome conglomerates are planning to invest in smaller suppliers and start-ups with high business potential.
LG Group announced on Tuesday that it will spend 843.2 billion won ($706.2 million) to support 977 of its suppliers.
Korea Fair Trade Commission Chairman Jeong Jae-chan and executives from major suppliers were present at the ceremony in the company’s headquarters in Yeouido, southwestern Seoul, along with heads of the group’s nine subsidiaries, including LG Electronics and LG Chem.
LG plans to support its suppliers’ new technology development and provide measures to protect the technology after development.
LG is giving 105 billion won of the fund to the North Chungcheong Center for Creative Economy and Innovation to invest in small and midsize companies in sectors with high growth potential like clean energy, bio and beauty.
It will also share the 52,400 patents it owns to all partnering companies.
To protect the technology once developed, LG will pay for suppliers to register their technology with the so-called technological escrow service, which serves as proof of ownership of their intellectual or technological assets should any legal issues arise in the future.
Of the remaining 738.2 billion won, 649.5 billion won will go into a mutual fund established in 2010 with the Industrial Bank of Korea, while 88.7 billion won will be directly injected into partnering companies. The fund offers loans to partnering companies at a lower interest rate compared to commercial banks.
SK Telecom on Tuesday purchased stakes of technology start-ups as a means for direct investment.
The telecommunications arm of SK Group purchased 2.7 billion won worth of shares from three start-ups, SK Telecom said.
While most of SK’s support for start-ups has been through funding and incubators, the company plans to increase its inclusion of start-up technologies in its value chain.
To attract investment and find new markets to sell the product and technologies, SK will guide start-ups to avoid “Death Valley,” a phenomenon where many start-ups face financial difficulties within five years.
The beneficiaries of the investment are Cremotech, a smart laser beam projector maker; Pamily, a smart pet toy developer; and CMES, an industrial three-dimensional scanner sensor developer.
Cremotech was part of SK Telecom’s “Bravo! Restart,” a start-up nurturing program, and the other two companies were approved by the Daejeon Center for Creative Economy and Innovation through the center’s incubation program.
BY KIM JEE-HEE [email@example.com]