South Korean Steelmaker POSCO Expands Supplier Support Pact With Antitrust Regulator

According to The Korea Times, which first reported the development, the agreement was signed Thursday at POSCO Center in Seoul by POSCO Holdings President Lee Ju-tae and FTC Chairman Ju Biung-ghi. The initiative is expected to cover approximately 5,300 companies connected to the steelmaker’s supply chain.

The arrangement focuses on improving payment practices and expanding shared-growth programs designed to strengthen supplier competitiveness. POSCO said it plans to widen the use of its payment system that guarantees settlement on agreed dates while enabling suppliers to convert receivables into cash at lower financing costs.

The company also pledged to shorten payment cycles, stating that suppliers will receive cash-equivalent payments within an average of 10 days. Direct suppliers and second-tier vendors will be encouraged to pay their own subcontractors within 30 days, according to The Korea Times.

“POSCO Group has grown by treating shared growth with its partners as a core value,” Lee said during the signing ceremony, adding that the company intends to promote transparent business practices and long-term cooperation throughout its industrial ecosystem.

The agreement comes amid broader efforts by South Korean authorities to address concerns over market concentration and unequal bargaining power between large conglomerates, or chaebol, and smaller suppliers. The FTC has increasingly emphasized fair subcontracting practices and supply chain stability as part of its competition policy agenda.

Chairman Ju described cooperative relationships between major companies and suppliers as essential to sustaining industrial innovation, according to the report. POSCO said it intends to incorporate the new commitments into its annual fair-trade agreements with suppliers beginning next year.

The initiative also expands support measures in areas including technology development, overseas market access and profit-sharing. POSCO’s profit-sharing scheme, which distributes gains generated through joint technology projects, will now be opened to smaller and second-tier suppliers that were previously outside the program’s scope.

The agreement aligns with a wider policy push by South Korea’s competition regulator. In recent months, the FTC has unveiled plans to strengthen oversight of conglomerates and digital platforms, including expanding its workforce and reviving an investigative unit dedicated to large-scale antitrust cases and major corporate groups. Officials have argued that stronger enforcement is necessary to curb unfair practices and protect smaller market participants, while some business groups have expressed concern about increased regulatory intervention.

The FTC has also pursued similar shared-growth initiatives in other industries. Earlier this year, major construction firms entered agreements with the regulator to improve subcontractor protections, including commitments to faster price adjustments and the removal of contract clauses viewed as unfair to smaller businesses.

POSCO has separately expanded its support for smaller enterprises through technology-sharing programs. According to South Korea’s Ministry of Trade, Industry and Energy, the group has participated in a government-backed initiative since 2017 that has facilitated the transfer of hundreds of industrial technologies to small and medium-sized companies, including 112 technologies provided to 75 firms this year alone.

South Korean law requires large business groups to disclose extensive information about their corporate structures and internal transactions, reflecting longstanding concerns about concentration of economic power among major conglomerates. The FTC continues to monitor governance practices and supply-chain relationships across these groups as part of its broader competition mandate.

Source: The Korea Times