Subcontractors see improvement in business with big firms: surveyMadeinkoreablog
About 70 percent of subcontractors say that their business environment with big companies is improving, as their clients expand cash payments to help protect their profitability, a survey showed Thursday.
Under the so-called “shared growth” policy, South Korea has urged big firms not to hand over their losses to their suppliers with unfair transactions.
The survey of 317 subcontractors, conducted by the Federation of Korean Industries (FKI), the country’s largest business lobby, showed that 71.6 percent of the respondents say the “sentiment of shared growth” has improved.
The remaining 28.4 percent have seen the business environment with their clients worsen.
The survey attributed the improvement to a rise in cash payments to suppliers and a shortening period in settlement.
However, a lack of the government’s measures to support small and medium-sized companies and a rise in the number of “zombie” companies that fail to repay their debts are hurting the “sentiment of shared growth,” the respondents say.
The FKI pointed out that the government’s “unsystematic” support for small- and medium-sized firms have helped such “zombie” firms keep afloat.
The survey also showed that 45.6 percent of first-tier suppliers receive their payments within 30 days, while 30 percent receive their payments within 60 days.