Shared Growth

POSCO E&C is a trustworthy win-win partner that forms stable industrial ecosystem.

Philosophy and Strategy

POSCO E&C intends to continuously change and innovate while communicating and sympathizing with all our stakeholders, including partners and customers.
We ultimately aim at creating greater corporate value and sustainable growth
under the management philosophy of "Corporate Citizenship: Building a Better Future Together."

  • Management Philosophy Corporate Citizenship: Building a Better Future Together
  • Mission Creating a strong construction industry ecosystem
    through win-win cooperation with small and medium-sized partners
  • Values Fair Trade ˙ Value Creation ˙ Performance Sharing

Strategy for Shared Growth

Five Major Brand Programs

In order to practice the corporate citizen slogan, "Build Value Together," various programs are operated in the three areas of win-win, sharing, and happiness. Among them, major programs are classified into five major brands.

  • 01 Process

    Establishment of "fair trade culture" by protecting the rights and interests of subcontractors and operating a fair trade compliance program

    Use of Standard Subcontract Agreement / Operation of the Subcontract Win-Win Cooperation Committee / Establishment of a System to Automatically Detect Unfair Special Agreements
  • 02 Win-Win

    Operation of "win-win-based bidding system" and "financial support system" to ensure fair profits and improve liquidity

    Win-win-based bidding system: Bid system with limited low price, bid system of market price competition, purchase preferential system for social enterprises & companies of persons with disabilities
    Financial support system: Interest-free management fund loan to excellent partners, Shared Growth/ESG Fund (Woori Bank), Win-Win Loans (Shinhan Bank, Hana Bank)
  • 03 Empathy

    "Creating a Happy Workplace" by operating a welfare system for partners and facilitating communication with field workers

    Welfare system: Support for funeral supplies, rewarding excellent employees of partners, Establishment of standards for the installation of on-site sanitation and rest facilities
    Communication activities: operation of a field workers' opinion channel, management of workers’ wage arrears
  • 04 Share

    Expanding the "Performance Sharing System" such as profit sharing by resolving construction field issues with partners

  • 05 Coexistence

    Operation of “Shared Growth Support Team” to support technology, consulting, education positions required by small and medium-sized partners

Process

Establishment of "fair trade culture" by protecting the rights and interests of subcontractors and operating a fair trade compliance program

Use of standard subcontract agreement recommended by the Fair Trade Commission

Immediate reflection of amendments to the Fair Transactions in Subcontracting Act and standard subcontract agreement

Time of first introduction

Construction: December 27, 2017
Equipments/materials/services: April 5, 2019

Subcontract Win-Win Cooperation CommitteeNewly established 2020.04

Able to quickly and amicably resolve disputes between the field and partners through company-wide decision-making
- Establishment of win-win cooperation procedure regarding dispute settlement
- Partners are able to directly apply for dispute settlement in case of a conflict

Establishment of Automatic Detection System of Illegal Special Contracts (Pos-Compli)Introduction of 2020.06

Detection of illegal special contracts in the purchase specification, an annex to the contract, using AI

Illegal special contract detection process

  • On-site

    ① Prepare purchase specification and request for review (using standard form)

  • Purchase Department

    ② Automatically detect illegal special contract and notify detection result

    use the review contents to generate learning data improve AI detection accuracy
  • On-site

    ③ Correct illegal special contract in purchase specification and request purchase

Win-Win

Operation of "win-win-based bidding system" to ensure fair profits for partners

Bid System With Limited Low PriceIntroduction of 2020.04

A system introduced to address issues such as quality deterioration and safety accidents caused by bleeding competition.
It aims to foster win-win cooperation with subcontractors facing difficulties due to the downturn in the construction economy and rising raw material prices, by abolishing the lowest bid system.

Operation overview

Bidders who offered lower than the low price limit threshold* are excluded, and bidders directly above the threshold are selected.
*[(average of bid amounts excluding the lowest bid within budget) x 85%]

Case of "XX site" window construction (budget: KRW X billion; the set lowest price: KRW 1.1 billion)
Company A would win the bid when the lowest price is applied; however, Company C became the successful bidder with the application of the limited low price.

Cateogry Company A Company B Company C Company D Company E
Bidding amount (KRW 100 million) 9 10 12 13 15

Bid System of Market Price CompetitionIntroduction of 2017.09

For win-win cooperation with subcontractors, POSCO PJT excludes the lowest price and applies the market price competition in bid system
In particular, for win-win cooperation with local companies in Pohang, Gwangyang, and Suncheon, the bid for specific types of construction are only open to local companies.

Operation overview

Among the bidders within the budget, the bidder closest to the market price* is selected as the successful bidder.
* [(average of bidders within budget + order budget) ÷ 2] x (93%–97%)

Case of "XX site" mechanical construction (budget: KRW X billion; market price: KRW 2.68 billion)
Company A would win the bid when the lowest price is applied; however, Company C became the successful bidder with the application of the market price.

Category Company A Company B Company C Company D Company E
Bidding amount (KRW 100 million) 24 25 27 28 29

Purchase Preferential System for Social Enterprises & Companies of Persons With DisabilitiesIntroduction of 2020.07

Expansion of trade with society-friendly companies to participate in solving social problems and go beyond creating economic profit in the purchasing process

Society-Friendly Companies

A concept independently defined by POSCO Group by compiling companies related to social problem-solving

사회적 친화기업
  • Social Enterprise
    Social Enterprise Promotion Act

    Companies that provide social services or jobs to vulnerable groups such as the elderly, persons with disabilities, women with career interruptions, and North Korean defectors,
    or contribute to the local community

  • Intrepreneurial Activities of Persons With Disabilities
    Act on the Facilitation of Entrepreneurial Activities of Persons With Disabilities

    Companies owned or run by persons with disabilities and persons with disabilities amounting to more than 30% of its personnel

    Small enterprises owned or run by persons with disabilities (annual sales of less than KRW 12 billion in manufacturing, less than KRW 8 billion won in construction)

Benefits

Preferential registration and bidding, fee reduction

Category Details
Preferential evaluation for new registration Additional 10 points are given when evaluating new registrations
Preferential bid price evaluation 5% preferential treatment when evaluating the bid amount (orders with a budget of less than KRW 1 billion)
Reduction of contract deposit 5% reduction of contract deposit (10% → 5%, preferential level for excellent companies)
Shortening the payment period Shortening the payment period (tax invoice issuance +50 → 15 days)

Operation of "financial support system" to enhance the financial liquidity of partners

Interest-Free Management Fund Loan to Excellent PartnersIntroduction of 2020.12

A financial support system that provides interest-free loans by utilizing a KRW 10 billion fund established by POSCO E&C to enhance the liquidity of its partners.

Target and period

- Target : Excellent partners of POSCO E&C (PHP companies)
- Limit and Term : KRW 500 million / 1 year (extendable for another year if PHP status is maintained)
- Application and Repayment : Separate application / Lump-sum repayment at maturity or early settlement
- Guarantee Method : Payment guarantee issued by a bank (Domestic Tier-1 financial institutions)

Shared Growth/ESG FundIntroduction of 2011.06

Low-interest loan assistance for subcontractors by establishing a Shared Growth Fund of KRW 52 billion with Woori Bank starting in June 2011

1% to 2% preferential rate compared to market interest rate * Additional preferential rate for excellent partners in the ESG assessment (grades 1-4)

Target and period

- Target : Regularly registered partners of POSCO E&C
- Limit and Term : KRW 500 million per year (extendable in 1-year increments if registration is maintained)
- Application and Repayment : Available any time / Early or lump-sum repayment at maturity
* Note: A fee applies for early repayment

Win-Win LoansIntroduction of 2018.06

- Concluded an MOU with Korea Commission for Corporate Partnership and financial institutions for financial support for the first time in the construction industry
* June 2018 (Shinhan Bank), August 2020 (Hana Bank)

- Signing a contract with POSCO E&C makes it available for a partner to borrow money and reduce interest costs

더불어 상생대출

Target and period

- Target : Officially registered partners of POSCO E&C (contracts in KRW, with a contract period of at least 6 months and before 50% of the contract period has elapsed)
- Limit and Term : Within the contract period, up to 100% of the contract amount (considering deductions for paid advances, interim payment limits, and credit rating)
- Repayment Method : Installment repayment (deduction from interim payments) or full repayment at maturity

Empathy

"Creating a happy workplace” by operating a welfare system to build a sense of unity with subcontractors

Support for Funeral Supplies for Employees of PartnersIntroduction of 2019.01

Target: Employees of PHPs and employees of partners working at a POSCO E&C site and their lineal ascendants and descendants and spouse.
Item: Funeral supplies engraved with POSCO E&C logo (12 items, including bowls, paper cups and plates, for 500 people)

협력사 직원 장례용품 지원

Selection process

  • Occurrence of bereavement

  • Field manager of the partner

  • Person in charge of construction in POSCO E&C

  • Person in charge of win-win cooperation in funeral goods companies

Documents to be submitted

Funeral supplies application form, employment certificate, national pension or health insurance subscription certificate

Rewarding Excellent Employees of PartnersIntroduction of 2017.12

Selection process

  • Selection of top partners in performance evaluation

  • Recommendation of outstanding employees from partner companies by the business division

  • Confirmation of excellent employees

Reward and prize

Certificate of commendation and gift certificate worth KRW 2 million
The selected partner is given 1 additional point in the comprehensive performance evaluation.

Establishment of standards for the installation of on-site sanitation and rest facilities

1) Contract conclusion
2) Selection/management of partners
3) Establishment/operation of internal deliberation committee on subcontract
4) Issuance and preservation of written forms
* Reflecting four major practices in contract work procedure

대중소기업간 4대 실천사항 준수

"Creating a Happy Workplace" that communicates and empathizes with partners and workers

Operation of Field Workers' Opinion ChannelIntroduction of 2019.05

Establishment of a mobile communication channel to report workers’ inconvenience, matters to be improved, and unfair treatment
* Scan the QR code, log in to the "Field Workers Opinion Channel" in the "POSCO E&C Report & Consultation Center" and register opinion

현장근로자 소리함 1
현장근로자 소리함 1 현장근로자 소리함 2 현장근로자 소리함 3

Transfer Fee Support for "Nomubi.com“Introduction of 2021.06

Introduction of a proactive payment arrear prevention system to prevent wage delays and fund misappropriation by workers of subcontractors (Nomubi.com, since 2016).

Provision of support by waiving Nomubi.com transfer fees for. partners

- Target : Small and medium-sized partners doing business with POSCO E&C (excluding middle-standing enterprises)
- Method of Support : Automatic fee waiver within the Nomubi.com system

※ Nomubi.com Payment Process (Primary Contractor → Workers' Accounts)

근로자 임금 체불관리시스템 근로자 임금 체불관리시스템

1. Preparation of Billing Statement
2. Review of Billing Statement
3. Disbursement of Progress Payment
4-1. Transfer (Labor Costs, Equipment Costs, Material Costs
4-2. Transfer (Other Costs)
5. Review of Payment Details

Share

Expansion of the "Performance Sharing System" to share technology and performance by resolving issues at construction fields

Performance Sharing SystemIntroduction of 2008

How to make a proposal of technology

1) Good ideas from partners can be proposed at any time through the "Win-Win Cooperation Technology Suggestion Center" (http://winwin.poscoenc.com)

How to make a proposal of technology How to make a proposal of technology

2) Excellent ideas from partners that are creative and can be applied to the field are selected by holding the "Technology Cooperation Contest"

Contest Period*

Annually 1-2 times
Announcements made in advance on the POSCO E&C website and partner portal

Contest topic

Submission of ideas following the announcement of required topics by POSCO E&C
- Topics related to new businesses such as nuclear energy, secondary batteries, offshore wind power, hydrogen, etc.
- Topics related to new technologies and methods such as cost reduction,
construction period shortening, and safety/environmental improvements

Contest benefits

For partners selected for excellent ideas, upon proving performance through joint technology development,
incentives such as unit price contracts, Private contracts, and joint patent applications will be provided.

성과공유제

Coexistence

Operation of the "Shared Growth Support Team" for coexistence with partners by providing support in the necessary areas

Shared Growth Support TeamIntroduction of 2019.08

Overview

The Shared Growth Support Team helps SME partners to improve their safety, skills and job competency through a two-track system, one being a support team using POSCO E&C’s capabilities and infrastructure and the other being a support team tailored to partner needs.

Support target

PHPs and SME partners who wish to participate in the program or have been recommended internally.

Program

- Training : Offering capacity-building training in areas such as new business, safety, and quality (including mandatory Safety Academy courses and training for areas needing improvement).
- Consulting : Providing complimentary consulting and system establishment support using external organizations (for example, safety diagnostics and ready-mix concrete vehicle management systems).

Operation method

[Track 1] POSCO E&C organizes a support team and matches partners to the program by selecting them or receiving their applications.
[Track 2] POSCO E&C listens to the needs of partners and matches them to our own program or outside entities.

Operation method Operation method

Compliance with Four Major Practices Between Large, Medium, and Small Enterprises

1) Practices for Contract Conclusion
2) Practices for Selecting and Managing Subcontractors
3) Practices for Establishing and Operating an Internal Review Committee for Subcontract Transactions
4) Practices for Issuance and Retention of Written Documents

* Integration of the Four Major Practices into Contract Management Procedures 대중소기업간 4대 실천사항 준수

100% Cash Payment of Subcontract Amount

Starting in October 2010, 100% cash payment of subcontract amount was made to secure cash flow and shared growth with partners for the first time in the construction industry

하도급대금

Early Payment of Holiday Funds

Early payment of subcontract amounts for smooth financial activities of partners who have a high demand for funds during the Lunar New Year and Chuseok holidays every year

Donation to fund for mutually beneficial cooperation of large enterprises & small-medium enterprises

Donating funds for the integrated management and effective usage of activity costs for various shared growth programs run by POSCO E&C

  • What is a mutually beneficial cooperation fund?

    Private finances provided by a domestic corporation to the Korea Foundation for Cooperation of Large & Small Business, Rural Affairs for mutual cooperation with SMEs

    Donated toKorea Foundation for Cooperation of Large & Small Business, Rural Affairs

    Contribution amountKRW 2-3 billion

    Purpose of contributionOperating shared growth programs of POSCO E&C
  • Key programs for the mutually beneficial cooperation fund

    ㆍSupply of funeral supplies for suppliers’ on-site employees
    ㆍProvision of on-site sanitation facilities and rest areas
    ㆍSupport for ESG assessment and safety consulting
    ㆍEducational assistance for enhancing the suppliers’ competencies

Operation of the PHP (POSCO Honored Partner) program

Discovering more PHPs and establishing long-term partnerships by increasing transactions with them

Target

ㆍRegistered company in Construction, Equipment, Material and Logistics

Selection criteria

ㆍExcellent scoring partner in comprehensive performance evaluation and safety management

[Example]
Category On-site
evaluation
Contract
performance
Bidding
rate
Merit/demerit
Performance score 70 points 20 points 10 points -6 to +5
points

Benefits

[Construction]
- Priority rights for bid participation
- Priority negotiation rights for private contracts (if necessary)

[All Sectors]
- Reduction of performance bond rate (10% → 5%)
- Interest-free management fund and provision of condolence wreaths for PHP employees

ESG assessment and safety consulting

Improving ESG capabilities and preventing safety accidents for sustainable management.

Target: Officially registered partners in construction areas.
Benefits: Support for ESG assessment and safety consulting fees.

Electronic import stamp tax support

Exemption of Electronic Revenue Stamp for Contract Signing to Foster Win-Win Growth with SME Partners (POSCO E&C bears 100% of the cost)

Electronic revenue stamp issuance process

전자수입인지 인지세 지원 전자수입인지 인지세 지원 전자수입인지 인지세 지원

Technical Data Escrow Program

POSCO E&C provides SMEs with the option to securely deposit their critical technical information with a trusted third-party organization, the Korea Foundation for Cooperation of Large & Small Business, Rural Affairs (KOFCA).

* This program enables companies to verify their ownership of the technology in the event of a technology leak.

  • Eligible Participants

    - Officially registered partners of POSCO E&C

  • Depositable Items

    - Production and manufacturing processes, design drawings and manuals, formula ratios, etc.

  • Support Details

    - Full coverage of technical data escrow service fees

※ Procedure:
① Submit application → ② Pay service fee → ③ Submit deposit materials → ④ Apply electronic signature → ⑤ Execute escrow agreement

Free Transfer of Patent Rights

Free transfer of POSCO E&C's unused patents to small and medium-sized partners to enhance their technological competitive edge and spread win-win cooperating culture

특허권 무상이전 특허권 무상이전

Smartization competency enhancement consulting (QSS consulting)

Productivity improvement such as management/manufacturing innovation and process improvement of SMEs through QSS (Quick Six Sigma) innovation activity, POSCO’s unique innovation methodology, and pre-consulting for smart factory construction (free support)

Support contents

  • Consulting to strengthen innovation capacity

    1. QSS Consulting*
    2. Energy Consulting
    3. Smart level diagnosis

  • Innovation competency strengthening education

    1. Overseas Benchmarking for Executives
    2. CEO Workshop
    3. Innovation leader training

* Work environment improvement, facility function restoration, chronic problem solving

Smart factory construction support

Implementation of a waste-free factory by using IT technology in small and medium-sized manufacturing plants to intelligently optimize the production process, and promotion to improve the structure and productivity of SMEs (construction cost is supported by the Ministry of SMEs and Startups)

Support contents

  • Step 1

    Implementation of partial smartization such as ICT-linked simple production system (barcode-based LOT tracking, etc.) or simple automation

  • Step 2

    Implementation of smartization of all processes including enterprise resource management (ERP), factory operation, supply chain management (SCM), manufacturing automation (loT sensor grafting), and process simulation

Contribution to the Agricultural and Fishing Villages Collaborative Cooperation Fund

Supporting Revitalization and Sustainable Development and Growth of Local Economies in Rural Areas

Agricultural and fishing villages collaborative cooperation fund

A fund to support the promotion of win-win cooperation between businesses and agricultural and fishing villages that have suffered or are likely to suffer damage from the implementation of a free trade agreement (Article 19-2 (1) of the Special Act on Assistance to Farmers, Fishers, Etc. Following the Conclusion of Free Trade Agreements)

Operator of the Fund : Korea Foundation for Cooperation of Large & Small Business, Rural Affairs (KOFCA)
Contribution Amount : KRW 1 billion (subject to change based on annual support activities)
Purpose of Contribution : Linked to community volunteer and sharing activities

Bidding Recommendation System for Local Companies

Expansion of participation of local companies in construction under a certain amount

Construction type Existing Improved
Machine installation (PLANT) Less than KRW 1 billion Less than KRW 2 billion
Electrical Work (PLANT) Less than KRW 700 million Less than KRW 1 billion
Reinforced Concrete Work (PLANT) Less than KRW 500 million Less than KRW 1 billion
* Partners headquartered in Pohang or Gwangyang (Suncheon) or members of the Korea Specialty Contractors Association

POSCO Youth Dream Job Matching Program

Providing high-quality vocational training for young job seekers (high school graduates and vocational college graduates) based on POSCO Group’s excellent education and training infrastructure which leads to employment by partner companies

- Target : Interested partners in the steelmaking field in the Pohang and Gwangyang areas
- Training Content : Basic social skills and practical skills focused on managing steelmaking facilities, such as welding and crane operations
- Training Program : Personal Development (2 weeks), Basic Technical Skills (2 weeks) , Practical Technical Training (5 weeks)

Introduction of the Mutual Growth Mall

An online shopping platform designed to expand sales channels for SMEs and enhance employee welfare for partner companies by providing quality products from excellent SMEs at reasonable prices.

Eligible Users: Officially registered partners of POSCO E&C
Product Range : Includes food, electronics, daily necessities, furniture, and fashion & beauty items, featuring well-known SME brands such as Cuckoo, Shinil, and Dimchae.
How to Use : Visit the URL below, register as a member, and purchase freely
- Online: (http://www.dongbanmall.com/poscoenc
- Mobile: (http://m.dongbanmall.com/poscoenc)

※ Membership Registration Notes : 1. Select client company (click POSCO E&C) 2. Employee number (leave blank)

Operation of a Grievance Handling Center on the Purchasing Portal

Receipt and handling of various grievances of partners, such as inquiries on partner registration process, bidding contract system, and how to use the system
* Grievance Handling Center : https://ild.poscoenc.com/pgm/board/QnA.asp

온라인 현장(사양)설명회

Online on-site (specification) briefing session

Improving work efficiency and bidding participation rate by omitting on-site visits by partners through pursuing non-face-to-face business due to COVID-19
* Target orders: Small orders, orders involving long-distance travel, simple condition orders, etc.

Online on-site briefing process

온라인 현장(사양)설명회 온라인 현장(사양)설명회

Sending a Letter of Win-Win Cooperation

Serves as a communication channel with partners to promote and disseminate information about various shared growth programs, with the objective of increasing the utilization and participation rates of partners

Letter Sample

상생협력레터 발송

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