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

Build VALUE Together
기업시민 슬로건
Practical Strategies
  • Business

    Value of win-win with customers

  • Society

    Value of sharing with local communities

  • People

    Value of happiness with employees

[Purchase Division]
Fair Trade and
Win-Win Cooperation
Program
    1. Compliance with fair trade
    2. Operation of bid system for win-win value
    3. Technological support for partners
    4. Financial support for partners
    5. Operation of Innovative Growth Support Team (safety, technology, education)
    6. Contribution for Mutual Benefit Cooperation Fund between Large Enterprises & Small-Medium Enterprises
    7. Mobilization of purchasing business
    8. Introduction of e-Catalog system within POSCO Group
    1. Bidding recommendation system for local companies
    2. Environmental cleanup activities with excellent partners
    3. Contribution to the agricultural and fishing villages collaborative cooperation fund
    4. POSCO Youth Dream job matching program
    1. Support for funeral supplies and wedding halls for partners
    2. Operation of a mobile app as field workers' opinion channel
    3. Operation of a grievance handling center on the purchasing portal
    4. Establishment of standards for installation of sanitation and rest facilities
    5. Reward system for excellent employees of partners
    6. Holding on-site meetings with partners
    7. Online on-site (specification) briefing session
    8. Access available for partners’ employees to the welfare mall of POSCO Group
    9. Wage arrears management system (nomubi.com)
    10. Awareness innovation campaign for no power abuse
    11. Sending a letter of win-win cooperation

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, operation of the system to automatically detect illegal special contract and issue work order
  • 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 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, access available for partners’ employees to the welfare mall of POSCO Group, rewarding excellent employees of partners
    Communication activities: On-site meeting with partners, operation of a field workers' opinion channel, environmental cleanup activities, 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 "Innovative Growth Support Group" to support technology, safety, job 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

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

  • Purchase Department

    Automatically detect illegal special contract and notify detection result

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

    Correct illegal special contract in purchase specification and request purchase

    attach standard subcontract agreement, individual agreement, and purchase specification

Work Order Issuance Confirmation SystemIntroduction of 2018.12

In case where a partner requests a monthly completed amount, it can directly check on the system through the pop-up window whether a work order is issued and whether additional construction costs are reflected.

System screen when requesting completed amount by partners

협력사 기성청구 시스템

1) Did you perform additional construction work other than what is described on the screen this month?
2) Have you been issued a work order for additional construction?
3) Have you been paid for the additional construction this month?

YES / NO

If you select “No,” it will be notified to our Fair Trade Group and whether the Fair Transactions in Subcontracting Act has been violated will be confirmed.

Verbal work order is inappropriate
appropriate and timely payment for construction will be made.

Win-Win

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

Bid System With Limited Low PriceIntroduction of 2020.04

Resolving problems such as quality deterioration and safety accidents due to bleeding competition
A system that was introduced for win-win cooperation with subcontractors suffering from COVID-19 after 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 excluding the lowest bid amount within budget + budget) ÷ 2] x 80%

Case of "XX site" window construction (budget: KRW X billion; the set lowest price: KRW 900 million)
Company A would win the bid when the lowest price is applied; however, Company B 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) 8 10 11 13 15

* Guaranteed fair profits for partners by increasing the amount of successful bids by approximately KRW 10 billion per year

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

* Guaranteed fair profits for partners by increasing the amount of successful bids by approximately KRW 2.5 billion per year

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 for partners that lends POSCO E&C's funds without interest to practice the management philosophy of "Corporate Citizenship: Building a Better Future Together" and to improve their liquidity

Target and period

- Target: Excellent partners of POSCO E&C
- Limit: KRW 500 million (a total of KRW 10 billion/year)
- Repayment and term: One-time repayment (1 year)

Shared Growth FundIntroduction of 2011.06

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

0.5% preferential rate compared to market interest rate

Target and period

Target: Officially registered partners of POSCO E&C
Limit: KRW 1 billion
Repayment and term: One-time repayment/1 year (extension available on a yearly basis)

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
Limit: Less than 50% of the contract amount
Loan application period: Before 50% of the contract period has elapsed
Repayment and term: Completed amount deduced/within the contract period

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: Lineal ascendants/descendants and spouses of partners’ employees who are working at the field for more than six months (intermittent working period in one year acceptable if it adds up to six months)
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

Access Available for Partners’ Employees to the Welfare Mall of POSCO GroupIntroduction of 2020.06

An online shopping mall that has been operated since 2017 where employees of POSCO Group can purchase products at a lower price than the market price.

Target: Those who desire among the registered companies for POSCO E&C (excluding companies with sanctions and problems within the last one year)
Item: Living/home appliances, travel/cultural products, books, educational products, etc.
Link: PC ( http://poscoenc.zzzmobile.co.kr ) ) or mobile app ("Dreaming Mobile")

Rewarding Excellent Employees of PartnersIntroduction of 2017.12

Selection process

  • Selection of top partners in performance evaluation

  • Recommendation of excellent employees of partners

  • 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.

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

Holding On-Site Meetings With PartnersIntroduction of 2019.03

Management visits the field and directly communicates with the field managers of partners to listen to VOCs and discover matters to be improved.
* Improving systems such as abolition of the lowest price bid system and providing feedback on VOC action plans and results including resolution of difficulties in the field

협력사 현장 간담회 1 협력사 현장 간담회 2

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 2 현장근로자 소리함 3

Environmental Cleanup Activities With PartnersIntroduction of 2020.07

Implementing the philosophy of corporate citizen management by conducting public interest activities for environmental cleanup in the local community with excellent partners

Overview: Purchasing department employees directly visit excellent partners and carry out environmental cleanup activities in neighboring areas, such as parks, rivers, and alleys together with employees of the partners
Target: Those who wish to participate among excellent partners in construction and safety field

협력사와 함께하는 환경정화활동

Workers’ Wage Arrears Management Systemnomubi.com, Introduction of 2016

Preemptive payment arrear prevention system to avoid late payment of wages and money misappropriation by workers of subcontractors (primary contractor → workers’ accounts)

근로자 임금 체불관리시스템 근로자 임금 체불관리시스템

Reward and prize

Target: Small and medium-sized partners doing business with POSCO E&C (excluding middle-standing enterprises)
How to apply: Automatic fee waiver through the nomubi.com system
* Applicable to payments made through nomubi.com from June 1, 2021.

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

[First Half] Reception: February to March; evaluation and final selection: April
[[Second half] Reception: August to September; evaluation and final selection: November

Contest topic

[First half] Proposals are received after topics are announced by POSCO E&C
[Second half] All improvements/development proposals related to the construction industry are applicable

Contest benefits

In case where a company selected for excellent ideas proves their performance after joint technologies development,
incentives such as private contracts, long-term supply rights and joint patent applications will be provided.

성과공유제

Coexistence

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

Innovation Growth Support TeamIntroduction of 2019.08

Overview

Supporting innovative growth of small and medium-sized partners by utilizing the capabilities and infrastructure possessed by each department in response to the needs of partners

Support target

Partners who wish to participate in construction, supply of equipments, and materials, and internally recommended small and medium-sized partners

Program

Technology exchange: "Activation of technical cooperation" for coexistence and win-win relationship with partners
Educational activities: Construction practice, BIM education, etc. to "improve job competency of partners’ employees"
ESG activities: "Participation in social issues" such as safety, environment, and society

Operation method

Technology exchange, safety activities: Each support group selects the relevant partner
Educational activities: Submission of the application for participation after confirming the notice

Operation method Operation method

Value of win-win with customers

Complying With Four Major Practices Between Large and SMEs

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

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

대중소기업간 4대 실천사항 준수

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
    ㆍProvision of supplies for protection against COVID-19 and hot packs during winter
    ㆍEducational assistance for enhancing the suppliers’ competencies

Electronic import stamp tax support

Changed the distribution ratio of e-revenue recognition for the practice of corporate citizenship management philosophy and win-win growth with business partners

Electronic revenue stamp issuance process

전자수입인지 인지세 지원 전자수입인지 인지세 지원 전자수입인지 인지세 지원

Joint R&D

Conducting joint R&D by selecting a technology necessary for field application, quality assurance, and cost reduction as a development task once a year

Excellent case

• Project title: Development of ultra-high-strength end-extended PHC pile
Making the pile's main body ultra-high-strength (80 Mpa → 110 Mpa) and end-extended (Ø50 increase) leading to augmentation of ground supporting force of the main body

공동연구개발

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

Mobilization of Purchasing Business

- Additional introduction of mobile purchasing system for partners other than PC-based one
- Sharing real-time purchasing tasks without restrictions on time and place with partners
   Partner registration procedure, bid announcement and results, order and delivery confirmation, payment status, etc.

Mobile system login and main page

구매업무 모바일화

Introduction of e-Catalog System Within POSCO Group

Products introduction available on-line without a supplier directly visiting the product use department and giving explanation

How to access and use

Suppliers who wish to introduce their products can access the system by clicking the "e-catalog" banner on the main page of the POSCO E&C purchasing portal and use the system after registering as a member.

"e-catalog" system main page

포스코그룹 e-Catalog 시스템 * Partners headquartered in Pohang or Gwangyang (Suncheon) or members of the Korea Specialty Contractors Association

Value of Sharing With Local Communities

Contribution to the Agricultural and Fishing Villages Collaborative Cooperation Fund

Practicing “With POSCO” as a corporate citizen and contribution to the local community

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: L & SMEs Cooperation Foundation
Contribution amount: KRW 5 million (1 year contract)
Purpose of contribution: Purchasing NongHyup gift certificates to distribute to residents in rural areas

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: Partners in the field of steelmaking in Pohang and Gwangyang that wish to participate
Training content: Basic knowledge as a member of society and practical skills centered on management of steelmaking such as welding and crane

Detailed curriculum

  • Liberal arts/character (2 weeks)

    Trust, communication, and vision design
    Positive mind, volunteering activities
    Field experience, conversation with seniors

  • Common vocational skills (2 weeks)

    Steel production process
    General machinery, hydraulic/lubrication
    Equipment diagnosis, heavy cargo handling

  • Advanced welding (3 weeks)

    Electric welding (general)
    Electric welding (practice)

  • Intensive crane operation (2 weeks)

    Overhead crane (general)
    Overhead crane (practice)

Value of Happiness With Employees

Establishment of Standards for Installation of Sanitation and Rest Facilities

Establishment of minimum guidelines for sanitation and rest facilities to guarantee the basic rights of workers whose living environment is the construction fields.

Installation and operation standards

1) Establishment of installation standards for urinals and toilets

Category Office Apartment housing
Urinal 1 unit per 5 floors 1 unit per 5 floors
Toilet 1 unit per 10 floors 1 unit per 3 above-ground restrooms, additional installation after securing an evacuation floor

2) Provision of drinking water, beds or chairs, and air conditioners in rest facilities

3) Contract with a cleaning company (full cost paid by POSCO E&C)
Improvement of the cleanness state of on-site sanitation facilities

4) Immediate disposal of unusable temporary toilets (regardless of years of use)

Awareness Innovation Campaign for No Power Abuse

Establishment of a field culture of respect and consideration by removing the tendency of power abuse permeated in the words and deeds of executives and staff members

Chanting "With POSCO" slogan in unison at the end of TBM

Host: With POSCO! Keep the field safe with respect and consideration!
All: Keep it safe, safe, safe!

Awareness improvement education for preventing power abuse (education for new employees and ethics education for all group employees)

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

Promotion and introduction of shared growth programs operated by POSCO E&C, such as eligible targets for new system, how to apply and how to participate in contests Used as a communication channel with partners; improving the utilization and participation rates of partners in various programs by sending win-win cooperation letters

Sent to: Regular registered partners and aspirant partners of POSCO E&C

Letter Sample

상생협력레터 발송 상생협력레터 발송

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