HD Hyundai (267250.KS) is stepping up support for suppliers struggling with raw material procurement difficulties and rising cost burdens due to the war between the United States and Iran.
The company announced Wednesday that it will supply ethylene, a key raw material for shipbuilding, and paint ingredients to minimize production disruptions and help stabilize operations at small and medium-sized partner companies.
As supply instability for petroleum-based raw materials grows and cost pressures rise from price increases, HD Hyundai plans to proactively secure key materials through its refining and petrochemical affiliates and provide swift support if suppliers face procurement disruptions.
For ethylene used in cutting ship steel plates, the company has secured 2,000 tons through HD Hyundai Chemical and plans to supply it to partners upon request starting in May. HD Hyundai is also pursuing plans to supply xylene and other key paint ingredients to partners through HD Hyundai Oilbank.
The company is also providing financial support to stabilize partner operations. It plans to provide funding to suppliers of its shipbuilding, construction equipment, and power equipment affiliates in coordination with policy financing programs.
The "Export Supply Chain Strengthening Guarantee Product," established earlier this year with a total of 400 billion won ($296 million), is expected to provide practical help in securing raw materials as it allows suppliers to access funds without collateral. The first support for partners will be provided this month, marking the full-scale implementation of the program.
HD Hyundai said it will continuously monitor the business conditions of each partner company and review additional support measures as needed.
"As external uncertainties grow, the burden on our partners inevitably increases," an HD Hyundai official said. "We will expand practical support to help our partners maintain stable production activities by proactively securing key raw materials and providing financial assistance."