Early payments aim to ease cash-flow pressure on partners facing raw material, equipment and payroll costs

SM Group's Sinchon headquarters building. [Provided by SM Group]
SM Group's Sinchon headquarters building. [Provided by SM Group]

SM Group's construction affiliates have paid subcontractors ahead of schedule to ease their financial burden before Chuseok.

SM Group announced Tuesday that Samra Co., SM Line's construction division and SM Steel's construction division had all released subcontract payments earlier than originally planned ahead of the holiday.

The period just before major holidays is typically one of the most cash-intensive in the construction industry, as payments for raw materials, equipment rentals, and employee wages and bonuses all fall due at once. The strain on subcontractors has grown in recent months as a real estate slump, rising interest rates and higher raw material and construction material prices have converged.

In response, Samra Co., SM Line's construction division and SM Steel's construction division moved up their subcontract payment schedules to help partners manage their cash flow.

SM Group said it expects the early payments to support subcontractors' financial stability around the Chuseok period.

"We hope these payments will be like rain after a long drought for our partners, who are struggling amid a frozen construction market," an SM Group official said. "Going forward, we will continue to develop and put into practice various measures to overcome difficulties together and grow alongside our partners, based on mutual trust."

Meanwhile, Samwhan, SM Group's construction-sector affiliate, opened a model home for "Hwaseo Station Lake Park Honorsville," a pre-sale housing project in Seodun-dong, Gwonseon-gu, Suwon, Gyeonggi Province, on Sept. 11, kicking off its sales schedule.


quq@heraldcorp.com