The Ministry of SMEs and Startups (MSS) and the Korea Fair Trade Commission (KFTC) honored a group of companies on Thursday for setting new benchmarks in fair supply-chain practices, spotlighting firms that have embraced the country’s price-indexation system and helped normalize its use across industry. MSS and KFTC hosted the annual awards ceremony at the Mondrian Seoul Itaewon, marking the event’s third year.
 
Introduced in 2023, the price-indexation program requires buyers and suppliers to share the impact of significant raw-material price swings that occur after a contract is signed. For policymakers, the scheme is a practical tool for reducing volatility in SME supply chains and encouraging more balanced relationships with large corporations.
 
This year, 16 companies were recognized for their leadership in adopting and advancing the mechanism. Ten firms, including KIA and Daedong, received awards from the MSS Minister, Han Seong-sook, while Doosan Bobcat Korea, Volvo Group Korea, and four others were honored by the KFTC. Seven individuals were also commended for contributions to strengthening fair-trade practices.
 
The ceremony was followed by a best-practice session, where KIA and Doosan Bobcat Korea outlined how they have incorporated indexation into day-to-day operations.
 
KIA reported one of the strongest performances to date, adjusting more than KRW 325 billion in contract prices this year alone. By applying indexation to materials with highly volatile prices – such as aluminum – the company increased payments to suppliers by KRW 54.6 billion, directly easing cost burdens amplified by global market conditions. KIA has also encouraged adoption beyond its first-tier partners, sharing guidance materials and reinforcing internal processes to help embed indexation across its supply chain.
 
Doosan Bobcat Korea shared its experience managing indexation at scale, having signed agreements covering more than 60,000 subcontracting transactions with 55 suppliers. The company strengthened its contract-management system and appointed dedicated staff to review and apply adjustment requirements, ensuring that changes triggered by exchange-rate movements or raw-material spikes are reflected quickly and consistently.
 
Companies selected as Outstanding Price-Indexation performers will receive a range of incentives, including reduced penalty points under the Win-Win Cooperation Act, exemption from certain ex officio investigations for up to two years, and additional points in evaluations related to fair-trade agreements.
 
Speaking at the event, MSS Second Vice Minister Lee Byeong Gweon described indexation as “an effective buffer against raw-material volatility, particularly in a year dominated by high tariffs and exchange-rate pressures.” He noted that the ministry will continue building practical support systems, including a raw-material price database, and explore further incentives for companies that demonstrate strong commitment.
 
KFTC Vice Chair Nam Dong-il highlighted efforts to close knowledge gaps that may lead to unintentional non-compliance, citing the rollout of operational guidelines and handbooks for businesses. He emphasized that the commission will continue working to strengthen the system’s effectiveness, from expanding its scope to addressing avoidance practices, while ensuring that compliant firms receive appropriate recognition.
 
Both MSS and KFTC stated that they will continue supporting companies to deepen adoption of the indexation system, with the long-term aim of embedding a more resilient and cooperative supply-chain culture across Korean industry.

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