520 Billion Investment Project at Risk of Collapse... LG Household & Health Care Bottled Water Faces 'Sudden Blow' Due to Government Regulations

Last-Minute Halt Before Launch of 'Ulleung Saemmul' After 52 Billion Won Investment

[Asia Economy Reporter Seungjin Lee] The ‘Ulleung Spring Water’ project, jointly pursued by LG Household & Health Care and Ulleung County, Gyeongbuk Province, with an investment of 52 billion KRW over four years, is facing the risk of being canceled. Although the water intake facility was scheduled to be completed within this year and the trademark application was finalized to start the Ulleung Spring Water project next year, the Ministry of Environment has intervened at the final stage of the project.

According to industry sources on the 12th, the production plant under construction by LG Household & Health Care for the Ulleung Spring Water project is nearing completion in early December, but the Ministry of Environment has reportedly communicated its intention to disallow the project, citing violations of the Water Supply Act. LG Household & Health Care and Ulleung County have revised their project plans multiple times over the past four years to reflect the Ministry of Environment’s feedback, but the Ministry’s last-minute intervention just before the project launch has left them bewildered.

Regarding this, a Ministry of Environment official stated, "In the case of Ulleung Spring Water, it violates Article 13 of the Water Supply Act," adding, "Structurally, Ulleung Spring Water qualifies as tap water, and tap water cannot be arbitrarily extracted and sold by private companies." The official explained, "Tap water is defined as water that uses all facilities for supplying raw or purified water, and since Ulleung Spring Water uses a water pipe branched from the raw water tank, it is clearly tap water."

In 2018, LG Household & Health Care and Ulleung County established the joint venture Ulleung Spring Water aiming to become the second Samdasoo (Jeju Island). LG Household & Health Care invested 50 billion KRW, and Ulleung County invested 2 billion KRW, totaling 52 billion KRW. Ulleung County provided the factory site and permit support, while LG Household & Health Care took charge of development, manufacturing, and sales. Ulleung Spring Water naturally produces up to 32,000 tons per day. Some of this is used as domestic water and tap water, while most is used for hydropower generation before being discharged into the sea. LG Household & Health Care and Ulleung County plan to extract about 1,000 tons per day from this for bottled water sales.

Initially, LG Household & Health Care intended to build the production plant at the estimated source of the spring water, but following the Ministry of Environment’s opinion that private facilities cannot be built in water source protection zones, the plant was planned outside the protection zone with water supplied through a separate pipeline. However, the Ministry of Environment’s stance that "under current law, it is tap water, so the project itself is impossible" has put the entire project at risk of cancellation.

The production plant is currently over 90% complete, and the Ministry of Environment’s intervention at this late stage is expected to deal a significant blow to Ulleung County and LG Household & Health Care. The plant is a three-story building with an area of 5,128㎡, and 39.2 billion KRW has been invested solely in its construction. LG Household & Health Care had planned to complete the plant in December and launch Ulleung Spring Water early next year, but the Ministry of Environment’s intervention has cast uncertainty over the project’s future.

This content was produced with the assistance of AI translation services.