A planned Chinese bio-paper mill project in Arkansas has been canceled.
Shandong Sun Paper has terminated the project, which was slated to be a $1.8 billion investment in Arkadelphia that was expected to employ approximately 350 individuals and create thousands of jobs. In a March 15 letter to Gov. Asa Hutchinson, Shandong Sun Paper Co. International Project Director Andrzej Bednarski wrote that the company would not be moving forward with the project.
Bednarski attributed the decision to the going trade dispute between the United States and China, as well as the coronavirus outbreak which is impacting both countries. “With the likelihood of the project uncertain, it is also fair to allow the State of Arkansas to use its resources for other ventures that have less uncertainty in the medium term. At this moment, the collective uncertainties make it a better choice for both of us to abandon the project,” Bednarski wrote.
Sun Paper has already made significant investments in the Arkadelphia site, commissioning an environmental and archeological study and obtaining an Arkansas Department of Environmental Quality air permit and a water permit to draw water from the Ouachita River.
“Over the past several years, the State of Arkansas / AEDC team and the Sun Bio team have worked tirelessly on the project. We have both invested large amounts of capital and labor, not to mention heart, in pushing the project forward,” Bednarski wrote. “Personally, we greatly appreciate your continued support for the project during the negotiation, site selection and environmental permitting phase.”
Arkansas Secretary of Commerce Mike Preston says Sun Paper’s decision to abandon the mill project is a “big disappointment.”
“It’s a big disappointment for everyone involved. Lots of hard work, from the local community to our state partners, went into to seeing this project succeed,” he said in a statement. “It’s important to note, there have been no incentives paid to the company, and we are evaluating how we might use the de-obligated funds for other economic opportunities.”
In February 2020, officials with the Arkadelphia Alliance and Area Chamber of Commerce announced plans to begin marketing the Clark County “super-site” after Sun Paper “paused” the project. The chamber’s CEO, Stephen Bell, said at the time that he wasn’t ruling out Sun Paper as an occupant for the site but that the chamber had to be proactive in recruiting business to the area.
The Sun Paper project is one of two Chinese projects that was announced for Arkansas. The second project is a textile mill that Shandong Ruyi intends to build in a former Sanyo manufacturing facility in Forrest City. According to AEDC officials, the Shandong Ruyi project is “on hold indefinitely.”