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Shandong Sun Paper Considering New Fluff Pulp Mill in South Arkansas

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According to a recent report by the Eldorado News-Times, El Dorado, Ark., USA, a breath of financial hope and promise came earlier this week when Gov. Asa Hutchinson signed a letter of intent to pursue establishing a $1.3 billion fluff pulp mill in southern Arkansas.

The Associated Press reported that, "Gov. Asa Hutchinson has signed a "letter of intent on investment cooperation" with Chinese-based Shandong Sun Paper Industry Joint Stock Co. to pursue a $1.3 billion pulp mill to be located in south Arkansas."

In attendance at the signing ceremony were U.S. Secretary of Commerce Penny Pritzker, Gov. Hutchinson, Chairman and Founder of Sun Paper Co. Hongxin Li, Arkansas Economic Development Director Mike Preston, and U.S. Consulate General Charles Bennett.

It is "a new business that would come to southern Arkansas to a yet-unspecified location. We don’t know where, only that it will be Southern Arkansas, and that is a big area. It covers 10 to 12 counties and two or three rows of counties," said Robert Reynold, chairman of the El Dorado Economica Development Board. "Southern Arkansas is as specific as it gets," he said. "We hope it comes here."

"The agreement moves forward efforts between Sun Paper and Arkansas economic development officials for a fluff pulp factory, which would primarily create materials for baby diapers and other products. If the plant moves forward, it would be Sun Paper’s first North American operation.

"This is a first step in a long process, but the significance of the letter of intent is that Sun Paper commits to looking at Arkansas for a location for a $1.3 billion pulp mill and it sets out a specific timeline for them to make a site selection, hire consultants and do the necessary due diligence to establish the mill," Hutchinson told Talk Business & Politicsin a phone call from China.

Since the plant would produce fluff pulp, that means it "needs young pine trees, so that is us. Young pines are not available in western, northern, or eastern Arkansas. There is no way to know where it will be," Reynolds said. "It is a good first step for southern Arkansas. The State of Arkansas is our big sister. They have the right attitude and will steer a client in the right direction." 

The report from TB&P goes on to say, "The letter of intent sets a May 1, 2016, date to finalize a site for the project, which would create "hundreds of direct jobs" and result in "very significant" indirect jobs in the logging and timber industry in south Arkansas. The governor said specifics beyond those numbers would be difficult to estimate at this point in negotiations.

The agreement states that pre-engineering would begin after May 1 as well as environmental permit activity and an intermodal railroad facility study.

Hutchinson also said it was too early to know which state economic development incentives might be used and how large those incentives might be. Hutchinson also said Sun Paper is interested in regenerating electricity from its operations in Arkansas and is seeking a connectivity study in conjunction with Entergy Arkansas and MISO to gauge the potential impact on the electric grid.

Sun Paper describes itself on its web site as "one of the most advanced transnational enterprises of papermaking and integrator of forest-pulp-paper, one of the biggest private enterprises in China, the biggest high class coated wrapping board production base, and the leading enterprise of food wrapping paper board."

Sun Paper is publicly traded in China and has a market cap of roughly 26 billion Yuan – about $4.16 billion, according to conversion rate as of November 22. It is headquartered in Yanzhou, the hometown of Confucius, and launched in 1982. Sun Paper employs nearly 10,000 people worldwide. 


 

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