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Sun Paper Considering Other U.S. States for $1.36 Billion Pulp Mill

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According to a report this past week by the Arkansas Democrat-Gazette, Little Rock, Ark., USA, a Chinese company that expressed interest in November of 2015 in building a $1.36 billion pulp mill in south Arkansas is also considering other states for the mill.

"While we continue to work on finalizing this deal, there isn't anything prohibiting them from looking outside of the state," said Mike Preston, executive director of the Arkansas Economic Development Commission. "However, when we signed a letter of intent in November, Sun Paper and Shandong province officials made it clear that their desire is to build a mill in south Arkansas."

A timber industry source said this week that Sun Paper is also considering one or more locations in Mississippi. Scott Hardin, an Arkansas Economic Development Commission spokesman, said Sun Paper recently told the agency that it was evaluating other states but did not identify them. A spokesman for the Mississippi Development Authority wouldn't say this past Wednesday whether his agency is attempting to attract Sun Paper.

"We can't confirm or deny what may or may not be an economic development project," said Jeff Rent, public relations manager for the Mississippi agency.

Efforts to locate a Sun Paper representative in Arkansas were unsuccessful at the time of this report. The Chinese company, which employs more than 10,000 people worldwide, announced its interest in south Arkansas in a Nov. 23, 2015, stock exchange disclosure. The company then signed a letter of intent with Governor Asa Hutchinson and Preston while the two were on a trade mission to Japan and China.

The proposed mill would have a production capacity of 700,000 tpy of pulp. That means the mill would need to harvest around 3 million tpy of timber, said Matthew Pelkki, a professor and holder of the George H. Clippert Endowed Chair of Forest Economics at the University of Arkansas at Monticello.

The letter of intent was not a commitment to locate a plant in Arkansas. It referred to the state and Sun Paper's mutual intent "to study the feasibility of building a pulp mill in the state of Arkansas." Arkansas was to be responsible for proposing incentives for the project, including preferential tax policies and other policy supports by May 1 of this year, according to the stock exchange disclosure. May 1 was also the deadline for the company to choose a location, according to the letter.

At least two Arkansas cities reportedly are under consideration: Arkadelphia and Camden. Both are in the state's timber belt and have features that stand to make them attractive for the plant. Camden has an abandoned IP mill and an abundant water supply. Arkadelphia has quick access to Interstate 30.

Stephen Bell, president and CEO of the Arkadelphia Regional Economic Development Authority, said he wasn't aware that Sun Paper was looking outside the state.

"I just know they were interested in us, and we've hosted them here," Bell said.

Arkansas has been working to attract a Chinese company for a large project for several years. After a trip to China in 2012, former Governor Mike Beebe said he had talked with two companies there. One was identified as aligned with timber interests in southern Arkansas, Beebe said.

If it materializes, the Sun Paper plant would be the largest "superproject" in Arkansas. To qualify for incentives, a superproject must employ at least 500 workers and invest more than $500 million in the state.
 

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