Recruiting Billion-Dollar Shandong Sun Paper Mill Starts With Breakfast

(Photo Composite)
(Photo Composite)

Mark Hamer didn’t realize serendipity was on the breakfast menu at the Ross Bridge Resort on Aug. 27, 2010.

Two months into his new job as director of business development in Asia for the Arkansas Economic Development Commission, Hamer was looking to mingle with prospects at the four-day Southern Governors’ Association meeting in Hoover, Alabama.

That’s when he noticed a Chinese gentleman and a young lady seated at a large table and strode over to ask if he could join them. With Hamer making it a party of three, the morning meal was about to transform into a momentous occasion.

Hamer discovered that his dining companions were Hongxin Li, chairman of Shandong Sun Paper Industry JSC Ltd., and his daughter, Lina Li. The industrial recruiter looking to make new commercial friendships had just sat down in very good company.

“He’s so unassuming that I didn’t know I was sitting next to someone who heads up a multibillion-dollar corporation,” Hamer said. “She was educated in America and fluent in English.”

The ensuing introductions and small talk that morning began a meandering journey that culminated in a billion-dollar industrial announcement for Clark County in April.

“He said he was looking for pine trees, and I said ‘You’re talking with the right person because we have a lot of those in Arkansas,’” Hamer said. “You can’t make this up.”

The conversation marked the start of a Sino-Arkansas courtship that spanned more than five years, three AEDC executive directors, two governors’ administrations and thousands of transglobal air miles. (See Shandong Sun Paper Project Timeline.)

The future pulp mill site, five miles south of Arkadelphia, represents Shandong Sun Paper’s first North American project. Construction of the complex is expected to begin a year from now and produce 250 new jobs to staff it when fully operational in 2020.

“The key is starting a relationship and building trust,” Hamer said. “That breakfast in Alabama was the start. It took a team, a whole lot of people to bring this to fruition.”

Bill Wright, chairman of the Arkadelphia Regional Economic Alliance, was among those helping make the international pulp mill development happen.

Assembling the 1,054-acre site on the outskirts of Gum Springs involved 16 property owners, he said. Putting together the acreage entailed deals totaling more than $5 million.

Only 50 acres of the site was listed for sale by one owner, but others graciously consented to sell if it would mean landing the pulp mill project, Wright said.

“They agreed to do it for the people, for the county,” he said. “They agreed to give up something they were going to leave to their kids.”

Wright entered the picture in the spring of 2011 during Shandong Sun Paper’s first AEDC-sponsored visit to Arkansas.

Company officials looked at several sites in the Arkadelphia area and learned about the Ouachita River, the rail and road network and the local universities: Ouachita Baptist and Henderson State.

The Clark County entourage questioned company officials about the impact their proposed plant would have on air and water quality.

“We talked with them about the importance of having clean industry,” Wright said. “They assured me that the processes and technology they use are vastly improved over the plants we’re used to in the U.S.

“We shook hands with them, and I thought I would never see them again.”

But he did, 18 months later.

During that stretch, Mark Hamer and Lindsay Liu, director of AEDC’s China office, had called on Shandong Sun Paper headquarters in Yanzhou four times. Those visits by the duo included a two-week trip to China in April 2012 as part of an Arkansas contingency led by Gov. Mike Beebe.

“That trip by the governor was to fulfill a promise Maria had made to Mr. Li before she died,” said Grant Tennille, who became director of AEDC after the death of Maria Haley in September 2011.

Hamer credits Haley’s hard-sell tactics with convincing him to join the Arkansas industrial recruiting team in June 2010 and to leave Japan, where he had worked in corporate training for 11 years.

“She told me ‘You need to give back to the state that gave you your education,’” said Hamer, who grew up in Little Rock and graduated from Hendrix College in Conway. “It sounds corny, but it really resonated with me.”

Tennille and Hamer both recount an anecdote from the 2012 gubernatorial trip that served as a building block in the relationship between Shandong Sun Paper and Arkansas.

While touring the company’s museum on papermaking and corporate history, the group paused at an exhibit that featured a moped. The motorized bike was used by Hongxin Li in his youth to haul bundles of scrap paper to be recycled.

Gov. Beebe told Chairman Li that his moped reminded him of the pickup truck driven by Sam Walton, the charismatic co-founder of Wal-Mart Stores Inc.

“You must be the Sam Walton of China,” the governor said. “Your story is Sam Walton’s story, a little guy who becomes a big businessman.”

“I can tell Chairman Li really appreciated that comment by the governor,” Hamer said. “It put a smile on his face. He took it in the entrepreneurial spirit it was meant.”

During the extended visit, the Arkansas group also met with Shandong governmental officials about locating a pulp mill in the state.

“Having the governor visit was important because it brought out the highest ranking provincial officials,” Hamer said. “That communicated that Arkansas was very serious about this.”

An Arkansas visit in October 2012 by Shandong Sun Paper execs and provincial governmental officials was returned two months later by a small delegation representing Camden and Arkadelphia that called on the company headquarters.

The two cities also drew additional looks in January 2013 from Shandong Sun Paper and its consultants.

“Both communities showed very, very well and put a lot of effort of showing the best aspects of each community from schools to infrastructure, all of it,” Hamer said.

He and Liu made visits to the Yanzhou headquarters in May 2013 and April 2014, and company officials came to Arkansas to take a closer look at Camden and Arkadelphia in May 2014.

Tennille, Hamer and Liu traveled to Bejing four months later to meet with government officials to underscore the state’s interest in working with Shandong Sun Paper.

The threads of business and government are woven tightly in China’s commercial fabric. Meeting with national officials took the dialogue to another level.

“That’s why it was important to go back and have meetings with the right people in the administration so they understood we were serious,” Tennille said.

The Arkansas-Shandong Sun Paper relationship built during Beebe’s tenure carried into the Asa Hutchinson administration. The back-and-forth communication and visits gained momentum in 2015 as the company began winnowing possible plant locations.

“It started to come to fruition in 2015, but they were still looking at other sites,” said Bill Wright of Arkadelphia. “They had a hard press on us to match the incentive offer of Mississippi.”

Adding competitive juice to the storyline is Becky Thompson, who was replaced as deputy director of AEDC by Hutchinson and who began pursuing Shandong Sun Paper as investment manager of global business at the Mississippi Development Authority.

“I can’t say enough about Gov. Hutchinson and Mike Preston (executive director of AEDC) and all of their staff,” Wright said. “At the end, you’ve got to have the people with the authority to make the decisions. The governor let it be known that he wasn’t going to let it go easily.

“Sun Paper chose Arkadelphia because of the relationships that they had formed with us and the governor. I can’t give Gov. Hutchinson enough credit. This deal wouldn’t have happened without him. He has spent an enormous amount of energy on economic development.”

The billion-dollar possibility that began taking shape during the Beebe administration is taking its final form during the Hutchinson administration.

Shandong Sun Paper Project Timeline

August: Mark Hamer, director of business development in Asia for the Arkansas Economic Development Commission, meets Hongxin Li, chairman of Shandong Sun Paper Industry, and his daughter, Lina Li, at the Southern Governors' Association Conference in Alabama.
November: Hamer and Lindsay Liu, director of AEDC's China office, visit Shandong Sun Paper headquarters in Yanzhou, China. "We were told the company had already visited Tennessee, Florida, Georgia and Virginia," Hamer said.
March 30-
April 1:
Guangdong Ying, vice president of Shandong Sun Paper, visits Arkadelphia and Prescott.
May-June: Hamer and Liu visit the Shandong Sun Paper HQ. "Virginia and North Carolina seem to be their preference for locations to invest in," Hamer said.
November: Hamer and Liu visit the Shandong Sun Paper HQ. They learn the company has expanded its search globally for the best location for sourcing wood to make pulp. Russia, British Columbia and Virginia are on the list.
February: Hamer and Liu visit the Shandong Sun Paper HQ in preparation for Gov. Mike Beebe's visit in April 2012.
April: Gov. Beebe, AEDC Director Grant Tennille, Hamer and Liu visit China for 14 days. The highlight of the trip was meeting Shandong Sun Paper executives at their HQ.
October: Chairman Li, Ying and a government delegation from Jining, China, visit Arkansas. Hamer and Liu tour sites with Chairman Li and Ying.
Nov. 25-Dec. 2: Hamer, Liu, Camden Mayor Chris Claybaker, Norm MacNeill, executive director of the Ouachita Partnership for Economic Development, State Sen. Percy Malone of Arkadelphia and Bill Wright, chairman of the Arkadelphia Regional Economic Alliance, visit the Shandong Sun Paper HQ.
January: Representatives of Poyry, a forestry/paper manufacturing consulting firm based in Finland; Chairman Li and Ying visit Arkansas.
Feb. 4: Arkansas Business reports that Sun Paper is considering Camden or Arkadelphia as the location for a $1 billion pulp mill.
May: Hamer and Liu visit the Shandong Sun Paper HQ.
April: Hamer and Liu visit the Shandong Sun Paper HQ again.
May: Ying visits Arkansas. Hamer and Liu accompany him to sites in Arkadelphia and Camden.
September: Tennille, Hamer and Liu meet with Shandong Sun Paper executives in Beijing
June: Chairman Li and Ying visit Arkansas. Chairman Li visits sites in Arkadelphia and Camden with Hamer and Liu. Finishes visit to Arkansas with breakfast meeting with Gov. Asa Hutchinson.
July: Ying and engineering consultants return to Arkansas for further due diligence on both sites. Hamer accompanies him.
September: Hamer travels with Ying to Helsinki, Finland, to talk with equipment suppliers and discuss financing of the pulp mill machinery through the Finnish import-export bank.
October: Ying visits Arkansas to discuss details such as the permitting process, incentives and logistics.
November: Gov. Hutchinson, AEDC Executive Director Mike Preston; Alison Williams, director of state-federal relations for the governor; Hamer and Liu visit Chairman Li in Jinan (the capital of Shandong Province) to sign a letter of intent. The same letter of intent is signed again two days later at a ceremony in Guangzhou at the Joint Council on Commerce & Trade with Commerce Secretary Penny Pritzker and U.S. Consul General Charles Bennett in attendance.
December: Ying visits Arkansas to meet with Gov. Hutchinson and discuss the letter of intent follow-up.
January: Andrzej Bednarski, international project manager for Shandong Sun Paper, visits Arkansas to follow-up on letter of intent items.
March: Shandong Sun Paper informs AEDC that Chairman Li will be accompanied by a large delegation of government officials from Jining.
April: Chairman Li and the vice mayor of Jining visit Arkansas to negotiate the final deal and choose a location for the pulp mill. A memorandum of understanding solidifying the Arkadelphia project is signed at the State Capitol.
July: Chairman Li and Ying visit Arkansas along with the vice governor of Shandong Province, Xia Geng, and meet with Gov. Hutchinson.