The Chinese company behind the planned $1.8 billion Sun Paper plant in Clark County has officially canceled the project, Arkansas economic developers confirmed Monday.
"Today we received notification from Sun Paper officials they will not be moving forward with the project in Clark County, due to the new economic uncertainties brought on by the Coronavirus (Covid-19) and the ongoing trade dispute," Commerce Secretary Mike Preston said in a statement to Arkansas Business on Monday.
"It's a big disappointment for everyone involved. Lots of hard work, from the local community to our state partners, went into seeing this project succeed. 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."
The notification was first reported by Talk Business & Politics.
Word of cancellation comes a little more than a month after the Arkadelphia Regional Economic Development Alliance announced it was preparing to market the project's 1,000-acre industrial site to other prospects.
The alliance has retained ownership of the property and was working to get it certified by Entergy Arkansas for development.
"We have to answer to Clark County residents," Bell told Arkansas Business on Feb. 10.
Shandong Sun Paper Industry, the Chinese parent company, had originally planned a $1.3 billion pulp plant, but in 2018 changed the scope of the project to a paper mill that was expected to cost about $1.8 billion. Environmental permitting had to start over, and the development was then delayed by escalating trade tensions between China and the United States.
In a letter to Gov. Asa Hutchinson and the Arkansas Economic Development Commission, the company's international project director, Andrzej Bednarski, wrote:
"The current situation related to the coronavirus outbreak and continued political friction and economic instability make it impossible for us to proceed with the project within the timelines set forth in the environmental permit. 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 said the company had made life-long friendships with people who had worked on the project.
"We remain committed to the friendships we have made over the years with the state of Arkansas, and we are willing to cooperate in finding other suitable industrial partners for the project or the site," he wrote.