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Mike Preston: Forrest City Yarn Factory on Hold Amid Trade Fight

2 min read

Two major economic development projects in Arkansas are caught up in the trade fight between the United States and China, and one is now on hold, Arkansas’ economic development office said Monday.

In 2017, Shandong Ruyi Technology Group announced it would revamp the old Sanyo television plant in Forrest City, turning the 1.4 million-SF plant into a cotton-yard factory and employing up to 800 people

But Mike Preston, executive director of the Arkansas Economic Development Commission, told the Wall Street Journal in an interview published Sunday that the project is on hold amid uncertainty about a new trade deal between the United States and China.

The Journal reported that another project — Shandong Sun Paper Industry’s $1.8 billion plan to build a plant to produce linerboard for shipping boxes near Arkadelphia — had also been postponed. But Brandi Hinkle, the AEDC’s director of communications, told Arkansas Business that the project is moving ahead.

“Sun Paper is still a go,” Hinkle said. As Arkansas Business reported in December, the company changed its original plans for the plant — to produce bleached dissolving pulp used to make rayon — causing it to begin the permitting process anew. Hinkle said the company is still going through the permitting process with the state Department of Environmental Quality.

In Forrest City, Ruyi Technology Group planned to refashion the former television factory into a vast yarn factory capable of consuming Arkansas’ entire annual cotton crop. The $410 million project was expected to be up and running by the end of last year.

In the Journal interview, Preston blamed the delay on the trade fight between the two countries.

“This is the heart of the Mississippi Delta, an area that could really utilize the jobs,” Preston said, according to the Journal article. “But the timeline has been a moving target. It’s been delayed significantly…they can get cotton from other countries and I think that’s what they’ve been doing.” 

Ruyi officials didn’t respond to requests for comment.

Hinkle told Arkansas Business on Monday that the state is hopeful that the Forrest City project will come back online once the countries reach a new trade agreement. She noted that Ruyi still owns the property.

In all, investment between China and the U.S. has declined amid the trade fight. The Journal reported that investment flow between the countries fell to $19 billion last year, from $60 billion in 2016.

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