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Sun Paper, Hutchinson Sign Intent Letter to Study $1.4B South Arkansas Plant

2 min read

A long-planned paper plant in south Arkansas has taken another step forward. Shandong Sun Paper Industry on Monday signed a letter of intent with Gov. Asa Hutchinson and the Arkansas Economic Development Commission to study build a $1.4 billion pulp mill in the area.

The Chinese company wants to break ground in 2016 and start operations in 2018. Hutchinson and AEDC Executive Director Mike Preston signed the document toward the end of the pair’s trade mission across Japan and China.

Arkansas Business first reported on the projected February 2013, with early reports suggesting the pulp mill could employ 350 in one of two two south Arkansas towns: Arkadelphia or Camden. Other sources later put Crossett in the running.

More: Read the full letter of intent.

The cities are ideally located within Arkansas’ timber industry. Camden has an abandoned International Paper Co. site and bountiful water supply, and Sun Paper has also has a joint venture with IP produce high-quality ivory board for liquids and food packaging. Arkadelphia boasts quick access to Interstate 30.

The project has been in the works at least since former Gov. Mike Beebe’s trip to China in April 2012, after which he hinted of two strong business possibilities, including one related to the timber industry. 

Monday’s agreement doesn’t say where the plant might be located and only affirms Sun Paper’s and AEDC’s “mutual intention to study the feasibility of Sun Paper’s investment in Arkansas.” Instead, the agreement establishes a timeline for certain project milestones, culminating in “site selection” by May 1.

“The objective of this Letter of Intent is to identify and define the mutual intent between Sun Paper and AEDC with regard to study the feasibility of building a pulp mill in the State of Arkansas; and the State of Arkansas hosting Sun Paper for its first North American operation,” the letter states.

The agreement hinges on “continued support of the AEDC and successful conclusion, to the satisfaction of Sun Paper and its investment partners, regarding negotiation of incentives, discussion with other public agencies, and other open items related to the project’s success.” 

A Reuters report put the value of the proposed plant at $1.36 billion, which would qualify the project for Amendment 82 bonds. Approved by Arkansas voters in November 2004, Amendment 82 allows the state Legislature to approve up to 5 percent of the state’s general revenue budget to be used for bonding of “super” economic development projects.

The only economic development project to take advantage of Amendment 82 is the Big River Steel plant, a $1.3 billion project under construction now near Osceola in northeast Arkansas.

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