Sun Paper Terminated Its $1.8 Billion Project in Arkansas

SCI99

2020-03-20

Sun Paper Terminated Its $1.8 Billion Project in Arkansas

According to TBP’s report on March 16, Mike Preston, the Minister of Commerce of the state of Arkansas confirmed that the state government has received an official notice from Sun Paper, which states that the company will terminate its project in Clark County, Arkansas, due to new economic uncertainties brought by the coronavirus pandemic and the lasting trade tensions.

It seemed that signs for the termination had already appeared back in February when the media reported Sun Paper’s pulp project in the U.S. was left in abeyance. The project was to be located southwest of the intersection of Highway 26 and U.S. Highway 67 in Clark County near Arkadelphia. But the Arkadelphia Regional Economic Development Alliance has put the 1,000 acres of industrial land assigned to Sun Paper back onto the market.

On November 20, 2015, the Arkansas Economic Development Commission (AEDC) inked a memorandum of investment with Sun paper over a fluff pulp project cooperation. It was the largest investment project of private Chinese enterprises in the U.S. Initially, Sun Paper planned to acquire and utilize the ample southern pine resources in the American South to produce fluff pulp and establish the largest, most advanced and most efficient single fluff pulp line in the globe. The planned investment of the project was 1.36 billion USD.

The project would have commenced in H2 of 2016 and become operational by late 2018. However, affected by the changing market scenario, Sun Paper altered the project plan to a packaging paper mill, which was to produce high-end packaging paper with virgin wood pulp. The total investment was then raised to 1.8 billion USD.

A letter from Andrzej Bednarski, the International Project Director of Sun Paper to Governor Asa Hutchinson and AEDC officials stated that the project would not move forward due to citing trade tensions, economic uncertainty, and the coronavirus outbreak, and he also suggested abandoning the project would be a better choice for both the state of Arkansas and Sun Paper.

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