Air permit paves way for pulp mill

Sun Bio received an air permit Monday from the state, allowing the company to begin construction of a $1.8 billion pulp mill first announced for Clark County more than three years ago.

Some 350 people will be employed at the mill when it opens — up from the 250 employees projected in April 2016. Each job will pay about $52,000 a year, the company has said previously.

Investment in the project also increased from $1.3 billion to $1.8 billion when Shandong Sun Paper Industry changed the project’s mission in early 2018. That change forced the China-based company to restart the application process for the necessary air and water permits from what is now the Department of Energy and Environment and its Division of Environmental Quality.

The mill is expected to provide another 1,000 jobs in the logging industry and more than 2,000 jobs during construction, officials have said.

“We’re excited to finally get the news,” Stephen Bell, president and chief executive officer of the Arkadelphia Regional Economic Development Alliance, said by telephone Monday afternoon. “The effect of this is, they can start construction whenever they want.”

Bell said he andother local leaders met Monday morning in Arkadelphia with Cai Wei, consul general of the People’s Republic of China in Houston, in advance of the permit announcement and as part of a local delegation’s planned trip in three weeks to visit Sun Bio’s headquarters in Shandong province.

State officials, including Gov. Asa Hutchinson, have

said for months that they were confident Sun was sticking with the project, despite evidence that the U.S. trade war with China had, at best, delayed plans by two other Chinese companies to build a pet treat production facility in Danville and a garment manufacturer in Forrest City. Both of those stalled projects were announced in 2017, with projections of 75 workers in Danville and about 800 in Forrest City.

Bell said that, while tweets from President Donald Trump during the ongoing trade war raised concerns and questions, “the Chinese never slowed the process when it came to the permit applications. We talked to them frequently and got regular updates.”

Sun initially expected to build a bio-products mill — to produce rayon from dissolved pulp — but switched plans to the production of unbleached linerboard used in shipping boxes, high in demand because of online sales and overnight shipping. Its revised permit application called for daily production of 4,400 machine-dried tons of linerboard.

The mill will be at Arkansas 26 and U.S. 67 near the Gum Springs community, south of Arkadelphia.

State officials negotiated with the company for more than four months on the project. Arkadelphia officials began working on the project about four years earlier.

“We’re happy to see Sun Bio reach this milestone and appreciate ADEQ for their hard work to get this permit finalized,” Secretary of Commerce Mike Preston said in a statement. “We look forward to Sun Bio now taking the next steps to bring the project to fruition.”

State incentives to Sun Bio include a cash rebate equal to 5% of new payroll for 10 years; sales tax refunds on building materials, machinery and equipment; a $12.5 million grant for site preparation and equipment; up to $3 million for workforce training; and a $50 million collateralized loan provided through multiple state sources.

An incentives package from Clark County and Arkadelphia includes $10 million to help offset infrastructure costs, drawn from the county’s 0.5% sales tax that has been collected for nine years for economic development.

Another incentive provides about $92 million in the form of a 65% county property-tax discount over 20 years.