CHINESE FIRM still plans mill for state, but now is not the time, governor says.

Sun Bio delaying project, he learns

Sun Bio still intends to build a $1.8 billion mill in Clark County, but it doesn’t make sense to do so now, given the the international trade climate, Gov. Asa Hutchinson said Thursday.

The delay isn’t the Chinese government, which is locked in a trade war with the United States, he said.

“The encouraging thing I learned in regard to projects is that despite the international disputes surrounding trade, the government of China is still forward-leaning in terms of encouraging their businesses to do investments,” Hutchinson said. “There’s not any obstacle in terms of the government as it relates to the Sun Paper investment.”

Rather, he said, it is the uncertainty in the manufacturing sector that has made Sun Bio reluctant to move forward, the governor said.

“You have to understand the hesitancy … [but] I’m very encouraged it is still in the pipeline,” he said.

Hutchinson made the comments during a videoconference from Japan that was set up to allow reporters in Little Rock to ask questions. Hutchinson and state economic development officials are on a weeklong trade trip to Chi-

na and Japan. They are scheduled to return Saturday.

The Sun Bio project in Clark County, announced three years ago, received an air permit in September from what is now the Arkansas Department of Energy and Environment and Division of Environmental Quality.

Some 350 people will be employed at the mill when it opens. Each job will pay about $52,000 a year, the company has said previously.

Investment in the project is now pegged at $1.8 billion, up from $1.3 billion, after Sun Bio parent company Shandong Sun Paper Industry changed the project’s mission in early 2018. The change forced the Chinese company to restart the application process for the necessary air and water permits.

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.

But other obstacles for the company remain, Hutchinson said. They include ensuring that financing is in place and that Sun Bio “can get the support that’s needed in terms of getting the technical expertise in.”

The trade war between China and the United States also is an obstacle, Hutchinson said.

“If you build a paper mill in the United States and you ship goods back to China, you’re going to be subject to a retaliatory tariff,” he said. “That was not part of the original business plan for Sun Paper. That is an item that came up since then.”

But the governor said Arkansas will be “first in line” when the trade war ends.

“We all sense we’re closer to a China trade deal than ever before,” he said.

His comments came the same day that it was reported that the United States and China have agreed that an initial trade deal between the two nations will roll back a portion of the tariffs placed on each other’s products.

Ray Dillon, a Sun Bio representative in Arkansas, accompanied the state delegation on the China portion of the trip, Hutchinson said. The state didn’t pay for Dillon’s travel or accommodations, he added.

Hutchinson spoke Thursday from Tokyo. The state delegation arrived in Nanjing, China, on Sunday and spent two days and part of another in China before traveling to Osaka, Japan.

The delegation is meeting with business executives and government officials to touch base with companies already doing business in Arkansas, to support ongoing projects that have been announced but not yet completed and to reach out to companies that are considering investing in the United States.