State regulators to hold public hearing on permit for Sun Paper’s $1.5 billion paper mill

The Arkansas Department of Environmental Quality (ADEQ) will hold a public hearing May 30 at Henderson State University to accept comments on the agency’s decision to issue an air permit to begin construction on Sun Bio Material’s $1.5 billion pulp mill in Arkadelphia.

Sun Bio, the Arkansas subsidiary of Chinese paper goods giants Shandong Sun Paper, first announced the project during an historic ceremony in April 2016 where Gov. Asa Hutchinson and Sun Paper Chairman and Founder Hongxin Li signed a memorandum of understanding to bring the super project to Arkansas’ “wood basket” region.

Sun Bio filed its initial application for a Title V air permit in March 2017 with ADEQ pre-engineering and environmental permitting for the original $1 billion bio-products mill in Clark County. At the time, Sun Paper officials said they hoped to begin construction on the project in the first quarter of 2017, but that timetable was pushed back due to permitting and other considerations. Those plans included an additional $500 million investment expanding the size and scope of the mill to manufacture cardboard products that package goods shipped by Amazon, Walmart and other online retailers.

The hearing at Henderson State will focus on Sun Bio’s permits to build the multibillion dollar facility in Arkadelphia, which will be located southwest of the intersection of Highway 26 and U.S. Highway 67.

The pulp mill will be sized to support an approximate, nominal linerboard production capacity of 4,400 machine dry tons per day at varying base weights, ADEQ officials said. Individuals may review the permit and the administrative record at ADEQ’s headquarters in North Little Rock, Arkansas. Link here to see the draft permit.

The public comment period on Sun Bio’s draft air permit began on April 21 and will expire at 4:30 p.m. on May 21. Additional comments will be accepted at the public hearing in Arkadelphia, which will start 6 p.m. at Henderson State’s Community Education Center, located on 640 S. Sixth St.. Comments submitted during the hearing may be either written or oral, ADEQ officials said.

According to the one-line summary detailing Sun Bio’s initial permit application, the Chinese paper goods giant is seeking a “major source” unified air permit for construction and operation. In one scenario of the pre-construction permit process provided by ADEQ officials, the sprawling project will likely need two storm water permits – one for the construction phase of the project that will begin after the air permit is granted and an operational certification once the facility is built – and a wastewater discharge permit.

Based on the memorandum of understanding signed by state economic officials and Sun Paper, the Chinese company does qualify for a full toolbox of state incentives, including Create Rebate and Tax Back programs, sales exemptions on equipment, property tax abatement, a recycling tax credit, customized training for company workers and the development of an intermodal facility for a public rail yard located at the Gum Springs site.

However, the project will not qualify for super project status under Amendment 82, which allows the state to issue bonds to pay for infrastructure improvements on projects that exceed $500 million in investment and create at least 500 jobs. Sun Paper officials have said the project will create thousands of direct and indirect jobs once construction starts and 250 positions that pay an average of $52,000 a year once the paper mill begins operations.

Gov. Hutchinson and state economic development officials have said the Trump administration’s ongoing trade negotiations with China has slowed the pace of the Sun Paper project and other job ventures with the Far East nation, including smaller manufacturing developments in Jonesboro and Forrest City.

In late April, Arkansas Economic Development Chief Mike Preston told Talk Business & Politics that the state’s Chinese projects are “strong” overall, saying he didn’t see a downside to the eventual U.S.-China trade agreement to end the ongoing tariff wars. That trade imbroglio roiled world markets last week after President Donald Trump announced he planned to raise tariffs on $200 billion worth of Chinese goods. China has since followed up with plans to impose up to $60 billion in retaliatory tariffs on U.S. goods.