Gov. Hutchinson says permit approved for $1.5 billion Sun Paper project; heads to Middle East, India

Nearly four years after announcing the state’s first blockbuster deal with China, Gov. Asa Hutchinson on Monday (Sept. 23) said the state Department of Environmental Quality (ADEQ) has finally approved an air permit to begin construction on the much-awaited $1.5 billion Sun Paper pulp mill in Arkadelphia.

The globe-trotting Hutchinson also said Monday he will take to the friendly skies this weekend on the first of two upcoming trade missions overseas to reboot foreign investments in Arkansas and reinvigorate the stalled pipeline of foreign jobs now under threat. Those travels will begin Saturday when Hutchinson and Arkansas Secretary of Commerce Mike Preston head to United Arab Emirates (UAE) on a first-ever state visit to the Middle East nation.

Following the visit to Dubai, Hutchinson and Preston will travel to India from Sept. 29 to Oct. 6 as part of efforts by the Trump administration to enhance economic development tie between the countries. Hutchinson, as co-chairman of the Council of Governors, is among the first of several official trade visits from five U.S. governors to India. While there, Hutchinson said he will express support to Mumbai-based Welspun Tubular, whose sprawling facility at the Little Rock Port Authority manufactures 36-inch pipeline for the 1,100-mile Keystone XL Pipeline.

The trip will also include visits to several Indian business prospects, along with meetings with the nation’s export association and the U.S.-Indian Chamber of Commerce.

“I will be promoting Arkansas in that arena of the world and continuing to market the state,” said Hutchinson during one of his infrequent media availabilities at his State Capitol office that was dominated by questions about the state Board of Education’s recent decision to return the Little Rock School District to limited local control.

CHINESE COUNSEL GENERAL VISIT
Later, at the friendlier confines of the Governor’s Mansion, Hutchinson held a luncheon with the newly appointed Chinese Consul General Cai Wei of Houston, who was visiting the state to actively promote business ties and cooperation between Arkansas and China. At that meeting, Hutchinson revealed that he and an Arkansas trade delegation will return to China in November, the fourth such visit to the Far East nation since he took office in early 2015.

In August, Wei was named the new consulate general for China’s Houston office, which handles Chinese relations across the Southeast U.S. in Arkansas, Alabama, Florida, Georgia, Louisiana, Mississippi, Oklahoma and Texas. At his meeting with Hutchinson, Wei proudly said he was happy to make his first official state visit to Arkansas.”

“Arkansas is the first state I done since I assumed my post in Texas. I am excited about it,” Wei said during a talk with reporters at the Governor’s Mansion. “I try to establish a friendship between China and Arkansas, and we look forward to the governor’s trip to China and the very good news about the (Sun Paper) project.”

Careful not to comment on any actions or comments made by President Donald Trump, Wei said his diplomatic role was to encourage mutual cooperation and respect between the world’s two largest economies.

“I will bring the good news back to China and talk to my people, the investors and the Chinese businesses, that they are welcome here and especially in Arkansas,” said Wei. “And the governor of Arkansas is coming to China, which will make them feel at home.”

Besides Houston, the People’s Republic of China has its main embassy office in Washington D.C., but also maintains five consulates-general in New York, Chicago, Los Angeles and San Francisco. Hutchinson said he held the luncheon to talk trade issues with Wei and introduce him to Arkansas’ Chinese business partners and community.

“We talked the ongoing investments from China that located here, and as you know we got the air permits for Sun Paper and we discussed that investment and the opportunity there,” said Hutchinson. “I thanked the Counsel General for their support on these projects and of course we going to be having a grand-opening on one of them up in Jonesboro in the future, and we invited (Wei) there as well.”

Concerning his fourth trip to China, Hutchinson said he, Wei and Preston worked on the agenda for that trade visit to Beijing later this fall. Hutchinson made his first official to China in November 2015, where he returned to Arkansas after signing a “letter of intent on investment cooperation” with Chinese-based Shandong Sun Paper Industry Joint Stock Co. to pursue a then $1 billion pulp mill. Later in April 2016, during a historic ceremony at the State Capitol, Hutchinson and Sun Paper Chairman and Founder Hongxin Li signed a memorandum of understanding to bring the super project to Arkansas’ “wood basket” region. About a year later, Sun Bio filed its initial application for a Title V air permit with ADEQ pre-engineering and environmental permitting for the original bio-products mill in Clark County.

TRADE ISSUES
About that same 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.

In May, hearings were held in Arkadelphia on Sun Paper’s permits to build the multibillion-dollar facility, 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.

At Monday’s meeting, Hutchinson admitted that 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, Little Rock, Danville and Forrest City. However, he said, relations between the state and China are good.

“It is a high compliment that Arkansas is the first state that Consul General has visited since he’s been here,” said Hutchinson. “What I hope is communicated nationally is that while there is friction between our two countries at the highest level, when it comes to the people-to-people, business-to-business level, there is a positive relation and recognition that our economies benefit each other.”