While prospects abound for Arkansas in the Middle East and India, new Chinese investments have largely ground to a halt in Arkansas and U.S., according to Arkansas Secretary of Commerce Mike Preston.
Preston, who appeared on this week’s edition of Talk Business & Politics, said the U.S.-China tariff battles have curtailed a variety of economic endeavors in every state, including Arkansas.
“We’ve seen the slowing of Chinese companies interested in Arkansas, interested in the U.S. I mean I think that’s collectively as a whole. It’s not isolated to Arkansas,” he said. “We’ve been successful the last four years in recruiting companies and getting a lot of interest. That’s dried up. There’s not companies in China right now looking to do investment in the U.S. until this issue is resolved. It’s put the brakes on that for now.”
That said, this coming week Chinese-based manufacturing giant Risever will officially open its $20 million Jonesboro facility. Hefei Risever Machinery is a Chinese-based heavy equipment parts manufacturer that will locate in the Craighead County Technology Park employing 130 workers. Preston said it’s imperative to resolve trade differences in order to re-ignite what has been a fruitful pipeline for Arkansas.
“I know that China is the second largest economy in the world. We need them to continue to be prosperous. They need us to continue to be prosperous,” said Preston, who added that he’s not concerned with potential trade secret threats with the Chinese companies locating in the Natural State.
“I’m very confident in the companies that we’ve located here that are not a security threat to Arkansas or to our national security. I feel pretty confident in that,” he said.
Preston also updated on two other Chinese-based investments — Sun Paper, the $1.5 billion pulp plant slated for near Arkadelphia, and Ruyi, an earlier-announced $410 million Forrest City cotton textile manufacturing project. With an air permit approved for Sun Paper, Preston said he will be meeting with the chairman of the company soon to talk about next steps.
“They were able to get a couple waivers before the tariffs went into place and some of the equipment that’ll be coming over here for their facilities. Now that we’ve cleared this hurdle here at the state, we’re kind of looking to them to continue to move the ball forward. Obviously there’s some hesitation with the Chinese government right now until things get worked out. On the Ruyi side, I think they’ve completely put the brakes on that one until something gets resolved.”
MIDDLE EAST, INDIA
Preston, Arkansas Governor Asa Hutchinson and others traveled two weeks ago to the United Arab Emirates (UAE) and India to recruit new prospects for foreign investment in the state as well as to open export markets. Preston said these were areas where the governor knew there could be capital for investments along with initial connections to open doors.
“It [UAE] is a place the doesn’t grow a whole lot on their own so they import a lot. There’s opportunities for us to export more there. But you look at the wealth that they’ve accumulated over the last 20, 30 years. Obviously a lot of it due to oil. They’re looking to diversify that portfolio they have. They’re looking to make investments in companies. They’re looking to invest in technology, and healthcare, and agriculture and all the things that we have right here in Arkansas,” he said.
First Orion, the telecom technology company led by former Acxiom CEO Charles Morgan, has opened an office in Dubai. As it turned out, Morgan was in UAE when the Arkansas delegation was traveling through.
“It just so happened that he and his team were there the same time we were so we were able to piggyback on a couple of meetings that they had and share and talk about Arkansas. It was great to have someone who’s learned and experienced like Charles has as a businessman in Arkansas to tell that story over there,” Preston said.
India-based Welspun Pipes has a major manufacturing facility in Little Rock that employs around 1,000 workers. Preston and Hutchinson called on their parent company and discussed additional investment opportunities between the state and Welspun’s owners.
“We got to spend a lot of time with their chairman and CEO and talk about new opportunities. They’re one that they’re very diversified, too. Welspun, we know it here as a pipe company. In India it’s known as a company that makes textiles. In every hotel room you go in, you have Welspun towels and bedding. At one end of the spectrum it’s hard steel, at the other end it’s soft as you can get with towels,” Preston said.
“We know that there’s additional opportunities for them. They’ve seen the success that they’ve had in Arkansas and we wanted to talk to them about new expansion opportunities both at the mill here, but maybe some of those other portfolio companies that they have under their purview. What would be the opportunities to have them come into Arkansas? There’s a lot of synergies there,” said Preston, also noting that India-based Tata Consulting has a presence in Bentonville and Little Rock.
You can watch Preston’s full interview below.