Gov. Hutchinson announces jobs in El Dorado, plans for new sawmill in South Arkansas

Gov. Asa Hutchinson on Monday visited El Dorado to join local leadership and economic development officials for job announcements that will bring dozens of new jobs to the South Arkansas community, including another timberland company seeking to take advantage of the region’s diverse “wood basket.”

In his first stop, Conifex Timber Inc., a forestry and sawmilling company, announced it is modernizing and will re-start a state-of-the art sawmill complex in El Dorado, Arkansas. The job site is the location of a former Georgia Pacific paper mill that was closed nearly a decade ago and has been rumored to be the site of several other paper mill projects.

“This project provides Conifex with access to lumber and timber markets in the U.S. South. Our commitment of $80 million to this facility will ensure the long term sustainability of this site and contribute to our overall company growth,” said Conifex CEO Ken Shields. “We are pleased by the warm welcome and professionalism of the government and private sector partners we have worked with here in El Dorado and throughout the state.”

Based in Vancouver, Canada, Conifex said it will create approximately 120 new, full-time jobs as a result of its approximate $80 million commitment to the facility. Conifex is primarily engaged in the manufacturing of structural grade Spruce Pine Fir dimension and expects to produce 180 million board feet initially. Sawtimber purchases are expected to amount to 700,000 tons per year, or $30 million, from suppliers within an approximate 60-mile radius.

“Timber plays a vital role in our state’s economic vitality,” said Gov. Asa Hutchinson. “The industry directly employs more than 37,200 workers in Arkansas, and I’m thrilled to welcome Conifex to the state. This will have a significant economic impact on many families throughout South Arkansas.”

State economic development officials said Hutchinson is expected to make another job announcement later today at the Great Lake Solutions facility also in El Dorado. Great Lakes, one of the world’s leading manufacturers of flame-retardant products and bromine derivative, has some 500 employees working at three bromine manufacturing plants in South Arkansas.

Philadelphia chemical manufacturer Chemtura Corp., owner of Great Lakes, announced in late September it had entered into an agreement to be acquired by Cologne, Germany-based chemical giant Lanxess in an all-cash deal valued at $2.5 billion. Great Lakes officials said at the time that the deal would benefit company employees in South Arkansas.

CONIFEX IS STATE’S FOURTH MAJOR TIMBERLAND PROJECT IN PAST THREE YEARS
Since becoming governor just over two years ago, Gov. Hutchinson has become an effective pitchman for the state’s timberland forest region that coverages about 18.8 million acres, or about half of the state.

According to the Arkansas Forestry Commission, between 2011 and 2015 Arkansas grew approximately 25 million tons of pine timber. Roughly 16.1 million tons of pine timber were harvested leaving 8.9 million tons across the state. Sun Paper, a $1.3 billion Chinese-based manufacturing pulp plant slated for location near Arkadelphia, could use up to 4 million tons of pine timber per year, the commission said.

The Conifex project will be the fourth major announcement that Hutchinson, predecessor Gov. Mike Beebe and state economic development officials have participated in with out-of-state investors looking to take advantage of the state’s plentiful timberland resources.

From its Canada headquarters in British Columbia, Conifex acquired its first idled sawmill in Canada in 2008 and purchased a second biomass power plant two years later that has been in operation since 2015. The company has invested about $80 million in two Canadian sawmill complexes and related businesses as well as $100 million in its green power generation business, creating more than 500 jobs. This will be Conifex’s first facility in Arkansas and the southern U.S.

Hutchinson and Sun Paper Chairman and Founder Hongxin Li announced at the State Capitol in July that the Chinese paper goods conglomerate would invest more than $1 billion to build a bio-products mill in the Arkadelphia area that will create 250 new jobs at an average salary of $52,000 a year. Construction on that mega-project will begin soon after pre-engineering and environmental permitting are completed, state officials told Talk Business & Politics.

In mid-November, Boston-based Highland Pellets LLC broke ground on a 600,000 metric ton wood pellet manufacturing plant in Pine Bluff that will utilize up to 1.4 million tons per year of wood feedstock, or fiber, taken from sustainably managed private working forests in the local area. That $200 million project has hired more than 50 workers with plans to hire dozens more once new production lines are brought into operation later this year, according to Highland Chairman Tom Reilley.

Down the road in Monticello, plans for Zilkha Biomass Energy’s wood pellet production facility in that city’s industrial park have stalled. In the fall, Zilkha officials told Talk Business & Politics that construction of the company’s 450,000 metric ton manufacturing mill has been delayed due to problems in obtaining long-term contracts for the sale of the company’s patented “black pellets” used in green power generation. That project was first unveiled by former Gov. Beebe in July 2014.

All of the fiber product manufactured by Highland, Zilkha and other U.S. wood pellet suppliers will be delivered to Europe where large coal-fired power plants in the United Kingdom and other European Commission countries have either retrofitted existing units to co-fire biomass wood pellets with coal or have converted to 100% biomass.

After returning from a European trade mission last summer, Hutchinson sent letters to the UK and EU trade officials in support of the state’s timberland and burgeoning biomass industry.