Sun Paper coming, state says others now intrigued

The success of landing Chinese firm Sun Paper's $1 billion pulp mill near Arkadelphia in April has helped Arkansas line up other international business prospects, executives with the state's economic development commission said Friday.

"We've done a lot of work and gotten a lot of good positive momentum out of China after the the Sun Paper announcement," said Mike Preston, executive director of the Arkansas Economic Development Commission. "A lot of companies have been interested. Hopefully some of those can come to fruition. With Chinese companies, you have to be patient. In our eyes, we might think it's ready, but in Chinese culture it's not necessarily to that point."

Lindsay Liu, the China office director for Arkansas, has worked over the past year with several Chinese companies that are interested in Arkansas, Preston said. Preston and Gov. Asa Hutchinson are returning to China next month, Preston said.

Also working with Liu to attract businesses to Arkansas are Neal Jansen, 33, who has been the Japan office director since 2011, and Cornelius Schnitzler, 37, the European office director since July. In Little Rock, Mark Hamer, director of business development for Asia, and Lenka Horakova, director of business development for Europe, also work on the commission's international business. The commission's annual international budget is $615,000

"They are helping us to generate leads and mature those into active projects and ultimately successful announcements," said Danny Games, the commission's deputy director. "The collective acumen of all five of them helps us go after this large market outside North America."

There are 150 foreign-owned companies from 28 countries with locations in Arkansas, led by Germany with 30 subsidiaries and Japan with 21. The 150 companies have 37,000 employees in the state.

Over the past five years, 14 percent of all jobs created in Arkansas and about 25 percent of the money invested has been from foreign-owned companies.

Liu, Jansen and Schnitzler flew to Arkansas early this month and met with representatives of about 50 Arkansas cities. They made presentations in all four congressional districts, including in Northwest Arkansas, Little Rock, Jonesboro, Stuttgart,West Memphis and El Dorado.

The presentations lasted about an hour and then the cities had 10 minutes to make presentations, Games said.

It was the first time all three international directors had the opportunity to visit the state together, Preston said. Jansen is originally from Arkadelphia, Liu is from China and Schnitzler is from Germany.

"We thought it was important so they could understand more about the state they represent," Preston said. "But also it was important to give the communities the opportunity to meet them so they could learn more about doing business in China, Japan and Europe."

The international directors first focus on companies large enough to open foreign locations, said Schnitzler, who is based in Berlin.

"There are a number of big, brand-name companies that would be great for the state of Arkansas to have," Schnitzler said. "They are like a magnet. Once you have them in the state, others will follow."

Jansen said he looks for companies that are ambitious globally and have obvious gaps in their manufacturing network worldwide.

"We also look at the natural-resources profile of Arkansas," Jansen said. "If there is a particular commodity where the prices make sense for a lot of companies, then we'll appeal to certain companies in certain sectors. [Other factors are] Arkansas' affordability, its available labor force and the strength the company can get from being located in the center of the North America."

Liu said she attends major investment events to enhance the visibility of Arkansas.

"That's the big picture," she said. "We also look at the companies that already export their products to the U.S. In China, the government is very important. The companies trust the Chinese government, so they ask for guidance from the government. So if you can engage the Chinese government, it will be beneficial a lot."

Chinese officials may tell her that a company is considering opening a location in the U.S. or they are trying to buy another company, Liu said.

And when the commission gets leads in Little Rock from sources about companies considering locating in the U.S., it can tell Schnitzler, Jansen or Liu to contact the company if it is nearby, Preston said.

"We already have people on the ground who have established relationships," Preston said.

Business on 09/10/2016

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