Shandong Sun Paper has dropped its plan to build a $1.8 billion paper plant in Clark County that was projected to add 350 employees and provide 3,000 additional jobs in supporting industries.
The company notified state economic development officials Monday that the project won't go forward.
"It is with great regret that we inform you that our Sun Bio mill project in Arkadelphia, Arkansas will be terminated," the company said in a letter to state and local economic development officials who have been working on the project since it was announced nearly four years ago.
"The current situation related to the coronavirus outbreak and continued political friction and economic instability make it impossible for us to proceed with the project within the timelines set forth in the environmental permit," said the letter, signed by Andrzej Bednarski, international project director for Sun Paper.
That letter was addressed to Gov. Asa Hutchinson and the Arkansas Economic Development Commission, which led the effort to land the project on a 1,000-acre site. A similar letter was sent to Clark County economic development officials who worked on the project.
The announcement was not entirely unexpected -- the project has been on rocky ground for several months, beginning last fall with economic tension raised by the U.S.-China trade and tariff war. The coronavirus threat added another troubling challenge.
Still, the formal announcement was disheartening.
"It's a big disappointment for everyone involved," Arkansas Commerce Secretary Mike Preston said Monday. "Lots of hard work, from the local community to our state partners, went into to seeing this project succeed."
Preston stressed that, while the state had pledged incentives to help bring the project to Arkadelphia, no financial payments have been made.
"It's important to note there have been no incentives paid to the company, and we are evaluating how we might use the de-obligated funds for other economic opportunities," Preston said.
Steve Bell, president and chief executive officer of the Arkadelphia Regional Alliance, received a similar letter, addressed to him, from Sun Paper.
Bell expressed his disappointment in losing the project but had nothing but good things to say about the relationships fostered between local officials and company officials.
"While the letter is disappointing, it is nice to know that a genuine friendship was formed between all of us," Bell wrote in reply to Sun Paper's letter.
In the Sun Paper letter, Bednarski noted the manpower and time commitment by all parties to bring the paper mill to Arkansas. Nevertheless, it's time to move on to other projects, he said.
"With the likelihood of the project uncertain, it is also fair to allow the State of Arkansas to use its resources for other ventures that have less uncertainty in the medium term," the letter said. "At this moment, the collective uncertainties make it a better choice for both of us to abandon the project."
The company is proud of the relationships it built in the state, Bednarski wrote. "Over the years, we have not only become partners and colleagues, but we have also made life-long friendships," the letter said. "Therefore, it is with regret and a heavy heart that we have reached the decision to terminate the project."
Officials in Clark County have similar feelings, Bell said in sharing his response to Sun Paper.
"We hope to continue the friendship long into the future," Bell responded. "Please stay in touch and we will do the same. You all are always welcome in Arkadelphia whenever you visit the United States. You can consider this your second home when you are in America."
Last month, Clark County economic development officials said they would begin marketing the property they were holding for Sun Paper.
Moving forward, Bell said another company already has visited the property that had been set aside for the Sun project. "I had a company who was doing a site visit and wanted some more information about it," Bell said. "They were looking at areas in the region and realized we had a large tract of land, too. There is some positive signs out there."
Business on 03/17/2020