China's Sun Paper Cancels Kraftliner and Pulp Mill in Arkansas

China’s Shandong Sun Paper Industry has dropped its plans to build a pulp and board mill in Clark county in the state of Arkansas.

The Shenzhen-listed company's international project director informed Arkansas Governor Asa Hutchinson and the Arkansas Economic Development Council (AEDC) of the decision in March.

“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.

Arkansas Commerce Secretary Mike Preston confirmed the move with local media and said there have been no incentives paid to the company.

In September 2019, Sun Paper’s wholly-owned subsidiary Sun Bio Material (U.S.) Company was granted an air permit with five years of validity by the Arkansas Department of Environmental Quality to build two kraftliner machines and one high-yield softwood kraft pulp line at a 1,000-acre (405-ha) industrial site in Arkadelphia, Clark county.

Sun Paper first signed a memorandum of understanding with the AEDC in 2016, planning to build a 700,000-mtpy greenfield fluff pulp and bio-refinery mill.

In early 2017, it emerged that the planned project would be shifted to dissolving pulp production instead.

A year later, local media in Arkansas reported the Chinese company would add linerboard capacity to the project and boost the total investment from the original $1.3 billion to $1.8 billion.

Despite the cancellation of the US project, Sun Paper is continuing its expansions in China.

It has signed up domestic supplier Shanghai Qingliang Industry to provide two 25,000-mtpy tissue machines for its flagship mill in Yanzhou city, Shandong province, with startups expected by the end of this year.

Each unit will have a trim width of 2.85 m and a design speed of 1,600 m/min.

The move is the company’s first tissue expansion in about five years.

Sun Paper entered the tissue business in 2013 when it launched a range of converted tissue products. Later it commissioned its first two tissue machines, both in Yanzhou; one in 2014, and the other in 2015. Each of them has a capacity of 60,000 mtpy.

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