The Chinese company Shandong Sun Paper announced last week that work would go ahead on a $1bn paper mill in southern Arkansas.
This project will be the most modern, the highest efficiency, the most environmentally progressive factory in the pulp and paper industry in all of North America– Li Hongxin, Sun Paper Chairman
The mill will be used to process wood into "fluff pulp", a material required to make sanitary products such as diapers.
The project was put on track in November last year, when Sun Paper Chairman Li Hongxin (pictured) signed a memorandum of understanding with Arkansas officials at a ceremony in the northeastern Chinese city of Jinan, which was attended by Penny Pritzker, the US Commerce Secretary, and Asa Hutchinson, the governor of Arkansas.
At that time its value was put at $1.4bn, making it the largest ever industrial investment in the state. It is not the largest Chinese paper investment in the US, however. In 2014, Shandong Tranlin Paper invested $2bn in a paper and fertilizer plant in Virginia.
Shandong Sun Paper officials said they hoped to begin construction in the first half of 2017. The scheme is expected to take 30 months to build.
For the announcement that work would commence, Mr Li came to the Arkansas state capitol in Little Rock. He said: "This project will be the most modern, the highest efficiency, the most environmentally progressive factory in the pulp and paper industry in all of North America."
Arkansas state officials said they expected the plant, which will be built about 65 miles southwest of Little Rock in the city of Arkadelphia, to employ 2,000 people during its construction and create an additional 1,000 jobs indirectly in the timber industry.
One they made earlier: the company’s giant Yanzhou City factory, in Shandong Province (Shandong Sun Paper)
Governor Hutchison commented: "It will result in a real boost to the economy of south Arkansas throughout the timber industry. I not only think about the 250 direct jobs, but also the log haulers, those in the fields and the timber industry that will benefit from this extraordinary project and investment."
According to the memorandum signed in Jinan, the average salary for jobs at the mill will be $52,000. In return, the project is receiving $10m in infrastructure spending and $92m in local property tax abatement.
The state is providing $12.5m for site preparation and equipment, up to $3m workforce training funds and a $50m loan. Other state incentives include cash rebates based on its payroll, sales tax refunds on construction materials and a recycling tax credit.
The state also has agreed to expedite the process for approving the air and wastewater permits.
Shandong Sun Paper is based in Jinan and employs 10,000 people worldwide. It is China’s largest privately owned paper-making enterprise.
Top image: Li Hongxin, chairman and founder of China’s largest private paper firm (Shandong Sun Paper)