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Management Side
A year later, Tranlin site sits mostly dormant

CHESTERFIELD, Virginia (From the Chesterfield Observer) -- Nearly 10 months ago, top officials from Chesterfield and Gov. Terry McAuliffe stood, shovels in hand, with Chinese corporate executives to break ground on the Tranlin pulp and paper mill, which at $2 billion represents the largest investment by a Chinese company in Virginia history, if not the nation's.

For Chesterfield, it was a major coup.

"We are more confident now than we were a year ago that our project is being built on a solid foundation that will allow it to be successful in Chesterfield," said Hongfa Li, chairman and president of Shandong Tranlin Paper Co., parent company of Tranlin, which wants to start limited production in 2018 and be fully operational by 2020.

Today, however, there is little physical evidence that much has happened with the much-ballyhooed project.

Tranlin, which maintains an office in Charlottesville, so far has built next to nothing in Chesterfield, save for a temporary construction hut at the end of a dirt road in the eastern end of the county near the James River.

One day last week, a locked beige trailer with a small Tranlin sign plastered on the side appeared deserted. About a mile away, there was no visible activity in the sprawling field where the pulp mill is expected to be built.

"They've had trouble getting a parcel of land," explained a truck driver headed to an adjacent industrial business last week, who asked to remain anonymous.

Tranlin has yet to purchase the lion's share of the approximately 850 acres it needs to build its paper-making factory. It also hasn't applied for much-needed construction and environmental permits, according to county and state officials.

The company acquired a 60-acre site along Willis Road for $3.18 million in April of last year, according to county real estate records. A company official said Tranlin is working on securing another parcel but has yet to close on the sale.

As of Monday afternoon, Tranlin still hasn't acquired the largest chunk of the paper mill's proposed site: a 650-acre parcel owned by Reynolds Real Estate Ventures LLC, real estate records show.

A Tranlin official told Richmond Biz- Sense, an online business news site, in April 2015 that the company expected to close on the Reynolds property by the end of that June. That was 13 months ago.

"We're in the process of finalizing that," said John Stacey, a Tranlin senior vice president.

Asked last week about any possible delays, Stacey said repeatedly that the project is on schedule.

"Nothing is slow," he added. "With a project of this size, you've got to go through a huge planning process, hiring the engineers, hiring the construction firm and then applying for the permits."

In addition to acquiring the property, Stacey said, Tranlin is busy planning the construction of the plant and working on air, water and excavation permits. But to date, state and county officials say they have yet to receive the company's first permit request.

Kyle Winter, deputy director of the Virginia Department of Environmental Quality's Piedmont regional office, said last week his office has no pending Tranlin permit applications.

Scott Smedley, director of the county's Environmental Engineering department, said the same during a telephone interview Monday morning.

Reached by phone late last week, Stacey said he doesn't know exactly how many and what type of permits are needed, but the project is "huge" and preparing them is complicated. Still, he insisted the planned paper mill wasn't behind schedule.

At the groundbreaking last October, dignitaries highlighted what they said were the unique and beneficial attributes of the "green" facility.

Instead of using trees, Tranlin plans to buy leftover farm waste from regional farmers. It does not use chlorine in its production process, so there is less chance of water and air pollution. In addition, Tranlin says an organic byproduct of the production process can be turned into high-grade fertilizer that will be sold to farmers.

A Tranlin official told the Richmond Times-Dispatch that a "demonstration farm" - to show farmers the benefits of its byproduct fertilizer - would be constructed on the site as early as this year. Stacey told the Observer that a farmer is growing crops relevant to the paper production on the property now, but no actual "demonstration farm" has been built. Stacey added that a greenhouse is planned for the site.

In the meantime, Tranlin has opened a website through which farmers can buy fertilizer, which is being imported from the Shandong Tranlin Paper Co. plant in China's Shandong Province. Americans can also buy the plant's paper products, such as disposable plates.

The idea, Stacey said, is to build up a customer base for Tranlin's products after the Chesterfield facility goes into production.

The Chinese paper industry had been on a tear since 2002 as economic growth rates in the Middle Kingdom consistently clocked in the double digits. Production increased at an average of 10.9 percent each year until 2012, according to data compiled by RISI, a Boston-based firm that analyzes the global paper industry.

Since 2012, however, the paper growth rate has dropped to 3 percent a year. RISI analysts described this as a "striking difference" from the "golden age" when the Chinese paper industry was booming. RISI expects demand to fire up as the Chinese middle class strengthens and fuels demand for paper products.

Stacey, however, says the Chinese paper industry slowdown hasn't affected the Chesterfield project.

"We're moving as fast as we can," he added.

Once up and running, Tranlin's Chesterfield plant is expected to create 2,000 jobs. At the moment, the company has hired about 40 people, including engineers who periodically visit the project site from China.

Stacey said hiring should start in earnest once Tranlin begins construction, but declined to offer a timetable.

"It's a fluid situation," said Steve Elswick, chairman of the county's Board of Supervisors, adding that the board hasn't been informed of any changes to Tranlin's plans. "A lot of components have to come together."

The county's transportation department is proceeding as if it expects the Tranlin facility to be in full production by 2020.

Staff are finalizing a $500,000 report on potential improvements to the Interstate 95-Willis Road interchange, which county officials say are needed to handle additional vehicle traffic that will be generated by the nearby Tranlin plant.

During a February 2015 Board of Supervisors meeting, then-County Administrator Jay Stegmaier said the interchange has a "1950s design that we think is inadequate for today's world."

At that same meeting, Jesse Smith, director of the county's transportation department, noted that the Virginia Department of Transportation has committed to perform a traffic impact analysis on the interchange.

"While they're doing that, we're going to work with [the county's] economic development [staff] and Tranlin to get a better idea of what their process is going to involve - both in employee and truck traffic, as well as possibly barge and rail," Smith said.

The 95-Willis Road interchange improvements are expected to cost about $44 million.

The state declined to provide funding for the project last year. Smith expressed hope last week that completion of an Interchange Modification Report will help facilitate its approval through the state's Smart Scale process.

The county must submit its list of transportation priorities to the state by Sept. 30. Smith said that if funding is available by July 2017, it's realistic to think the interchange project can be completed by the time Tranlin expects to be fully operational.

"It's tight," he added. "There's not a lot of room between now and 2020."


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