Shandong Tranlin invests for straw-based products

A market with consumers who want environmentally friendly products and the presence of lots of straw are two reasons why China-based Shandong Tranlin Paper Co is building a subsidiary in the United States.

And it chose Virigina as the site because of "an innovative entrepreneurship environment, transportation system, agricultural resources and high-quality labor force".

Shandong Tranlin announced in June 2014 it would invest $2 billion over the next five years to build the subsidiary in Chesterfield County, creating 2,000 jobs by 2020.

It is by far China's greatest greenfield manufacturing investment in the United States, and things have been moving smoothly since the announcement, CFO Jill Douthit said.

"We are building the first manufacturing facility outside of China here, and we are also doing marketing and sales," Douthit said. "We will be building our facility over the next three years, but in the meantime, we will import items produced in China for sales in the US as part of building up our distribution here."

She said the company decided to expand to the US not only because it has had very rapid growth in its straw-based paper and fertilizer product and US is the largest market in the world on a per capita basis for products like that, but also, because the company "realized that we had a singular technology that we could bring to scale".

According to Tranlin, the technology allows production of tree-free, non-chlorine bleached, 100 percent straw paper products made exclusively from organic agricultural field waste such as wheat straw and corn stalks. The company promises clean waters and a waste-free manufacturing process.

"The combination in the US of both a very vibrant consumer market with lots of appetite for environmentally-friendly products, as well as lots of straw which would be necessary to make it present a very significant opportunity," Douthit said.

According to Shandong Tranlin's website, the company has capital of more than $880 million, and over 10,000 employees. Shandong Tranlin has an annual productivity of 400,000 tons of refined pulp, 700,000 tons of machine-made paper, 400,000 tons of organic fertilizers, and 2.4 billion food and medical packaging boxes. The company has been named one of the top 10 paper-making enterprises in China's light industry for several years, including 2014, by the China National Light Industry Council.

The Chinese company also has an R&D center, and more than 200 patents, Douthit said.

Jerry Peng, Tranlin's chariman and CEO, is a 2003 graduate of the Darden School of Business at the University of Virginia and a member of the Darden School Foundation Board of Trustees.

Peng said that the company decided to start its US branch in Virginia for its combination of "an innovative entrepreneurship environment, transportation system, agricultural resources, and high-quality labor force."

Peng said that with the central location of Virginia, Tranlin is able to access 60 to 70 percent of US consumers with a relatively small shipping cost.

Tranlin's manufacturing facility will be located on an 850-acre campus along the James River outside of Richmond.

The US company has a small crew of fewer than 10 employees.

Liu Jingyang in Washington contributed to this story.