LITTLE ROCK, Ark. — The Chinese company Sun Paper announced plans Tuesday for a $1 billion mill in southern Arkansas, the paper company’s first facility in North America.

Joined by Sun Paper officials to announce the project at the state Capitol, Gov. Asa Hutchinson said the project will create 250 jobs and is one of the largest private investments in Arkansas’ history. Company and state officials said they expected the project to employ 2,000 people during its construction and create an additional 1,000 jobs indirectly in the timber industry.

“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,” Sun Paper Chairman and Founder Hongxin Li said, speaking through an interpreter, at a news conference at the state Capitol.

Company officials said they hoped to begin construction in the first half of 2017 on the mill, which will be used to convert wood into pulp to be used for paper production, and said it will take two and a half years to build. Based in Shandong Province, Sun Paper employs 10,000 people worldwide and is China’s largest privately owned paper-making enterprise, according to the company’s website.

The new plant will built about 65 miles southwest of Little Rock in the city of Arkadelphia. An Arkansas economic development official said earlier this month that Sun Paper was also considering Mississippi for the mill.

“It will result in a real boost to the economy of south Arkansas throughout the timber industry,” Hutchinson said. “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.”

Hutchinson, a Republican, traveled to China last November and met with Sun Paper officials. He signed a letter of intent then to study the feasibility of building the plant in Arkansas.

The average salary for jobs at the mill will be $52,000, according to a memorandum of understanding the company signed with state and local officials. The project is receiving $10 million in local incentives for infrastructure at the site and another $92 million in local property tax abatement. The project will also receive several incentives from the state, including 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 necessary for the project.