Fletcher Building gets $60m from Government to keep Golden Bay Cement operating
Monday, 20 July 2026
The future of Fletcher Building’s Golden Bay Cement has been secured for now by up to $60 million of taxpayer money.
Golden Bay Cement in Northland is New Zealand’s sole manufacturer of concrete, and is also key in dealing with the mountain of end-of-life car tyres, which are collected through the national Tyrewise scheme and burnt by Golden Bay Cement as fuel.
In a statement on the NZX, Fletcher Building said the money was a “specific, one-time response to an exceptional set of circumstances”.
In return, Golden Bay Cement has committed to continue producing cement at its Northland plant until at least 2040, and to invest at least $150m through to 2040, phased over time.
Read more:
If Golden Bay Cement did not meet its obligations under the deal, the Government would be able to “claw back” its support.
“The agreement recognises the strategic importance of domestic cement manufacturing to New Zealand's infrastructure supply chain and national resilience and addresses the carbon cost disadvantage that Golden Bay Cement faces relative to imported cement,” the company said.
Finance Minister Nicola Willis said: “Ministers were advised that due to rising costs Fletcher Building Limited was considering closure of the Golden Bay Cement clinker facility in Whangārei, in favour of switching to a cheaper import-only model.”
But, she said: “The Golden Bay factory is New Zealand’s only fully integrated cement manufacturing plant and plays a vital role in our economic supply-chain.”
The agreement provided certainty for Golden Bay Cement’s continued domestic manufacturing capability and planned decarbonisation pathway, the company said.
Golden Bay Cement produces nearly 60% of the cement used in New Zealand with approximately 95% of its output sold domestically.
It is also one of Northland's largest private employers with around 150 employees, though another 450 jobs across the Whangārei district were dependent on its continued operations.
“Golden Bay Cement participated in an independent assessment which confirmed that without support, rising costs, including carbon costs, would force closure and a shift to an import-only model from 2030,” the company said.
That would have resulted in an increase in global carbon emissions as Golden Bay Cement’s carbon footprint is lower than many overseas producers, it said.
Cabinet agreed, and debated providing financial support in May.
Willis said: “Ultimately the Government determined that losing domestic cement production would leave us massively exposed to potential global supply disruptions. Cement has no practical substitutes.
“It is needed for the building of homes, hospitals, schools, roads, and other nationally significant infrastructure. Any reductions in its availability could bring essential construction and infrastructure development, and the economic activity they support, to a standstill,” she said.
Willis said: “Our Government did not take this decision lightly. Before entering negotiations we undertook a rigorous supply chain assessment of the role domestically produced cement plays in the economy, analysed the underlying financial factors at-play, and gave careful consideration to potential precedent risks. Ultimately, we concluded that this is an exceptional case, which meets the very high bar needed to justify taxpayer support.”
The company defended the use of taxpayer money, saying Golden Bay Cement had invested heavily in modernisation upgrades and alternative fuels to remove fossil fuels from its process.
“The domestic supply this agreement secures is materially lower-carbon than the imported cement it would otherwise be displaced by,” it said.
And, it said: “Golden Bay Cement has committed to invest at least $150m through to 2040 in continued operations, and optimisation, resilience and decarbonisation initiatives, at Golden Bay Cement's Northland plant.
“This investment will be phased over time and remains subject to Fletcher Building's normal capital governance and approval processes, with the specific programme to be agreed with the Government,” it said.
Andrew Reding, Fletcher Building chief executive, said: 'Domestic cement production matters for New Zealand's resilience as much as for its economics. An onshore source reduces exposure to shipping disruption, supply shocks and price volatility, an increasingly important consideration as global supply chains become more unpredictable.“
He said: 'Without Government support, increasing costs, including carbon emission costs that our competitors importing cement from overseas do not currently incur at the same level, would likely have required us to close the plant and move to an import-only model from 2030.“