The Government has granted Golden Bay Cement up to $60 million to keep New Zealand's only domestic cement manufacturer operating in Northland, in return for a commitment to produce cement at the plant until at least 2040.
The deal, announced on the NZX by Fletcher Building today, was intended to provide certainty for the continued operation of the Portland plant near Whangārei, which supplies nearly 60% of the country's cement.
Economic Growth Minister Nicola Willis said ministers had been advised that rising costs had led Fletcher Building to consider closing the clinker facility in favour of a cheaper import-only model, and that Cabinet had weighed the case for time-limited support in May.
"Ultimately the Government determined that losing domestic cement production would leave us massively exposed to potential global supply disruptions," Willis said, noting cement had no practical substitutes and was needed to build homes, hospitals, schools, roads and other infrastructure.
Under the terms of the deal, Golden Bay Cement must maintain domestic cement manufacturing until at least December 31 2040, commit at least $150 million of its own investment, maintain jobs, and submit to additional reporting and auditing, with the Government able to claw back funds if obligations are not met.
The company took part in an independent open-book financial assessment which Willis said confirmed binding constraints on the viability of domestic cement production, primarily due to emissions costs.
Willis said the Government had considered alternative forms of regulatory relief but wanted a lowest-cost approach that did not undermine the Emissions Trading Scheme.
"The agreed approach strikes the right balance, preserving a strategically significant domestic capability without creating a precedent for wider support, or undermining the integrity of the ETS," she said.
Fletcher chief executive Andrew Reding said domestic cement production mattered for New Zealand's resilience as well as economics, as an onshore source reduces exposure to shipping disruption, supply shocks and price volatility.
"Golden Bay Cement directly employs more than 150 people and supports a further 450 jobs across the Whangārei district, underpinning our ability to build homes, hospitals, roads and infrastructure with locally sourced materials."
Reding said without Government support, increasing costs - including carbon emission costs that overseas competitors do not currently incur at the same level - would likely have required the company to close the plant and move to imports from 2030.
"This agreement removes that risk, providing the certainty to keep investing in domestic manufacturing, operational resilience and lower-carbon production," he said.
The funding was provided for in Budget 2026 as a tagged contingency. The company is one of Northland's largest private employers and, according to a BERL economic impact assessment, supports $124.7 million in total annual expenditure across the Whangārei district.
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