The deal recognises the strategic importance of domestic cement manufacturing to New Zealand\u2019s infrastructure supply chain and national resilience and addresses the carbon cost disadvantage that Golden Bay Cement faces relative to imported cement, Fletcher said.<\/p>\n
Golden Bay Cement plant on the waterfront. Photo \/ Tania Whyte<\/p>\n
Economic Growth Minister Nicola Willis said the decision to support Golden Bay was not taken lightly.<\/p>\n
\u201cUltimately, we concluded that this is an exceptional case, which meets the very high bar needed to justify taxpayer support,\u201d she said.<\/p>\n
\u201cBefore 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,\u201d Willis said.<\/p>\n
Economic Growth Minister Nicola Willis said the Government did not take the Golden Bay decision lightly. Photo \/ Mark Mitchell<\/p>\n
Fletcher said Golden Bay Cement operated New Zealand\u2019s only domestic cement manufacturing facility at Portland, near Whang\u0101rei.<\/p>\n
It supplies nearly 60% of the cement used in New Zealand.<\/p>\n
About 95% of its output is sold domestically.<\/p>\n
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. <\/p>\n
The agreement reflects the strategic importance both parties place on retaining domestic manufacturing capability. <\/p>\n
Golden Bay Cement has invested heavily in modernisation upgrades and alternative fuels to remove fossil fuels from its process, meaning the domestic supply this agreement secures is materially lower-carbon than the imported cement it would otherwise be displaced by.<\/p>\n
Golden Bay Cement has committed to spend at least $150 million through to 2040 in continued operations, and optimisation, resilience and decarbonisation initiatives, at Golden Bay Cement\u2019s Northland plant. <\/p>\n
An aerial view of the Golden Bay cement works at Portland, just south of Whangarei.<\/p>\n
This will be phased over time and remains subject to Fletcher\u2019s normal capital governance and approval processes, with the specific programme to be agreed with the Government.<\/p>\n
Fletcher CEO Andrew Reding said: \u201cDomestic cement production matters for New Zealand\u2019s resilience as much as for its economics.\u201d <\/p>\n
Andrew Reding (left) with Prime Minister Christopher Luxon at the NZICC opening earlier this year. Photo \/ Michael Craig<\/p>\n
An onshore source reduces exposure to shipping disruption, supply shocks and price volatility, an increasingly important consideration as global supply chains become more unpredictable. <\/p>\n
Golden Bay Cement employs more than 150 people and supports a further 450 jobs across the Whang\u0101rei district, underpinning the company\u2019s ability to build homes, hospitals, roads and infrastructure with locally sourced materials, Reding said.<\/p>\n
\u201cWithout 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. <\/p>\n
\u201cThis agreement removes that risk, providing the certainty to keep investing in domestic manufacturing, operational resilience and lower-carbon production. It\u2019s a strong example of business and Government working together in the national interest.\u201d<\/p>\n