Fletcher Building secures NZ$60M cement deal

• The New Zealand government has granted Golden Bay Cement up to NZ$60 million to support its Northland operations.
• Following the announcement, the Fletcher Building share price was up at $3.13.
• The agreement aims to secure domestic cement manufacturing capability and support a planned decarbonisation pathway.

Fletcher Building (ASX:FBU) has secured an agreement with the New Zealand government providing up to NZ$60 million to support its Golden Bay Cement operations.

An independent assessment confirmed that rising carbon costs would have forced a factory closure and a shift to an import-only model from 2030 without this support.

Under the new arrangement, Golden Bay Cement has committed to continue producing cement at its Northland plant until at least 2040.

The business has also pledged to invest at least NZ$150 million through to 2040 in continued operations, optimisation, resilience, and decarbonisation initiatives.

The agreement aims to protect the domestic supply chain over the long term, and following the announcement, the Fletcher Building share price was up at $3.13.

The facility near Whangārei is the only domestic cement manufacturing plant in New Zealand and supplies nearly 60% of the cement used across the country.

The company stated that the transaction is expected to secure local supply while addressing the carbon cost disadvantage the operation faces relative to imported products.