Fletcher Building (ASX:FBU, NZE:FBU) said New Zealand's government granted its Golden Bay Cement unit up to NZ$60 million as part of an agreement to support the subsidiary's continued operations in the country, according to a Monday filing with the Australian and New Zealand bourses.
Golden Bay operates New Zealand's only domestic cement manufacturing facility, supplying about 60% of the cement used in the country, per the filing.
The agreement follows an independent assessment, which showed that without support, rising costs would force the facility's closure and result in a shift to an import-only model from 2030.
Golden Bay committed to continuing cement production at its Northland plant until at least 2040, and to invest at least NZ$150 million through to 2040 in operations, optimization, resilience, and decarbonization initiatives, the company said.
Fletcher Building's New Zealand shares gained 1% in recent Monday trade.