The government is investing $3 million in the creation of New Zealand's first 100 per cent recycled plastic food packaging range.
Pact Group Ltd will make recycled packaging for meat and bakery trays, and deli, food and produce, food and containers.
Its new Auckland plant will allow recycled Type 1 or PET plastic to be decontaminated and made back into food packaging.
Associate Environment Minister Eugenie Sage says the grant enables Pact Group to prioritise this project ahead of many others.
"This is a major step forward for a company that is the largest manufacturer of rigid plastics packaging products in Australasia."
Eugenie says recycling plastics for food containers was part of an effective response to China's National Sword policy that restricted the amount of waste imports it accepted.
"This new plant will contribute usefully to increasing New Zealand's on-shore recycling infrastructure," Eugenie says.
"Like other countries, New Zealand's economy to date has been based on a 'take, make and dispose" model, which treats nature and the resources it provides as 'free' and disposable.
More materials recovery and local re-processing infrastructure helps us shift to a more sustainable and efficient circular economy, where products are designed to have a long life, and materials can be recovered and easily reused, recycled, remanufactured," Eugenie says in a statement.
The funding from the Ministry for the Environment's Waste Minimisation Fund amounts to half the total cost of a new manufacturing plant.