Losses of nearly $1 billion over two years from difficult construction jobs have not deterred Fletcher Building from examining new ways to drive more revenue from profitable areas of its operations.

Fletcher today announced a $262m investment in a new wallboard factory which might be built at Drury and chief financial officer Bevan McKenzie told investors and analysts in Sydney today that would be the largest planned capital expenditure.

Fletcher will spend money on a panelisation factory which it will build in Auckland to make components for 300 to 350 new residences annually.

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But the wallboard plant is a much larger investment.

The new Winstone Wallboard factory in Auckland would employ 190 to 200 people and the business said it was New Zealand's only manufacturer of plasterboard.

The new factory will replace existing operations spread over various sites.

"This is the same number (of people) currently employed across the Auckland manufacturing and four distribution sites," the business said today.

Fletcher said that imported wallboard product was available in New Zealand.

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However analysts have noted Fletcher's dominant role in the market and its trade distribution channel via its Placemakers outlets.

Negotiations on the Drury site have not been concluded yet, the business said. But the new plant could be operating by 2021 or 2022. A resource consent application has already been lodged with Auckland Council, Fletcher said.

A larger factory is needed to meet more capacity and the existing Auckland facilities need updating, it said.

- Anne Gibson travelled to Sydney with the assistance of Fletcher Building.