The new facility will allow the Edinburgh-based oatcake and biscuit manufacturer to increase its gluten free output with its current site hitting full capacity.
A significant part of the investment will fund greater levels of automation, essential to maintain the company’s ability to operate in an increasingly competitive “free-from” market.
The UK free from market continues to show sustained and impressive growth, with Gluten Free products the driving force.
Martyn Gray, managing director, said: “Production at our current site has reached a ceiling, with no scope to grow.
“We need the greater capacity and lower cost base which the increased automation at the new site give us, to secure and develop the long term sustainable future of the business.”
Nairn’s is currently the UK’s 2nd biggest Gluten Free producer having entered the sector in 2010.