The site will have a capacity of 50,000t of butter and should be completed within the next 18 months, pending planning permission.
The IDB said it hoped the site would continue the growth of its Kerrygold brand and help the business expand following the abolition of milk quotas in 2015.
Kerrygold reached record sales of 350M packets sold worldwide last year and is now the number one butter in Germany and top imported butter in the US, according to the IDB.
A spokeswoman for the IDB told FoodManufacture.co.uk: “Looking at the Kerrygold brand, reaching 350M, is it clear to see the huge opportunities.
“We already have a high class facility in Germany and we are looking to mirror that success here with a world class packaging and butter facility. We are also looking at milk post quota and the opportunities that will come from that.”
The site will help the IDB to respond to double digit growth in the US and its core UK market as well as continue expansion into the Middle East, Russia, Africa and China, she added.
The 50 jobs will be created in manufacturing roles at the new site, but there is scope for more to be created at an innovation centre – also planned for the new site.
For a brand to remain relevant and competitive it needed to have a new product development centre and in order to maximize the potential of this it has to be as close as possible to the production site, the spokeswoman claimed.
“Consumer needs are ever changing and this facility will enable our new product development team to develop new products to meet their tastes,” she added. “More and more when we invest in new facilities it is becoming a necessity to have an innovation centre.”
Kevin Lane, IDB ceo, said: “Our continuing investment in brand growth, new product development and in-market expansion is designed to ensure that our members and suppliers can expand on the basis of sustainable market demand.
“The abolition of milk quotas in 2015 will present the Irish dairy industry with its first opportunity for meaningful expansion in the past 30 years. Our strategy is to ensure that IDB members and dairy farmers are optimally positioned to participate in this expansion opportunity through enhanced routes to market and sustainable, market led products.”
Meanwhile, the IDB announced a strong annual performance for 2013 yesterday (Wednesday April 16).
Turnover increased by 5% to over €2.1bn (£1.7bn) with earnings before interest and taxes up 25% to €25.8M (£21.2M), between December 28 2012 and December 28 2013.