The company will also take this opportunity to target further turnover growth after securing an £8 million working capital facility from Lloyds Bank Commercial Banking.
The pet food company, which owns a fifth of the UK wet dog-food market and has a turnover of £93m, will increase its current 260,000 sq ft factory in Northampton by 50%.
"This is an enormous market with great opportunities not just in the UK, but across the continent," said Francis Powell, finance director at Butcher's Pet Care. "We've seen the business grow consistently over the years and, with this factory expansion, we are on track to continue this growth well into the future.
"Lloyds Bank took the time to really get under the skin of our business, tailoring a financial facility that freed up cash flow for us to embark on our most ambitious development in years."
The £7m factory expansion will allow production to reach a capacity of over 1,200 cans per minute.
Lloyd Bank's Commercial Banking's working capital facility is expected to increase cash flow, with the business investing in additional floor space and machinery. The expansion is predicted to be completed by October this year.
Industry worth £3bn
"Almost half of people in the UK share their homes with a pet, so it's no surprise that the industry is worth close to £3bn," said Francesco Magli, client manager at Lloyds Bank Commercial Banking.
"As one of the UK's leading pet food suppliers, and a key manufacturer with international aspirations, Butcher's Pet Care is a great business for us to support.
"Having had a 10-year relationship with the company, alongside our specific sector knowledge, we were able to create a bespoke facility that suited Butcher's exact needs. Across Britain, we're supporting businesses with tailored working capital facilities, such as invoice factoring, discounting and asset-based lending - giving them the toolkit they need to grow."
Butcher's Pet Care began in the back of Graham Baker's abattoir in 1987, after customers were looking for tripe to feed their pets. The firm currently employs 300 people.