Ohly supplies yeast extracts, yeast based flavours and speciality powders for the food, biotechnology, health and animal feed markets globally.
CEO of Ohly and yeast speciality proteins, Robert Rouwenhorst, said: "The yeast extract market continues to grow, especially in the Asian region, we will be placed to meet this demand."
The company reported double figure growth in the demand for yeast extract in Asia.
Group marketing manager, Tracy Scribbins, told FoodNavigator.com that this was a result of an increase in the use of convenience foods in the Asian market.
Eating habits and consumer trends in countries such as India and China have begun to mimic Western culture with the emergence of a middle class and busier lifestyles.
According to Datamonitor, the frozen food market in China increased at an average annual rate of 10.5 per cent between 2000 and 2005.
In the same period, the market for savoury snacks increased at a yearly rate of 7.3 per cent.
Scribbins said: "The expansion will strengthen the first tier market position for ABF Ingredients in readiness for future growth opportunities."
ABF Ingredients is a division of Associated British Foods focusing on high value ingredients for food and non-food areas.
The new plant will be Ohly's fourth, and it is aimed at increasing the volume of products produced to reach new customers and meet a higher demand.
It will produce ABF's full range of yeast extract specialities, aimed at the savoury food ingredients market.
It is estimated it will produce in excess of 15,000 tonnes of yeast extracts for the food and fermentation markets and will be on stream in 2009 with an investment of approximately $50m (€34.5m).
ABF Ingredients CEO, Stephen Catling, said: "This is a logical expansion to our Ohly yeast specialities business, which further complements our ability to service the market globally with our existing plants in Europe and the USA ."
The plant will be part of a joint expansion with sister company AB Mauri, the yeast and bakery division that was formed in November 2004 as a new operating division of ABF.
In the past two years, the company spent in excess of $15m (€10.4m) on selective capacity expansions in their plants in Boyceville, Wisconin and Hamburg.
At the end of 2006, the ABF group revealed that it was actively looking for opportunities to increase its presence in China's ingredients market as although it had 14 factories and 5,000 staff in the country, it had no manufacturing plants and therefore shipped most of its products from Europe.
The region now accounts for more than 20 per cent of the group's enzyme sales, with annual growth of between 25 and 30 per cent.
The company had said that China sees annual growth of 12 per cent in food applications, helped by a growing bakery industry as well as traditional flour-based foods, fruit juice processing and brewing.