The company said last week that it will invest €4.6 million in the facility to be located in Suzhou near Shanghai, and expected to be completed in early 2008.

Barry Fitzsimons, commercial director at the Glanbia Nutritionals Asia-Pacific office in Shanghai, declined to reveal which products will be produced at the new plant but said it will service existing infant formula customers with its high value-added nutritional ingredients.

These currently include whey protein fractions and milk-derived minerals.

Glanbia is expecting demand for these ingredients to increase as multinationals step up their operations in Asia, and particularly China. China's infant nutrition market is booming, as parents with growing incomes spend increasing amounts on their only children. The market is expected to catch up with Japan to become the second largest baby powdered milk market after America.

Across Asia too, demand for infant formula is seeing annual growth of 10-15 per cent, much higher than that of mature European markets. Volumes are also growing with the popularity of 'growing-up milks', formula fed to older children of up to six years, when liquid milk is not readily available.

Glanbia will be competing with firms like DSM, a leading vitamins and minerals producer, and dairy co-operative Fonterra but says it has an advantage in that it can offer both dairy ingredients and vitamin and mineral premixes thanks to recent acquisitions.

"Glanbia has long historical ties to most big formula makers as Ireland has become a centre of excellence in infant formula. But we also have a broader range of products for this sector than our competitors," Fitzsimons told AP-Foodtechnology.com.

Glanbia could also supply the region's sports drinks and health foods makers with its range of dairy bioactives such as Prolibra, TruCal and Provon.

"Sports drinks are still a fledgling industry in China but with the Olympics coming we expect it to grow. There is also a stable sports drinks business in Japan," added Fitzsimons.

He said the small initial investment in China will be followed by further, bigger projects if all goes according to plan.

"We're looking at this as the first of many steps in Asia," he said.

Glanbia also announced last week a €22.5 million investment to double capacity at its joint venture consumer foods business in Nigeria and add a second facility to produce a further range of beverages.