The Edinburgh-based firm said the expansion comes on the back of increased demand and will enable it to bring products currently in development to market, but will result in a drop in the size of its gluten-free workforce.
Nairn’s said its main premises on Peffermill Road and its 135 staff will not be affected by the changes.
However, the move will result in a reduction in the number of employees at the company’s gluten-free bakery.
The number of permanent team members working on gluten-free products will fall by around 30, to 27. In addition, the fixed-term contracts of around 30 non-permanent workers will not be renewed when the move takes place.
Managing director Martyn Gray 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.
“Though the reasons behind this major investment are very positive – sustaining and growing our strong position in an increasingly competitive market – the move will regrettably mean that we will be employing fewer people in our gluten-free business in the immediate and short-term.”
Gray added: “We are hopeful that our growth will continue and that this will create opportunities in the future. The UK market is already worth almost £500 million and is expected to see growth of more than 40 per cent in the next few years.”