The Welsh Development Agency's mid Wales division will build the 70,000 sq ft extension for Aeron Valley Cheese at Felinfach near Lampeter.

The state-of-the-art facility will receive �611,400 of grant aid from the National Assembly for Wales as well as assistance from the WDA.

WDA board member Robin Lewis said: "Aeron Valley Cheese provides an important role in rural Wales and this development will bring much-needed jobs to the area and a welcome boost to the region's dairy farmers."

Aeron Valley Cheese is a subsidiary of Milk Marque Developments.

MDF's chairman Poul Christensen said the investment would allow Aeron Valley to build on its success as a premium Welsh brand.

Production has doubled

Among the cheeses produced at Felinfach are Welsh Mild Cheddar, Welsh Farmhouse Cheddar, Welsh Mature Cheddar, Red Leicester and Gloucester.

Manufacturing capacity at the company's production site at Aeron Valley Enterprise Park has doubled over the past two years following the installation of new cheese-making vats and block-forming towers.

The new development will increase storage capacity and allow more cheese to be matured on site.