The Surrey-headquartered company, which supplies high quality cartons, leaflets, labels and foil to the pharmaceutical industry from 10 sites across Europe, aims to open the new factory in Wolfen to replace its existing premises by summer 2012.

Contego Packaging also upgraded its Portsmouth facility in September as part of ongoing investment at the company, which was taken over by Platinum Equity earlier this year.

Contego chief executive officer Tom Reid said: "The new facility in Germany will be focused on northern Europe, mainly Germany, France and neighbouring countries. We are upgrading some of our buildings because they were not as efficient as they could have been. Our previous facility in Germany had a lack of warehouse space whereas the new building gives us room for future growth.

"We will also have production and warehousing under one roof enabling a more efficient workflow and ensuring we continue to comply with good manufacturing practice."

Reid declined to give details on how much the company is spending on the new facility but the plant is expected to employ 110 once up and running.