The move will create 200 jobs at the site in Cambridgeshire, more than doubling staff at that location and boosting the firm’s global headcount by 50%.

Annual production capacity of the firm’s 1001 product will increase to 45,000 units, which will come on stream by the end of 2012. It follows the investment to double production at the site from the current 10,000 units to 20,000 units by the end of 2011.

"We’re starting to see a real transition towards inkjet as it becomes an established production technique," said Xaar chief executive Ian Dinwoodie.

He said that the firm had been "somewhat surprised by the aggressive take-up" of the 1001 head this year following a tricky start, but added that the increase in capacity would put the firm back on track with its initial projections, which had been thrown off by the global recession.

Demand for the 1001 heads is currently running at double the firm’s ability to deliver.

The principal applications today are for ceramic tile decoration and narrow-web labels, which account for 60% and 25% of 1001 heads respectively.

By 2012 they are expected to be joined by decorative laminating, product decoration, advanced manufacturing and some wide-format graphics applications.

Total investment in the new facility will be £22m. In addition to the £14m that will be used from the share placement after expenses, the firm will add in the outstanding amount from a combination of cashflow and lease finance.

The share offer was revealed alongside the firm’s interim management statement for its third quarter. In addition to increased demand for the platform 3 products, sales of its platform one products remained stable while it recorded a significant increase in royalty payments.

"Wide-format and grand-format print continues to grow, which is shown in the increased licence fees from our partners," said Dinwoodie.