It confirms Glanbia's strategy to focus on health and should strengthen its competitive edge in a sector that has led the innovation of functional foods across the food industry.
Glanbia already has a R&D centre at Twin Falls, in Idaho, which services the US nutritional market and its unit Glanbia Nutritionals, set up at the end of 2002, is also headquartered in the US. The new Irish centre, expected to be ready by September, will focus on the European market.
Glanbia already develops consumer products and functional foods such as its Avonmore Milk Plus probiotic milk and functional yoghurts but it needs a strong R&D capability to maintain growth in this area.Functional dairy is one of the most innovative functional foods sectors in Europe, making up around 30 per cent of all functional products.
The centre in Kilkenny, supported by Ireland's business development agency Enterprise Ireland, will work closely with Irish and international universities, employing around 30 highly skilled graduates.
Minister Walsh said: "The scale of this investment is a first for the Irish food industry. The Irish food industry in general needs greater investment in research and product development if it is to move rapidly towards higher value added products and to respond effectively to market requirements."
He added that this was also one of the key recommendations in a recent report on the strategic development of the Irish dairy sector.
Glanbia's managing director John Moloney has frequently cited his interest in developing the nutritional side of the company and suggested last year that the firm was ready to expand its operations.
A better financial position and the sale of non-dairy activities in the UK last year could allow it to build on its core business areas through acquisitions.
Glanbia's investment in the new centre will take place over the next five years.