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Alliance Group's new $1million value-add facility at its Lorneville plant in Southland is expected to be up and running by October.
In a statement, the co-operative said it would significantly expand the scope of existing production by increasing the processing capacity of fresh and tempered lamb.
New lines for automatic slicing, dicing and mincing of products would be installed alongside a range of modern packaging technologies.
A key part of Alliance's business strategy was capturing greater market value for its products, chief executive David Surveyor said.
The co-operative would initially target the New Zealand domestic market, the UK food service sector and China for the value-add products.
It was experiencing "considerable'' growth in those sectors and saw significant opportunities in the future, Mr Surveyor said.
Alliance had spent almost a year planning in detail every product and its specification, the machines and technology requirements and plant layout to ensure the facility was effective from the start of production.
Last month, Alliance representatives attended IFFA - an international meat industry trade fair - in Frankfurt, to see the latest in value-add machinery.
Alliance was the largest employer in Southland with almost 2000 people at Lorneville alone. The new facility would provide employment opportunities for 40 people.
A range of other projects were "in the pipeline''.