The new facility at Cognis' international Nutrition & Health Competence Center in Illertissen is the greatest single investment Cognis has made since it was founded in 1999, it said.
Cognis is the world's largest supplier of plant sterols and held almost 50 per cent of the $75 million European market in 2003, according to Frost & Sullivan.
However new US suppliers have entered the European market in the last year, looking to tap into the growing demand resulting from the recent regulatory approval for additional food types that can contain the cholesterol-lowering ingredient.
"The market has become much more competitive in the last year," noted Kathy Brownlie, analyst at Frost & Sullivan.
For example, US soya processing giant ADM has developed a range of sterol esters with good formulation properties for low-fat or fat-free foods. The firm has also added new supply of IP-certified non-GM plant sterols this month.
Other North American firms like Forbes MediTech, and new player on the scene Arboris, are spotting good potential in the GM-wary European market with their wood-derived sterols.
Cognis said the new facility would also strengthen its position in the market for non-GM plant sterol esters, although it did not reveal how much extra capacity for this product would be added.
Paul Allen, group vice president of the company's Nutrition & Health unit, called the new, state-of-the-art facility "a powerful symbol of our commitment to serving the global wellness trend".
While the group has taken a hit to its natural vitamin E sales recently, sterols and CLA are driving good growth and helped the Nutrition & Health unit increase 2004 sales by 8.9 per cent to €287 million, making it one of the group's best performing units.
European number two sterol supplier Raisio also reported strong growth in 2004, with sales of its Benecol sterol esters rising 66 per cent - well ahead of targets - and new food applications allowing it to increase its market share.
Cognis has previously made its Vegapure brand of plant sterol esters at Kankakee in the USA and in Boussens, France.
The new Germany facility will also manufacture Tonalin CLA, seeing strong interest in the weight loss market, for global supply.