The new plant will be a 2,700 square metre facility for granulation and compression for the company's over-the-counter (OTC) medicines, such as the firm's leading OTC analgesic, Panadol (paracetamol/acetominophen).
No one from GSK was available to comment on the new investment, but media reports state that the company believes the move highlights the strategic importance of the Dungarvan site to the global supply of the firm's OTC products.
Aside from Panadol, 6 billion tablets of which are produced by the company's factories annually, the company's other OTC products include a range of smoking control products, gastro-intestinal and dermatological products. In 2004, GSK also obtained the marketing rights to orlistat in the US, a prescription product for obesity management approved by the US Food and Drug Administration and currently marketed by Roche as Xenical.
In 2005 OTC medicines generated sales of around £1.4m for the company, almost 50 per cent of the total sales from the firm's consumer healthcare division.
GSK has manufacturing facilities at two sites in Ireland, one in County Cork in addition to the Dungarvan site.
Towards the end of last year, GSK announced a record-breaking licensing deal with biotech firm Genmab for their monoclonal antibody leukaemia treatment. The deal was worth $2.1bn (€1.6bn), winning the title as the world's biggest licensing agreement and reaffirming GSK's position as the world's third largest pharmaceutical firm.
More recently, the firm also announced its intended acquisition of Praecis Pharmaceuticals, a biopharmaceutical company dedicated to the discovery and development of novel compounds.