Skellerup has entered into an agreement with Ngai Tahu Property to purchase three hectares of land for $6.6 million to house its dairy manufacturing operations.
Skellerup says the deal provides certainty to its 200 staff who work at the company's Woolston facility.
The company purchased a new state of the art rubber mixing plant last year in preparation for new premises, and it has allocated capital for the manufacturing of additional moulding machines to make sure the business can relocate without interruptions to supply.
The purchase of the land and construction of the new facility will be funded out of insurance proceeds, existing reserves and unused banking lines.
Skellerup expects the new facility to be completed by late 2014.