The St Merryn Foods meat processing plant in Merthyr Tydfil is to receive £1.2m support from the Welsh Assembly Government.
The money will be used to improve efficiency at the plant, which employs 977 people, slaughtering and processing beef and lamb into pre-packed products for supermarkets, particularly Tesco, which provides 90% of the site’s revenue.
Improvements include new production line equipment, a product sorting and packing room plus a revised plant layout.
The announcement comes as a new report warns that all but three of Wales’ abattoirs could close if their subsidies are phased out as planned.
“Welsh red meat abattoirs and processing plants play an important role in delivering a profitable and sustainable Welsh red meat industry and this grant will play an important role in achieving that,” minister for rural affairs Elin Jones said.
“The Welsh Assembly Government seeks to support food producers, food processing and agri-food businesses in Wales. Our aim is also to increase income and employment as well as support the agricultural industry adapt to future demands.”