Greggs, the UK's largest high-street bakery company, is to invest £13m in a new production plant to meet demand for sausage rolls and pasties.
Greggs offers customers a range of freshly-baked products
The new 'savoury facility' will be built this year at Greggs' Balliol Park site in Longbenton, north-east England. Production will start in 2006.
Greggs said the new development will create 50 jobs.
The company has set itself ambitious growth targets and wants to more than double its sales to £1bn by 2010.
Nigel Oldham, director of production at Greggs, said that the company is looking to buy more stores, increasing outlets to 1,700 over the next five years from about 1,200 at present.
Newcastle-based Greggs also has four shops in Belgium, as well as 216 Bakers Oven stores in the UK.
Mr Oldham said that Greggs wanted to exploit its presence on the High Street to gain an advantage over competitors.
Greggs was founded on Tyneside in the 1930's by John Gregg, father of the present company chairman.