Norman Emerson and Sons will introduce the jobs over the next three years at its premises in Derryadd.
The Industrial Development Board is giving £249,000 towards the cost of the investment.
IDB deputy chief executive Lawson McDonald said the expansion was an "encouraging development for the industrial base in mid-Ulster".
He said it would "offer additional employment opportunities in an area of social need".
"The project is a very good example of a small family company making a strategic decision to bring in new ideas to develop the business," he added.
Currently employing 69 people, the family-run company was established in 1945 to provide sand to the construction industry.
Industry growth
The firm's activities at Derryadd include sand dredging and processing, soil screening, readymix concrete and contract concrete laying services.
The firm's managing director George Emerson said the growth in DIY due to home and garden makeover programmes had helped influence their decision to expand.
He said the company had identified a number of new business opportunities as a result of the growth of the construction industries in Great Britain and the Irish Republic.
"Our target is to increase turnover by 40% by 2002 through the introduction of bagged products - sand and aggregates - which will account for 63% of the total growth in turnover," he added.
The company has five other sites - Ardmore, near Derradd, Tullyhogue, Magheraglas, Lisbane near Tandragee and a new business at Kinnego near Lurgan which supplies decorative natural stone for landscaping.