Ireland-based C&C said it would extend its cider production facility at Clonmel and anticipated the majority of the increased capacity to be achieved by spring 2007.
The move follows a surge in demand for the firm's Magners cider brand, which was launched across the UK earlier this year.
Brendan McGuinness, managing director of C&C's cider division, said: "This is the group's largest ever capital investment programme and is designed to resolve our current supply difficulties and provide an ample level of spare capacity going forward."
C&C's cider sales were expected to have grown 75 per cent for the six months ended August 31, it said in a recent trading statement. The group said Magners, spurred on by a spate of hot weather across the UK in June and July, had increased volumes by around 250 per cent.
The performance helped C&C to increase sales by more than 25 per cent during the half year.
It warned, however, capacity constraints on cider meant it was struggling to meet demand, particularly in the UK's growing take-home market; something which may stall growth in the second half.