An additional $150m investment is planned over the next 10 years at the site in King Abdullah Economic City, Saudi Arabia within the Gulf Cooperation Council (GCC)
The factory will be built to LEED standards and will produce Galaxy and Galaxy Jewels when operational in 2014.
Though Mars has had a presence in the country for around 30 years, the new factory will mark the first time Mars has had production capabilities on the ground.
Christine Greaves, corporate affairs manager at Mars GCC, told ConfectioneryNews.com: “Our plans, including the opening of a new plant in Saudi Arabia, represent what we think is the best way forward and the necessary investment to increase our capacity.“
Asked why Galaxy was chosen, she said: “Seven out of the top ten brands in the GCC are Mars brands. As Galaxy is our leading brand it makes business sense to produce it locally in our biggest market in the GCC.”
The factory will initially serve the Saudi Arabian market, but could eventually give the company inroads into new markets.
The site will initially employ a 60-man project team with a further 300-400 employees expected once the factory is fully operational.
The Saudi population is growing at 2.5% per year and is expected to reach 29 million by 2015, according to the US market research institute Business Monitor International (BMI).
It is also a young population with around 70% of inhabitant under 30 years old.
Food, Hotel & Hospitality Arabia (FHHA) forecasts the domestic confectionery sector to grow by 49.4% by 2016.
Mars GCC also has a production capacity in the UAE.
In 2010, it opened a $40m factory in Dubai to complement its other site in the emirate built in 1998.