The project at Waltanna Farms in Hamilton is expected to generate another 532 jobs for the region across general business, agriculture and retail industries in the next five years.

Wannon MP Dan Tehan announced the funding which was part of a $2.5 billion injection from the government into upscaling manufacturing in Australia.

Mr Tehan said it was a "big win" for not only the Southern Grampians economy, but also the entire Australian supply chain.

"Waltanna is a tremendous local success story and will use its $2.4 million grant to continue to grow its manufacturing capability here in Wannon," he said.

He said the funding included Energy Efficient Communities grants to facilitate Waltanna's partnership with food innovation marketing and sales business TUI Foods.

"Waltanna received $25,000 to invest into a BioFuel Recovery project and TUI Foods received $25,000 for a heat recovery system for a grain drier, bringing the total investment into local manufacturing at Waltanna to $2.45 million," he said.

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Waltanna Farmers director Michael Nagorcka said it was "quite overwhelming and humbling" to receive the funding to expand his food production which will include dehydrated food, plant-based beverages and Australia's first oat-flax syrup.

"It allows the greater production of value-added export product to be realised much earlier and more efficiently," he said. "We are now in a position to supply local Western District food products in much greater quantity to existing global markets."

Mr Nagorcka said with the investment, his business would be able to take advantage of the government's recent trade agreements with India and the UK.

"The flow on effect of all this is increased exposure for local agricultural produce in the global market," he said.

"More importantly, it creates increased employment opportunities here at Waltanna Farms and the specialised contract services that we will require.

"That also provides a huge economic boost to the regional economy."

TUI Foods chief executive officer Tony Cartwright said he was grateful for the manufacturing grant.

"This funding enables us to move from a start-up mode to a full-production mode," he said. "What we're looking to do is create a world-class farmgate, processing facility and innovation hub here in Hamilton."

Mr Cartwright said there was an increasing demand for Australian products and brands overseas which he would look to capitalise on.

"In China, Australia is the number one trusted country of origin supply products and ingredients. If you look in terms of the US, Australia sits at number two," he said.

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