The tool company Hoffmann is investing around 200 million euros (223 million dollars) in a new logistics centre in the German city of Nuremberg.
The corporation will build its new global central warehouse and a technology centre on a site of 21.5 hectares in the neighbourhood of Langwasser. The so-called "LogisticCity," located near the Nuremberg Exhibition Centre, is due to open in 2021.
Up to 900 new jobs are to be created, the company said.
At the groundbreaking ceremony on Wednesday, state premier Markus Söder called the investment a "great commitment to Bavaria and Nuremberg as a location."
The family-run firm is an example of small and medium-sized businesses being the foundation of the Bavarian economy, he added.
The highly automated logistics centre is expected to triple the capacity to up to 40,000 packages per day, said executive board member Alexander Eckert.
Nicola Bleicher, a shareholder and the great-granddaughter of company founder Josef Hoffmann, said that the LogisticCity is the biggest project in the 100-year history of the firm.
Last year, the Hoffmann Group - which is headquartered in Munich and has 3,700 employees worldwide - achieved 1.4 billion euros in turnover. Its portfolio includes tools, industrial safety products, factory equipment and workshop supplies.
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