Harvest Moon has received a $1 million construction grant from the state government.
The company is one of 20 second-round recipients of the Building Project Support Program, valued at $20 million.
The grant will fund part of a $4.8 million expansion at Harvest Moon, which will see the construction of an onion storage facility and cool storage building.
Harvest Moon executive director Neil Armstrong said his company had wanted to expand for the last couple of years.
"We've got a new product on the shelves that people have probably seen on the shelves - a little snackable carrot that's been growing at a pretty rapid rate," Mr Armstrong said.
"We need room for expansion of our production and packing facilities."
State Growth Minister Roger Jaensch hoped the program would boost the economy.
"We set up the Building Project Support Program as part of our response to COVID," he said.
"Specifically, it is to ensure that we keep our economy strong and that we help our economy to be set up to recover well from the pandemic."
Mr Jaensch also hoped the project would allow businesses to thrive, in spite of the pandemic.
"We were concerned that Tasmanian businesses might leave their money in the bank, might not borrow money and might put on hold their plans to expand their business," he said.
"We invented the Building Project Support Program to de-risk investment in commercial construction activity and to grow business in Tasmania."
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