One of the main requirements for functional food ingredients is that they do not have an unintended impact on the sensory properties of the finished product.
Previously, Cognis was producing Vegapure plant sterols that still had an odour.
Its customers would then have to process the ingredient further, to remove or mask the smell.
Now, the new facilities will provide the company with the technology to manufacture odourless ingredients.
The company invested €10m into the plant, which is officially opened in Illertissen today.
Its aim is to simplify the production process of functional foods and supplements for food manufacturers.
"Thanks to our new refining facility, using our plant sterol esters now means virtually no extra work for them," said vice president of nutrition and health Dr Gerhard Lobmaier.
"Cognis' refined plant sterol esters can be incorporated directly into spreads, beverages, breads, or other functional foods."
No one was available for comment on how this new production facility will affect the cost and speed of sterol ester production, nor what the financial aims of the company are with the expansion.
Nor could anyone provide further details on the technical development that has enabled the new odourless sterol esters.
However, CEO Dr Antonio Trius said in a statement: "During the last few years, around €35m have been invested in the functional foods business in Illertissen.
Natural foods that come with additional health benefits are at the heart of Cognis' corporate strategy.
These markets are central to our future, and we will continue to invest in state-of-the-art facilities to maintain our leading position."
Plant sterols and sterol esters are used have been shown to lower the level of harmful low-density lipoprotein cholesterol, thereby actively reducing the risk of heart disease.
The ingredient is suitable for a variety of applications, including spreads, yoghurts, rye bread, milk drinks and other beverages.
There is a growing trend for functional foods as consumers place more importance on health and well-being.
For example, the functional dairy drink market hit €3,400m this year, with consumption reaching 999m litres - an increase of 12 per cent from a 2005 point of 892m litres.
Cognis supplies speciality chemicals and nutritional ingredients to 30 countries worldwide, with a particular focus on areas of wellness and sustainability.
The international Nutrition and Health Competence Center in Illertissen is the company's global manufacturing site for emulsifiers, stabilisers, plant sterol esters, and conjugated linoleic acid.