The announcement follows news late last year that the company was planning to expand after being refused planning permissions to relocate its existing site at Thrapston, Northamptonshire to meet demand.
Scotts has already set up design and management offices in Shirley while it decides on where to establish the new factory.
Richard Evans, who is heading up the new company, told TTJ that two or three potential sites were being looked at to the south of Birmingham. Scotts needs a 20,000ft2 factory on a 2.5-acre site.
Business currently being won in the West Midlands will be produced initially at the existing Thrapston site.
Around 20 jobs will be created by the expansion and machinery for the new site has already ben purchased.
"This extension of the Scotts business will enable us to effectively extend Scotts’ reach along the M40, M42 and M5 corridors," said chairman David Scott.
"We feel confident that the housebuilding market will turn a corner in the not too distant future and we wish to be prepared to make the most of that when it happens."
Scotts said its truss and joist business had achieved five years of growth, with 2011 representing its best year ever.
