The cost of the expansion is in excess of $10 million and will create an estimated 20 jobs during the nine-month construction phase.

The new mill will help to maintain the factory's existing 225 employees and could increase employment at the site by eight additional employees.

The Manildra group owns and operates three other flour mills in NSW at Manildra, Gunnedah and Narrandera.

The mill located at the town of Manildra ranks among the 10 largest mills in the world.

The Shoalhaven Starches factory on Bolong Road produces a range of products for the food, beverage, confectionary and paper producing industries, including starch, glucose and ethanol.

Currently the Shoalhaven plant receives industrial grade flour, produced at the Manildra mill, by train for use as a raw material in the production of gluten and starch.

In addition to the flour, husk material is also transported to Bomaderry for use in the mill's dryers, forming part of the ethanol production process.

By constructing a mill on site, Manildra will have no need to transport flour or husk material, instead transporting the equivalent amount of wheat to Bomaderry instead.

The preliminary assessment report was prepared by local consultants Cowman and Stoddart.

The report says the benefit to the Manildra company in relocating part of the industrial grade flour production to Bomaderry is that the subsequent spare capacity at the Manildra mill could be devoted to the production of higher grade flour, therefore increasing export opportunities for the company.

"Overall it is anticipated that the proposed flour mill at the Bomaderry site will process approximately 890 tonnes of wheat per day, producing 715 tonnes of industrial flour per day," the report states.

"Overall it is anticipated that the flour mill will produce approximately 265,000 tonnes of industrial grade flour per annum for use in the Bomaderry plant."

The proposed flour mill will be housed within a new building to be built within the existing factory site.

The new building will comprise a plan area of around 240 square metres and have a height of 25 metres.

Two additional silos with a total capacity of 4000 tonnes will be sited adjacent to the building.

As for residents' concerns regarding odours emanating from the factory, the Cowman and Stoddart report says odour management will need to be monitored.

"As this proposal does not intend to increase wastewaters from the factory site it is not expected that the proposal will have a significant impact on the generation of odours from the site," the report states.

"Given the history of the site however, odour emissions are a potential environmental risk. Odour management is therefore likely to be an issue that will need to be addressed."

An odour audit is currently being conducted for the Shoalhaven Starches plant to identify odour sources and the proposed mill will also be included in this audit.

The proposed mill will be considered under Part 3A of the Environmental Planning and Assessment Act, which hands planning to the NSW Planning Minister Frank Sartor.