Global Equipment Spares (GES) is spending £1.9m to upgrade its facility and purchase new machinery.
The firm, which is based at the city's Campsie Industrial Estate, hopes to more than double its workforce during the next three years.
GES makes high strength steels for the global mining, construction and agricultural industry.
The move would help GES grow their exports "particularly into North America", said Invest NI, which is offering £396,000 in grants.
John McClenaghan, Managing Director of GES, said: "This expansion is part of a strategy to grow sales and increase both our workforce and our product offering to meet identified opportunities within new and existing markets.
"We have set ourselves a challenging target for new export business and will be focused on leveraging our reputation in the industry to secure new customers," Mr McClenaghan said.
"Invest NI's support is allowing us to fully implement our growth plans and create valuable employment opportunities across a range of disciplines in the North West."
GES customers include major materials handling businesses Terex, Telestack, Sandvik and McCloskey International.
The new jobs will range from manufacturing roles to procurement and sales positions.
A Londonderry manufacturing company is to create 61 new jobs as part of a major new investment.