Swooping down on the rep carrion left by inveterate commenters FumbleFingers and John Lawler, I submit the following:
Yes. Both forms are grammatical.
As stated in the comments, nouns (e.g., the production) will carry a style that is more formal. Some will think it sounds fancier, more educated, more elegant, traditional, while others will find it pretentious, pompous, outdated, overwrought, and gratuitously harder to read.
Using the -ing forms (gerunds or verbal nouns, e.g., producing,) will convey a less formal tone, though not particularly informal. Readers often find this choice to be more clear, direct, lively, and simpler to read.
The best choice then, depends on a number of factors in a particular situation. What kind of genre or type of text or discourse, who your target listener or reader is, and many other contextual factors. Some who like the formal feeling in one context won't like it in another.
As John Feminella mentions in his answer, all of these choices involve subjects that are relatively long. Sometimes, long subjects can contribute to or create a style that is relatively more difficult to read than sentences with short subjects, like *The factory makes xxx + [optional additional information]. However, once we start discussing that issue, we need to consider excluding information and what it means to position information in different places along a sentence, how all these factors interact with each other, with other sentences, and, again, many other factors.