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Kweichow Moutai Co Ltd, China's most well-known premium liquor manufacturer, plans to invest 845 million yuan (US$108 million) to expand production capacity by 2,000 tons, it said yesterday.

The company expects to reap more than 300 million yuan of net income annually through this expansion. The company said in a statement to the Shanghai Stock Exchange that construction of the 158,288 square meter project would start from February 2007 with completion in December.

The liquor firm, which did not reveal its current output, expects the expansion to boost sales revenue to more than one billion yuan annually. An analyst says Kweichow Moutai sees market demand now exceeds supply for its liquor even though its price is more expensive.

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