China Kweichow Moutai Distillery Co, the country's leading liquor maker, will invest of 20 billion yuan ($2.9 billion) to nearly double annual output within five to 10 years, a Guizhou local official said Monday.

Yang Fangming, deputy director of the publicity department of Communist Party committee of Renhuai city, southwest China's Guizhou province, said the annual output will be raised to 40,000 tons from 23,000 tons in 2008.

Kweichow Moutai, crowned as "China's national liquor", has long been unable to meet market demand, Yang said.

The company has made an initial investment of more than 3 billion yuan in May on facility expansion and environment protection of Chishui River, the water source of Kweichow Moutai.

Environment protection measures include relocation of 10,000 local residents, closures of 400 liquor workshops and restraints on development of high-polluting coal and cement industries.

Both the local government and the company will fund the relocation of local residents, Yang told reporters.

A worsening environment could pose a severe threat to the sustainable development of Kweichow Moutai, he said.

The company recorded sales revenue of 10.3 billion yuan ($1.5 billion) last year, achieving a double-digit annual growth rate despite the global financial crisis.