Mexico City, May 20 (IANS/EFE): Mexican President Enrique Peña Nieto inaugurated a 1.6-billion-peso ($130-million) expansion of a Nestle instant coffee factory in the central city of Toluca.

The project has boosted the plant's productive capacity by 30 percent, making it the world's biggest facility of its kind, Nestle Mexico CEO Marcelo Melchior said during Friday's ceremony.

The factory, which covers a 14-hectare area, will supply the Mexican, US, Central American, Caribbean, Middle Eastern and Japanese markets, the Swiss food giant said in a statement.

As part of the remodeling, a biomass boiler was installed to process spent coffee grounds from the production process for use as fuel, thereby covering 60 percent of the plant's electricity needs.

The new system will enable a 37,000-tonne reduction in CO2 emissions, equivalent to taking more than 11,800 cars off the roads for a year, the company said.

Peña Nieto not only hailed the investment outlay but also the multinational's increased productivity, noting that by "boosting its workforce by just 10 percent", it will expand its production capacity by 30 percent thanks to the use of new techniques.

The reason why Mexico "can't grow more" is that its productivity has fallen over the past 30 to 40 years, according to the president, who stressed the need for structural changes to bolster the domestic market and reduce dependence on global economic conditions.

Mexico is one of the world's leading coffee-producing countries and the largest producer of organic coffee, according to figures from the sector, which is facing a crisis stemming from the spread of a fungus from Central America.