Japan's Canon plans to build a new digital camera manufacturing factory in Japan to keep up with demand from an expanding global market, it said Monday.

The new plant will be built in Nagasaki in western Japan and will be able to produce around 4 million cameras per year. Construction is scheduled to start in January next year and be complete by November with operations beginning in December 2009. It will manufacture both digital SLR (single lens reflex) and compact cameras.

Over the next two and a half years Canon will invest YEN 17.4 billion (AUD$168 million) in construction and operations at the plant, which will employ about 1,000 people when complete.

Canon was the world's number one digital still camera maker in 2006 and 2007, according to a report from IDC. The company shipped 24.5 million cameras in 2007 to give it a 19 percent share of the global market, IDC said in a report published in April. It's nearest competitor, Sony, shipped an estimated 20.9 million cameras.

Canon enjoyed an even greater share of the booming digital SLR market at 42.7 percent in 2007, said IDC. The company's shipments of 3.2 million digital SLR cameras ranked it just ahead of Nikon, which shipped 3 million, the market research company said.