UPDATE 1-Mexico's Grupo Modelo, Millfoods to partner on new corn plant

(Adds details from statement in paragraphs 2-5)

MEXICO CITY, Aug 17 (Reuters) - Mexican beer maker Grupo Modelo and Millfoods will invest $300 million to build a corn processing facility in central Guanajuato state for beer production, Mexico's economy ministry announced in a statement on Thursday.

The plant is expected to generate more than 1,000 jobs, and once construction of the plant is finished next year, the project will benefit some 20,000 corn farmers in central Mexico, according to the ministry.

Modelo, part of Belgium-based Anheuser-Busch Inbev's global beer business, stressed it will support local corn production over imports, the statement added, which is also a top government priority.

The ministry also touted the plant's technology that should allow it to use less water.

Millfoods will be an investor in the project and operator of the plant, which will be located in the city of Salamanca, the statement added.

Beer is a major export for Mexico, which has traditionally relied on imported grains over local production to make the popular alcoholic beverage. (Reporting by Kylie Madry; Writing by Brendan O'Boyle; Editing by David Alire Garcia)