DES MOINES, Iowa (AP) — Alcoa Inc. will invest $300 million to expand and add 150 jobs to its Davenport plant to meet the growing demand for demand from the automotive industry as automakers work to meet federal guidelines for increasing gas mileage and lowering emissions, company officials announced Thursday.

Alcoa officials were joined by Gov. Terry Branstad and other state leaders in making the announcement from Branstad's office in Des Moines. It followed a decision earlier in the day by the Iowa Department of Economic Development board to award $3 million in incentives to the Pittsburgh aluminum manufacture for the project.

Alcoa Vice President and General Manager John Fox said demand for aluminum products produced by Alcoa is growing with the new automotive guidelines.

"It allows for a smaller power train, better mileage and less CO2 output," Fox said. "It means our business is growing quite well."

Fox said the company approached the governor about expanding in Davenport.

"We saw Davenport as being the best locations because of its workforce and a very progressive support from the government side," he said. "We hope this is just the first phase of what can be a very dynamic growth period for us in the automotive area.

"All the major manufacturers continue to express interest in moving to aluminum, with that movement that means we can bring more people to work," Fox said.

The expansion will also help retain 200 jobs Fox said would otherwise have been lost.

He said with the automakers required to increase mileage by 2016, the company needed to move forward with the project immediately.

He said equipment has been ordered and the expansion of the plant is expected to be completed by the end of 2013.

The plant currently employs nearly 2,200 employees, and Fox said the experience of that workforce was a key factor in the decision to expand in Davenport.

"It gives us the opportunity to do some work we're very used to doing so our chances for success grows even more with the experience of this work force," Fox said.

Construction will begin as soon as the air quality permits are approved by the Iowa Department of Natural Resources. Branstad said he's working with the DNR to get permits approved as quickly as possible.

"Remember what this is all about is actually going to be reducing pollution because by making these lighter weight vehicles that emit less and get better mileage we're really helping the environment so this is something I think is very positive and the DNR will see the benefit as well," Branstad said.