The extra investment is needed to keep pace with a boom in demand from emerging markets, which has helped JCB to restore most of the 1,800 jobs shed during the severe construction recession.

The Staffordshire manufacturer celebrated its 65th birthday unveiling a big jump in profits last year to £235m compared to £94.5m previously. Sales were also up 50% to top the £2bn mark once again.

JCB sold 51,600 machines last year compared to 36,000 the year before as construction activity in the BRIC nations of Brazil, Russia, India and China clicked into gear again.

The firm said it had now restored most of the 1800 jobs that were lost during the recession

JCB chairman Sir Anthony Bamford said: “We started 2010 cautiously optimistic about trading prospects and I’m delighted that our optimism was rewarded with a very strong result for the year.

“The pace and strength of the recovery varied by market.

“Growth was strongest in the BRIC countries and other developing economies, but some established markets, notably the UK and Germany, also performed satisfactorily.”

He added: “2011 has also started well for the JCB Group but we are still mindful of economic concerns which could hold back the recovery.

“We continue to invest in our manufacturing facilities, notably this year in India and Brazil and, of course, in new products, with 13 new machines launched so far in 2011.”

JCB is investing in a big 350,000 sq ft new factory in Sao Paulo, Brazil, for the manufacture of backhoe loaders and tracked excavators.

The plant will become operational in early 2012.