UPDATE 2-DuPont to increase Kevlar capacity over 25 percent

(Adds details on expansion, share price move)

By Euan Rocha

NEW YORK, Sept 19 (Reuters) - DuPont Co (DD.N) said on Wednesday it planned to invest $500 million to increase the manufacturing capacity for its bullet-proof Kevlar material by more than 25 percent in the next three years.

Shares of DuPont, the largest U.S. chemical maker by market capitalization, rose 1.8 percent to $50.19 in early trade on the New York Stock Exchange.

"Global demand for DuPont Kevlar has soared with the growing need for safety and security worldwide," Thomas Powell, head of DuPont Advanced Fiber Systems, said in a statement.

In an interview with Reuters, Powell said the expansion would also help cater to growing demand from developing economies and the aerospace industry.

Kevlar, a synthetic fiber created by DuPont in 1965, has gained fame for its use in bullet-proof vests and other types of body armor.

Kevlar is five times as strong as steel and much lighter. This makes it useful in aircraft and aerospace components, and in turn it helps reduce energy consumption, said Powell.

Kevlar is also used in a wide variety of high-performance applications, including automotive brakes, tires and sports equipment.

The announcement represents the largest Kevlar expansion since the product was introduced in 1965, DuPont said.

The company between 2000 and 2006 completed a series of small manufacturing expansions at its Richmond, Virginia, and Maydown, Northern Ireland, facilities. The expansions at the time increased Kevlar production by about 15 percent.

DuPont said the first phase of the new expansion will be at its Virginia facility, while the remaining expansions may be at existing facilities or new sites. Besides Virginia and Northern Ireland, the company also makes Kevlar in Japan.

Last year, DuPont announced it expected to invest more than $100 million in a three-phase capacity expansion that would raise Nomex fiber and paper capability by about 10 percent.

Nomex is a flame-resistant material used by firefighters, race car drivers and pilots.

Kevlar and Nomex are manufactured by DuPont's Advanced Fiber Systems unit, which is a part of DuPont's Safety and Protection segment.

The segment contributed $5.6 billion or about 20 percent of DuPont's revenue in 2006, and the Advanced Fibers unit made up about a quarter of the segment's revenue. (Reporting by Euan Rocha)