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UPDATE 1-ArcelorMittal plans $1 bln Mexico investment by 2020 -chairman

(Adds quote, details on investment, company background)

MEXICO CITY, Sept 28 (Reuters) - The world's largest steelmaker, ArcelorMittal, will invest $1 billion in Mexico over the next three years to modernize its plant at a key Mexican port, Chairman and CEO Lakshmi Mittal said on Thursday.

"I am delighted to announce a $1 billion investment in Mexico over the next three years so we can meet Mexican demand for steel products, which is growing rapidly and is served heavily by imports," Mittal said at an event in southern Chiapas state attended by President Enrique Pena Nieto.

The Indian steel magnate said that "starting immediately" ArcelorMittal will modernize assets at the Pacific coast port of Lazaro Cardenas, one of Mexico's busiest commercial hubs, as well as what he described as "downstream operations" aimed at meeting Mexican consumer demand.

ArcelorMittal operates six facilities at three ports in Mexico, with a capacity of more than 6.5 million tonnes of production capacity.

In 2007, ArcelorMittal bought a $1.4 billion steel plant at Lazaro Cardenas, alongside another plant it already owned at the port. (Reporting by Ana Isabel Martinez and Frank Jack Daniel; Editing by Diane Craft and Phil Berlowitz)