CHOCOLATE manufacturer, Nestlé, is to invest millions in its North Yorkshire operation, despite predicting a tough year ahead.

The company could further boost York’s economy if council planners approve a massive redevelopment of the empty southern end of the factory site.

Nestlé said the announcement of its 2011 plans demonstrates its longterm commitment to the city and the 2,000 people it employs.

David Rennie, managing director of Nestlé Confectionery UK, said he believed the first half of this year would be the toughest yet for private businesses with job losses in the public sector, looming tax hikes and cocoa prices at an all-time high of £2,000 a tonne.

“People will have less money in their wallets to spend and it’s going to be hard for business,” he said. “If you don’t invest in quality products, marketing and advertising, in three or four years’ time you won’t be able to compete.”

Despite this, the company is planning to invest £1m in extending its Insight Centre, a supermarket-type filling station and convenience store, where confectionery products are displayed on shelving to help boost sales to retailers. In future, Insight Centre will stock the full range of Nestlé goods, including coffee, water, cereal and pet food.

There are also plans to expand its Product Technology Centre, where 120 scientists and technicians work to improve Nestlé products and equipment from around the world.

The company will also launch a new version of the dark chocolate KitKat using 70 per cent cocoa solids.

It will continue with a £15m investment in new and refurbished wafer ovens for the bar, which is its leading chocolate brand the world over.

The bar was first manufactured at the York factory when it was Rowntrees.

It celebrated its 75th anniversary at the end of last year.

Elsewhere in the city, a developer has been granted permission to go ahead with its £165m redevelopment plan of the old Terry’s chocolate factory after it reached an agreement with City of York Council.

Hundreds of homes, two hotels, shops, bars and restaurants will be built on the site, off Bishopthorpe Road, generating an estimated 2,700 jobs.