Kraft Foods to invest in UK chocolate production

American snack food company Kraft Foods, which acquired British confectionery giant Cadbury in January 2010, plans to invest £50m ($78m) in boosting biscuit and chocolate production in the UK, as it plans to cut 200 jobs.

Out of the total investment, spread out over two years, the company will invest £6m ($9.37m) in the Sheffield confectionery plant, £13.5m ($21.08m) in the Bournville facility, £3.4m ($5.31m) in the Chirk site, and £2.6m ($4.06m) in the Marlbrook plant.

The investment in Sheffield, which already makes brands such as Trebor and Maynards, will see the production of Oreo and BelVita biscuits for the first time in the UK, creating 20 jobs.

The remaining investments will be spent on a range of projects that include upgrading infrastructure, accelerating production, reducing waste and boosting energy-efficiency.

Kraft manufacturing director of UK chocolate Neil Chapman said that the company’s ambition is to put Bournville, Chirk and Marlbrook at the centre of British food manufacturing and the Kraft Foods network.

"We continue to invest in our people and facilities, so we can increase productivity and transform our business," Chapman added.

Meanwhile, the company has also announced that it will cut 200 jobs at its sites in Bournville, Chirk and Marlbrook over two years from March 2012.

Following the acquisition of Cadbury, Kraft made a commitment to employees and the government that there would not be any further plant closures and compulsory redundancies for two years, and that agreement ends in March next year.

Kraft Foods is in the process of splitting into two publicly traded companies, one focused on the snacks business and the other on its North American grocery business, which is expected to be completed at the end of 2012.

For the third quarter that ended 30 September 2011, the company’s profit increased 22.3% to $922m, compared with $754m during the same period last year, driven by higher pricing on products.

Caption: Kraft Foods is set to axe 200 jobs at its sites in Bournville, Chirk and Marlbrook over two years from March 2012. (Courtsey: Cadbury)