The company has been in the French market for 60 years and last year posted €1.24bn ($1.3bn) in revenues for its French business.
The Villers-Ecalles plant was established in 1960 as the company’s first ever Nutella factory. It is the group’s only factory in the French market.
Ferrero has 22 factories worldwide including the French plant, according to its latest CSR report.
The company has 1,346 employees in France, which accounts for roughly 4% of the group’s s global workforce.
It says it has already invested around €55m ($59m) in its French business in the last five years.
‘Modernizing our industrial equipment’
Now the group will invest €38.5m ($42m) to construct a new 6,500 m² storage facility and to upgrade equipment in its Villers-Ecalles factory.
Michel Etcheberrigaray, general manager of the Ferrero France plant in Villers-Ecalles said: "This major investment…is excellent news for the development of our business and the local anchoring in Normandy, to which Ferrero France is very attached.
“We are modernizing our industrial equipment to adapt to the challenges of tomorrow.” [French translation]
The French market
Ferrero led the French chocolate confectionery market with a 23% value share in 2016, according to Euromonitor International.
The market research firm is forecasting a 1% compound annual growth rate (CAGR) in retail value sales for the market over the next five years.
Although the domestic chocolate market is mature, French consumers are prepared to pay more for added value products, it says.