Lego Building $1B Factory to Meet Asian Demand

Danish toy maker Lego is building a $1 billion factory in Vietnam as demand for the toy bricks across Asia continues to grow, according to a report on Wednesday (Dec. 8) in The Wall Street Journal.

The new factory will make products for customers in India, Indonesia and the Philippines, while the company’s existing factory in China will cater to customers in that nation. The company prefers to make its products close to where it sells them to cut down on lead time, a key strategy during the ongoing global supply chain snafu, Chief Operating Officer Carsten Rasmussen told WSJ. “We don’t have a lot of what I call ‘part tourism,’ where we have to fly parts around,” he said.

Construction on Lego’s Vietnamese plant, 30 miles from Ho Chi Minh City, is scheduled to start in 2022 and is expected to be completed by 2024. It will be the company’s sixth factory, joining locations in Denmark, Mexico, Hungary, the Czech Republic and China. Lego is also planning to expand its Mexico and Hungary factories and add new equipment and technology to all of its factories.

Most of the factories can mold, decorate and package parts. The Vietnam factory, slated to be Lego’s first carbon-neutral facility with rooftop solar panels, will start with molding and packaging and will add decorating capabilities in the future.

Lego has seen double-digit growth in Asia since 2019 and has opened dozens of new stores across China in recent years. The toy market, excluding video games in the Asia-Pacific region, is forecast to grow about 28% in value through 2025 compared to 24% across the world, according to Euromonitor.

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