Lego to build $1-bln toy plant in Vietnam
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Danish toy company Lego Group will build a $1-billion plant in the southern province of Binh Duong in the second half of next year.
It signed a memorandum of understanding Wednesday with the Vietnam-Singapore Industrial Park Joint Venture Company to build the plant, its sixth globally and first carbon-neutral one.
The project will be its second Asian factory after it opened one in China in 2016. Lego has achieved double-digit growth in the region since 2019.
Demand is now on track to outstrip supply from its Chinese plant in the mid to long term, Lego’s Chief Operations Officer Carsten Rasmussen said.
“Growth in China and Asia is fantastic and we can see that over time that we will need more capacity,” he said, pointing to a growing middle class and high number of births in the region compared to more mature European and North American markets.
The move is the latest in Lego’s decade-old strategy of placing production close to key markets, which has helped rein in costs and shield it from external factors.
“It gives us shorter delivery time to our customers and make us able to react quickly on demand but it of course also makes us more resilient,” Rasmussen said.
Lego’s products are sold in over 130 markets.
Questions & Answers
Q.When is Lego planning to begin construction on its new plant in Vietnam?
When is Lego planning to begin construction on its new plant in Vietnam?
Lego Group is scheduled to start building its new facility in the southern province of Binh Duong during the second half of next year. This significant project marks a $1-billion investment for the company.
Q.What makes this new Lego factory unique compared to its other global sites?
What makes this new Lego factory unique compared to its other global sites?
This plant will be Lego's sixth globally and is notable for being its first carbon-neutral manufacturing facility. It represents a significant step in the company's commitment to sustainable operations.
Q.Why is Lego choosing to build a new factory in Asia now?
Why is Lego choosing to build a new factory in Asia now?
Lego has seen fantastic double-digit growth in the region since 2019, with demand expected to outstrip supply from its existing Chinese plant. This expansion addresses the growing middle class and high birth rates in Asia.
Q.How does placing production facilities closer to key markets benefit Lego?
How does placing production facilities closer to key markets benefit Lego?
This strategy shortens delivery times to customers, allowing Lego to react quickly to demand fluctuations. It also helps the company rein in costs and increases its resilience against external market factors.
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