Lego to Build Plant in China

Danish toymaker Lego is to start work on its first Chinese factory in Zhejiang next year. The plant will help satisfy demand in Asian markets where sales have been growing at over 50% per year, boosted by rising middle classes and the product’s educational benefits. From Jens Hansegard and Laurie Burkitt at The Wall Street Journal:

“This is not a cost-cutting exercise […] It’s a direct result of our strategy to have production close to the core markets. This factory will not supply Europe or North America,” Lego spokesman Roar Rude Trangbaek said, adding that the Lego factory in China will be able to supply 70% to 80% of the Lego bricks sold in Asia in 2017.

[…] Currently, Lego sources a small portion of its Lego and Duplo bricks from Chinese suppliers as well as the majority of its electronic and textile components.

But the coming Lego factory in , about 100 kilometers from Shanghai, will be a complete factory, a replica of Lego’s four existing in , Mexico, Hungary and the Czech Republic.

Lego’s total global sales reached $4.1 billion last year.