Lego to build Chinese factory to serve rapidly growing Asian market

COPENHAGEN (AFP) - Danish toy maker Lego said Monday would build a Chinese factory that employs 2,000 people to serve the rapidly growing Asian market.

Construction of the 120,000 sq m plant in Jiaxing, around 100 km from Shanghai, is expected to begin early next year, the group said in a statement.

Monterrey, Mexico became Lego's first non-European factory after opening in 2009. Until now, products sold in Asia have been shipped from Europe.

The world number three toy maker considered Asia "a relatively small market" in its 2012 annual report, but said Monday it had seen annual growth of over 50 per cent in recent years.

"Based on our current expectations for growth in Asia, the factory should be able to supply approximately 70 to 80 per cent of all the Lego products sold in the region in 2017," said Mr Michael McNulty, a senior vice president.

"The new factory will be built and run with the same technology, automation and standards for employee safety and product quality as our Lego factories in Denmark, Hungary, the Czech Republic and Mexico," he added.

Lego said it would make a "triple digit" million euro investment in the plant.

The family-owned group said in February it grew its share of the global toy market last year to 8.6 per cent from 7.1 per cent, as it posted a 35 per cent rise in annual net profit.

Join ST's Telegram channel and get the latest breaking news delivered to you.