Building The First Solar-Powered Carbon Neutral Factory In Vietnam, Lego Disburses Rp14.3 Trillion

Illustration: Lego. (Wikimedia Commons/Legoland Billund Resort)

JAKARTA - Toymaker Lego said on Wednesday it plans to build a new factory in Vietnam to meet the growing demand for its products among children across Asia.

The Danish private company said it would invest more than $1 billion in the project, which will be the second factory in Asia after opening in China in 2016.

Since 2019, Lego has achieved double-digit growth in the Asian region. Lego Chief Operations Officer Carsten Rasmussen told Reuters their demand is currently on track to outpace supply from its Chinese factory in the medium to long term.

"Growth in China and Asia has been fantastic and we can see that over time we will need more capacity," he said, pointing to the growing middle class and high birth rate in the region compared to the more mature European and North American markets, citing Reuters 8 December.

The move is the latest in Lego's decade-long strategy to position production close to key markets, which has helped control costs and shielded them from external factors.

"This gives us shorter delivery times to our customers and allows us to react quickly to requests, but of course also makes us more resilient," said Rasmussen.

He added that the decision to build in Vietnam was not hastened by recent global supply chain disruptions.

Interestingly, this plant will also be Lego's first carbon-neutral factory, as it plans to harness energy consumption by solar power from panels on its roof and from nearby farms.

While Lego still makes toys from oil-based plastics, Lego has promised to replace them with ones made from sustainable materials by the end of the decade.

The factory, which will start production in 2024 and will employ as many as 4,000 people, will add a "significant addition" to Lego's annual production of about 100 billion bricks, said Rasmussen, who declined to provide further details.

Please note that Lego, which stands for "leg godt" which means "play well" in Danish, is also expanding capacity in Mexico, Hungary, and China, adding machines at Danish and Czech plants.