Danish toymaker Lego expands amid sale surge

Jun 14, 2022, 8:21 PM | Updated: Jun 15, 2022, 9:06 am

COPENHAGEN, Denmark (AP) — Danish toy company Lego said Wednesday it plans to invest more than $1 billion over 10 years to build a new factory in the U.S. state of Virginia and to enlarge an existing factory in Mexico.

The moves in North America follow Lego’s announcement last year of a similar investment in Vietnam to serve the Asian market.

“Our new factory in the U.S. and expanded capacity at our existing site in Mexico means we will be able to best support long-term growth in the Americas,” Lego’s chief operations officer, Carsten Rasmussen, told The Associated Press.

The 1.7 million-square-foot (158,000-square-meter) factory in suburban Richmond, Virginia will employ more than 1,760 people, the company said. Construction on the carbon-neutral facility is set to begin in the fall, with production to start in the second half of 2025.

The Virginia factory will be the seventh Lego factory globally.

Its manufacturing site in Monterrey, Mexico, which primarily supplies the U.S. market, will be expanded and upgraded to meet growing demand for products. Rasmussen called the expansion as “significant.”

Lego saw its profit, revenue and sales surge in recent years.

In March, the family-owned toymaker reported its net profit increased by more than a third last year, a 22% rise in consumer sales and revenue growth of 27%. The upward trend was similar to the previous year.

The coronavirus pandemic likely accounts for some of growth. As more children stayed home during lockdowns, parents bought Lego’s colorful plastic bricks to keep them entertained through days of isolation.

“We have had some good years in recent years,” Rasmussen told the AP.

Lego’s factories on three continents positioned the company well to navigate shifting demands. It produced in Mexico for its American markets and in China for its Asian market. The production for Europe comes from factories in the Czech Republic, Hungary and Denmark.

To support growth in Asia, Lego announced in December that it would invest more than $1 billion, build its first carbon-neutral factory in Vietnam and create up to 4,000 jobs over the next 15 years.

Construction is set to begin in the second half of 2022 and production is due to start during 2024.

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Danish toymaker Lego expands amid sale surge