Copenhagen, June 16 (BNA) Toymaker Lego said today, Wednesday, that it will invest more than one billion dollars in a plant in the United States to reduce supply chains and keep pace with the increasing demand for colored plastic bricks in one of its largest markets.
The plant in Chesterfield County, Virginia, will be the second Danish plant in North America and seventh globally, after it announced a new plant in Vietnam last year.
The investment is in line with a decade-old strategy of placing production close to its key markets, which the company says has been beneficial as the global retail industry grapples with supply chain issues related to the pandemic. The plant will also be carbon neutral.
Our strategy is to be close to our core nation“The rkets have only recently been confirmed,” Chief Operating Officer Carsten Rasmussen told Reuters.
He noted that the toy market is characterized by significant seasonal fluctuations, while more than half of the company’s products in stores are new items.
“It’s hard to predict what kids and adults want to buy for a birthday or Christmas,” Rasmussen said. “So reaction time is very useful for making sure we have the right products on the shelves.”
The company said the plant will be powered by renewable energy produced in a solar park on the site.
Lego has pledged to replace its oil-based plastic bricks with ones made from sustainable materials by the end of the decade.
The 160,000 square meter plant is scheduled to start operating in the second half of 2025 and will employ more than 1,760 people. Lego closed a smaller plant in Connecticut in 2006, and the US market is currently supplied from a plant in Mexico.
“The US market has done really well in recent years,” Rasmussen said. “We see huge potential in the US and across the Americas.”
The company now employs about 2,600 people in the United States, where it operates 100 stores.
The family-owned company outpaced growth in the gaming industry last year, with sales growing 27% to 55.3 billion Danish crowns ($7.8 billion). The company is also investing in increasing capacity in existing plants in Europe and China.
Lego produces approximately 100 billion bricks each year and employs approximately 24,000 people worldwide.
FKN