LEGO to speculate $1bn in direction of new manufacturing unit
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Toy giant LEGO said it sold more than $ 1 billion ($ 760 million).
After opening a plant in China five years ago, this will be the Danish company’s second plant in Asia. Lego has seen double-digit growth in the region since 2019.
“We are very grateful to the Vietnamese government for helping us to achieve our goal of building our first climate-neutral factory,” said Carsten Rasmussen, LEGO Chief Operations Officer.
Construction work on the site is slated to begin next year, with plans to cover energy consumption with solar panels on the roof and on a nearby farm.
Production at the plant is scheduled to begin in 2024 and will create up to 4,000 jobs over the next 15 years.
It is the latest development in Lego’s decade-long strategy to build manufacturing facilities near key markets, and comes after companies around the world faced global supply chain issues during the coronavirus pandemic.
“This gives the flexibility to react quickly to changes in local consumer demand, shortens the supply chain and reduces the environmental impact of long-distance shipping,” said the LEGO company.
Although the company also said its decision to build the plant in Vietnam was not accelerated by recent supply chain disruptions, some experts say it may serve as a lesson for other companies struggling to get their products to customers .
“What they’re doing is what we should have done a long, long time ago, which is to hedge our bets. If you see inquiries coming from a certain direction, you have to have alternatives, ”said Paula Rosenblum, managing partner of RSR Research.
However, the past two years have been challenging for some multinational companies with manufacturing facilities in Vietnam.
Some logistics experts suggest that the difficulties Vietnam has faced in recent months may help it face similar challenges in the future.
“Vietnam has learned a lot to offset the risk of Covid outbreaks and maintain production capacity during the last wave,” said Megan Benger of consulting firm TMX.
“We believe these findings are likely to benefit the country in the event of future outbreaks,” she said.
