Top-selling Mattel Inc products such as Mega Bloks will now be manufactured in Mexico, as the American company becomes the latest to relocate its supply chain closer to home following Asia’s slowdown caused by the coronavirus pandemic outbreak.

Mattel stated in mid-March that it had invested approximately a billion pesos ($50 million) in developing a plant in Nuevo Leon, Mexico’s northernmost state, prioritising production in Latin America’s second-largest economy over hubs in China, Vietnam, and Malaysia.

With 200,000 square metres (2.25 million square feet) and close to 3,500 employees, Mattel’s plant in Monterrey, near to the US border, is currently the company’s largest.

“Being able to have product close to your consumer and not having to transport it from Asia, that’s going to be more profitable and more competitive when you take costs into account,” Mattel Latin America Managing Director Gabriel Galvan told Reuters.

According to Galvan, the extension was first proposed in 2020. Mattel shuttered two plants in Asia in 2019 and a facility in Canada and another in Mexico lately in preparation for the factory’s mega-expansion.

Galvan said the toymaker’s move was only the latest example of how concerns about over-extended global supply chains are rekindling interest in “nearshoring” in areas like textiles and even auto manufacture, which is already a mainstay of Mexican manufacturing.

Similarly, Mexico’s finance minister recently told local media that demand for industrial parks in northern Mexico was on the rise.

According to a press release from the state of Nuevo Leon, the toymaker expects to increase its investment in the plant over the following five years.

“It’s a big opportunity (for Mattel),” Galvan said, due to the plant’s proximity to its Dallas-Fort Worth distribution center, the company’s second-largest in the United States. “We can be there in 24 hours, so for us it’s really convenient.”

(Adapted from PublicNow.com)