Toymaker Lego has said it will make an investment of more than $1 billion in a facility in the United States to simplify supply chains and keep up with surging demand for its coloured plastic blocks in one of its major markets.

The facility in Chesterfield County, Virginia, will be the Danish company’s second in North America and seventh worldwide, after it unveiled a new factory in Vietnam last year. more info

The investment is in line with the company’s decade-old policy of locating production near important markets, which it claims has proved useful as the global retail industry deals with pandemic-related supply chain difficulties. In addition, the plant will be carbon neutral.

“Our strategy to be close to our core markets has only been confirmed recently,” Chief Operations Officer Carsten Rasmussen told the media.

According to him, the toy market is characterised by huge seasonal variations, and more than half of the company’s products in stores are new items.

“It’s difficult to predict what children and adults want to buy for a birthday or for Christmas. So the reaction time is very worthwhile to make sure we have the right products on the shelves,” said Rasmussen.

According to the corporation, the factory will be fueled by sustainable energy generated by an on-site solar park.

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By the end of the decade, Lego plans to replace oil-based plastic bricks with those created from renewable materials.

The 160,000-square-meter factory, which will employ around 1,760 people, is set to open in the second half of 2025. In 2006, Lego closed a smaller manufacturing in Connecticut, and the US market is now supplied by a manufacturer in Mexico.

“The U.S. market has done really well in recent years. We see huge potential in the United States and throughout the Americas,” said Rasmussen.

In the United States, where it has 100 outlets, the company today employs over 2,600 employees.

Last year, the family-owned company surpassed the toy industry’s growth, with sales increasing 27 per cent to 55.3 billion Danish crowns ($7.8 billion). In addition, the corporation is investing in expanding capacity at existing operations in Europe and China. read more Lego manufactures over 100 billion bricks every year and employs approximately 24,000 people worldwide.

(Adapted from Nasdaq.com)