Danish toy company Lego Group will build a $1-billion plant in the southern province of Binh Duong in the second half of next year.
It signed a memorandum of understanding Wednesday with the Vietnam-Singapore Industrial Park Joint Venture Company to build the plant, its sixth globally and first carbon-neutral one.
The project will be its second Asian factory after it opened one in China in 2016. Lego has achieved double-digit growth in the region since 2019.
Demand is now on track to outstrip supply from its Chinese plant in the mid to long term, Lego’s Chief Operations Officer Carsten Rasmussen said.
“Growth in China and Asia is fantastic and we can see that over time that we will need more capacity,” he said, pointing to a growing middle class and high number of births in the region compared to more mature European and North American markets.
The move is the latest in Lego’s decade-old strategy of placing production close to key markets, which has helped rein in costs and shield it from external factors.
“It gives us shorter delivery time to our customers and make us able to react quickly on demand but it of course also makes us more resilient,” Rasmussen said.
Lego’s products are sold in over 130 markets.