June 17, 2022
Lego is planning to spend more than $1 billion to build a factory in the United States, reports CNN.
On Wednesday, June 15, the company announced its plans for a 1.7 million-square-foot plant in Virginia—and ballyhooed that it would employ roughly 1,800 people there once it the facility is completed in 2025.
It will be the Danish company’s seventh global factory and second in North America, The other is located in Monterrey, Mexico.
Lego previously operated a U.S. factory in Connecticut, but that facility closed in 2006 because the company said kids prefer playing with electronics.
That was just 16 years ago, but times have changed: Like other toy makers, Lego is in the midst of a pandemic-induced boom as families look for entertainment at home.
Its sales jumped 27% last year—driven by new store openings in China and customers flocking back to its reopened shops. The family-owned company said it had outpaced the toy industry in all major markets during the year, when sales of its plastic bricks totaled more than $8 billion.
Building a factory in the United States also helps the company meet demand here, particularly when supply chains are clogged and the cost to ship goods is surging amid record fuel prices.
“Our factories are located close to our biggest markets which shortens the distance our products have to travel,” said Lego COO Carsten Rasmussen, in a statement. “Our new factory in the United States and expanded capacity at our existing site in Mexico means we will be able to best support long-term growth in the Americas.”
Christiansen also noted that Virginia was chosen for the carbon-neutral factory because it allows them to “build a solar park which supports our sustainability ambitions and provides easy links to country-wide transportation networks.”
The company has long been a target of climate advocates because of its plastic bricks and packaging. In reaction, the company has ramped up its sustainability efforts in recent years. It announced in 2020 that it plans to package its products in recyclable paper rather than single-use plastic. And last year, Lego unveiled a prototype brick made from recycled plastic.
The company currently employs 2,600 people in the United States and has more than 100 brick-and-mortar shops.
Research contact: @CNN