Dive Brief:
- Lego Group will invest over $1 billion to open a factory in Chesterfield County, Virginia, the company announced Wednesday in a press release.
- Construction will launch in the fall of this year, with a projected start date for production in the second half of 2025. The 1.7 million-square-foot facility will operate as carbon neutral.
- The Virginia facility will be Lego’s first in the U.S., which is currently supplied by its factory in Monterrey, Mexico. The additional capacity will help support Lego’s long-term growth plan in the Americas.
Dive Insight:
Like other facilities in the toy maker's biggest markets, the new one in Virginia seeks to shorten the distance products need to be transported, according to Carsten Rasmussen, Lego Group’s chief operations officer.
“This allows us to rapidly respond to changing consumer demand and helps manage our carbon footprint,” Rasmussen said.
Lego’s supply chain strategy helped it, particularly during the height of the pandemic. While much of the retail industry was beleaguered by delays and delivery disruptions, Lego’s strategy of building factories in key areas resulted in a shorter supply chain.
Lego does “a better job of nearshoring their production to the market where it’s going to go,” James Zahn, deputy editor of “The Toy Book,” said in an interview with Retail Dive this spring. “They’re not being transported to the other side of the world. Lego has a better supply chain, just in general.”
The new facility will emphasize carbon neutrality and will be designed to minimize energy consumption and the use of non-renewable resources. All of its daily energy needs will be matched by renewable energy through an on-site solar park.
Lego Group also announced an expansion of its factories in Europe and China. Besides Mexico, the company also has factories in Denmark, Czech Republic, Hungary, China, and Vietnam.
The Virginia factory, which is the company’s seventh, will create over 1,700 jobs. While construction is underway, a temporary packaging site will open in 2024 that will employ up to 500 people.
