March 18, 2013 / 4:16 PM / 5 years ago

Toy maker Lego plans to build first China factory

COPENHAGEN, March 18 (Reuters) - Danish toy maker Lego said on Monday it plans to build its first factory in China next year to support its sales in fast-growing Asian markets.

Lego, the world’s third-largest manufacturer of play materials, said in a statement that construction will begin in early 2014 in the city of Jiaxing.

Lego did not specify exactly how much it would invest, saying only the sum would be hundreds of millions of euros. The plant would have about 2,000 employees once it is fully operational in 2017.

“Asia - including China - is a future core market for the Lego Group and therefore I am excited to share our plans for the new factory,” Chief Operations Officer Bali Padda said in the statement.

The Lego Group does not operate its own manufacturing facility in China currently but expects the new factory to supply approximately 70 percent to 80 percent of all Lego products sold in the region in 2017.

Lego Group sales in Asia have grown by more than 50 percent annually in recent years.

Lego currently has factories in Denmark, Hungary, Czech Republic and Mexico.

Lego Group reported last month that sales rose to 23.4 billion Danish crowns ($4.10 billion) last year from 18.7 billion crowns in 2011 despite an economic slowdown that has hurt rivals Mattel and Hasbro.

Last year, Lego extended its deal with American filmmaker George Lucas to manufacture models related to the Star Wars saga, including space ships and miniature figures.

The Lego group was founded in 1932 by Ole Kirk Kristiansen and has passed from father to son. It is now owned by Kjeld Kirk Kristiansen, a grandchild of the founder.

Its products range from about $2 for a box of simple building blocks to about $400 for a box of 3,152 components for a model space ship. ($1 = 5.7080 Danish crowns) (Reporting by Johan Ahlander; Editing by Charlotte Cooper)

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