Why did Lego choose Vietnam, not China, to build first carbon-neutral factory?
- Toy behemoth’s move reflects how like-minded multinational firms are diversifying supply chains away from what has been known for decades as the world’s factory
- Lost investment dollars amid the US-China trade war and pandemic have sparked concerns within China, but analysts explain how Southeast Asia’s gains are limited
Lego, the world’s No 1 toymaker by revenue, recently broke ground in Asia on the company’s first carbon-neutral factory – a sprawling US$1 billion development that will span 44 hectares (108 acres) when it opens next year.
The massive undertaking, powered largely by solar energy, will feature state-of-the-art technology to mould, process and pack the plastic interconnectable bricks made by the 90-year-old Danish firm.
But unlike the iconic toymaker’s other manufacturing base in Asia – its factory in Jiaxing, China, which began operating in 2015 – this one is being built in Vietnam. It will be Lego’s sixth global manufacturing hub.
“[The Vietnamese government’s] plans to invest in expanding renewable-energy-production infrastructure, and a collaborative approach to working with foreign companies who are seeking to make high-quality investments, were among the factors in our decision to build here,” Carsten Rasmussen, Lego Group’s chief operations officer, said in December 2021.
Less than a year later, in November, the groundbreaking ceremony took place in Binh Duong, Vietnam’s wealthiest province and home to the country’s biggest industrial estates.
