BILLUND, DENMARK (Sept. 21, 2:30 p.m. ET) — Global toy maker Lego A/S Lego has announced plans to build a 860,000 square foot factory in Nyíregyháza, Hungary, part of the toy giant's 100 million euro ($137 million) expansion plans.
The company already has a plant on the site that molds a full range of the group's Duplo brand product range.
In a statement, managing director Jens Peter Clausen said: “Existing production at Nyíregyháza has proved capable of delivering high quality products at competitive prices. However the current factory and flow is not supporting Lego Group requirements.
“The factory investment is based on long term plans, demonstrating that the Lego Group believes the Nyíregyháza area is the right place for Duplo production for many years to come.”
In the first phase, the company will build a 13,000-square-foot warehouse next year. Inauguration of the second phase is planned for 2015. It will incorporate facilities for injection molding, decorating, assembly, pre packing, packing and warehousing.
By 2015 the factory will be equipped with 450 molding machines.
Rumors of Lego's desire to expand in Hungary began circulating in March, when national news reports said the firm was seeking a site in the city.
The company formerly outsourced production in Hungary to Flextronics International Ltd., a Singapore-based global electronics manufacturer, which operated the Nyíregyháza site. Then, in 2009, Lego reversed its policy and took back direct control of production in Hungary. Lego later transferred work to Nyíregyháza from a second Hungarian plant in Sárvár.
Lego is committed to serving the growing toy market in Eastern Europe and is in the process of expanding its industrial site at Kladno in the Czech Republic.