New $1 Billion Carbon Neutral Factory in Vietnam
LEGO, the world’s most popular toy brand, has announced plans to build a new $1 billion carbon-neutral factory in Vietnam. This plant is part of the group’s overall strategy to expand its global supply chain footprint. The new facility will be in close proximity to key markets and will feature energy-efficient production equipment.
The new factory is set to begin producing LEGO bricks in 2024. It is slated to employ 4,000 workers and contribute to the company’s target to reduce absolute carbon emissions by 37 percent by 2032. It will also help Lego in its efforts to reduce transportation pollution. The company’s decision to open a factory in Vietnam follows three years of double-digit sales growth in the Asia-Pacific region.
The Binh Duong LEGO factory is expected to be one of six global LEGO outposts. The plant will employ skilled local employees who will operate the same high-tech production equipment used at LEGO factories around the globe. It is envisioned that most products produced will be exported to the Asia-Pacific region.
In addition to manufacturing LEGO bricks, the new facility will also be a significant source of green power. It will rely on a nearby solar farm that will provide 100% renewable energy for the site. The Lego Group has signed an agreement with the Vietnam Singapore Industrial Park Joint Venture Company Limited, or VSIP, to establish the factory. In a ceremony held on November 3, the company broke ground for the project.
The company has also announced its intention to use the latest energy-efficient production equipment at the plant. It will be LEED Gold certified and is expected to be the world’s most sustainable facility. The factory will be located on a 44-hectare plot of land and equipped with rooftop solar panels to generate the factory’s annual energy requirements, along with an external solar power plant.
The factory will be the first of its kind to be run carbon-neutral. Lego has also decided to invest in a 40-MW solar power plant to power the new manufacturing facility. The Vietnamese government has committed to supporting the plan.
While evaluating several countries in Asia, the LEGO Group opted for Vietnam. Its choice was based on multiple economic incentives, including the country’s renewable energy policies and human resource capabilities. The company cited the Vietnamese government’s collaborative approach to working with foreign companies. In addition, it believed that the country’s strong environmental policies, combined with its strategic location, made it an ideal choice.
The LEGO Group is also supporting children in the region. It has partnered with non-governmental organizations (NGOs) to ensure that children can have play opportunities. It has committed to giving US$150,000 to children in need. In turn, the facility will create many jobs in the area and support local economic growth.
The LEGO Group is also aiming to shorten its supply chain. By building the new facility in Vietnam, the company will avoid shipping the product from China to Asia-Pacific regions, which can have a large carbon cost. It will also increase the efficiency of its current global supply chain.