In a significant development, Lego inaugurated a $1 billion facility in Vietnam on Wednesday, which is designed to produce toys without contributing to climate change. The plant, located in Binh Duong near Ho Chi Minh City, plans to operate entirely on renewable energy by 2026, becoming the first of its kind in the region.
This state-of-the-art factory is the Danish company’s sixth globally and its second in Asia, specifically serving the booming Southeast Asian market. It will employ advanced technology to manufacture Lego bricks, ensuring environmental sustainability in its processes. Lego CEO Niels Christiansen emphasized their commitment to a planet-friendly production model, ensuring future generations inherit a functional planet.
Lego’s new factory plays a pivotal role in the company’s larger mission to achieve net-zero carbon emissions by 2050, with an interim target of 37% reduction by 2032. Although the company uses oil-based plastics for its toys, it has invested over $1.2 billion to discover sustainable alternatives, despite encountering challenges along the way.
Vietnam, a rapidly industrializing nation, also aims to achieve net-zero emissions by 2050. This ambition aligns with the factory’s infrastructure, including 12,400 solar panels and an energy storage system, setting a benchmark for environmentally conscious industrial practices. The factory’s strategic location helps shield Lego from trade tariffs, further stabilizing its operations despite potential changes in global economic conditions.
Inside the facility, plastic grains are heated and molded into bricks with precise technology, primarily using automated systems and robots for packaging. Upon reaching full capacity, the factory will provide jobs for thousands of skilled workers, many of whom have received training at Lego’s facility in eastern China.
As manufacturing constitutes a fifth of Vietnam’s GDP and consumes half of the nation’s energy, the country is working towards phasing out coal plants by 2040. The expansive Lego factory, covering an area equivalent to 62 soccer fields, demonstrates how large-scale manufacturing can balance sustainability with profitability. Industry experts highlight how Lego’s investment serves as a model for other companies to manage environmental and economic goals successfully.
The factory also benefits from a forthcoming regulation called the direct power purchase agreement (DPPA), effective from 2024, which allows major international firms to directly buy renewable energy from wind and solar producers. This agreement will significantly aid in meeting the factory’s energy needs alongside its connection to a nearby energy storage hub for enhanced power efficiency.
Christiansen remarked that the factory’s reliance on solar power backed by battery storage enables consistent energy availability, complemented by additional supplies from other clean energy sources, covering 80%-90% of its needs. This initiative resonates with Vietnam’s green aspirations, as acknowledged by Jesper Hassellund Mikkelsen, Lego’s Senior Vice President for Asia Operations.
Additionally, a new distribution center in southern Dong Nai province will support Lego’s market expansion in Australia and other Asian territories. Adhering to high efficiency standards, the factory introduces paper bags instead of single-use plastics and compensates its environmental footprint by planting 50,000 trees, surpassing the number removed during construction.
Founded by Ole Kirk Kristiansen in 1932, Lego initially produced wooden toys before patenting its renowned plastic blocks in 1958. The company remains committed to enhancing the sustainability of its products, aiming to increase the use of recycled and renewable materials, although the transition involves higher costs than fossil-based plastics. They are optimistic about fostering a sustainable supply chain for eco-friendly materials in pursuit of long-term environmental goals.