Danish maker of toy bricks Lego plans to build and operate its own factory in China.

The factory, expected to begin construction in 2014, will supply products for the growing Asian market. It will be built in Jiaxing, right in the middle of the Yangtze River Delta, about 100km from Shanghai where Lego is planning to locate a regional distribution centre for Asia.

“It is our strategy to have production close to our core markets in order to secure short lead-time and world class service to our customers and consumers, and it has proven a successful strategy,” says COO Bali Padda.

According to senior VP of procurement Michael McNulty, the new factory will be built and run with the same technology, automation and standards for employee safety and product quality as its factories in Denmark, Hungary, Czech Republic and Mexico.

The Lego Group currently does not operate its own manufacturing facility in China, but with the new production site including moulding, decoration and packaging facilities it will have a supply base for future growth in Asia.

The company’s sales in the region have grown by more than 50 per cent annually in recent years.

“Based on our current expectations for growth in Asia, the factory should be able to supply approximately 70-80 per cent of all the Lego products sold in the region in 2017. All products made in the new factory will be sold in Asia,” says McNulty.

The factory will be fully operational in 2017 and will have approximately 2000 employees.