BINH DUONG, Vietnam (AP) – Lego has officially inaugurated a $1 billion factory in Vietnam, touted as a state-of-the-art facility that will produce toys while eliminating the emission of planet-warming gases. This factory is set to operate entirely on clean energy, achieving its goal by early 2026.
Situated in the industrial zone of Binh Duong, near Ho Chi Minh City, this facility represents Lego's sixth factory worldwide and its second in Asia. The factory is designed to utilize advanced technology to manufacture vibrant Lego bricks tailored for the expanding markets of Southeast Asia.
Lego CEO Niels Christiansen emphasized the company's commitment to ensuring a livable planet for future generations, stating, “We just want to make sure that the planet that the children inherit when they grow up needs to be a planet that is still there. That is functional.”
The Binh Duong factory is a crucial step in Lego's broader objective of eliminating greenhouse gas emissions by 2050, with an interim target of reducing emissions by 37% by 2032. While the privately held company currently produces its bricks from oil-based plastics, it has invested over $1.2 billion in efforts to discover more sustainable materials, though these endeavors have met with varying success.
Vietnam is also on a path to achieve net-zero emissions by 2050, making the establishment of clean energy-operated factories essential. The factory will leverage 12,400 solar panels and an energy storage system, setting a precedent for more sustainable manufacturing processes in the region.
The facility employs high automation, utilizing robots to ensure precise manufacturing of bricks. Eventually, it will create jobs for thousands of skilled workers, many of whom have already received training at Lego’s facility located in eastern China.
Manufacturing constitutes about 20% of Vietnam's Gross Domestic Product (GDP) and accounts for half of the nation's energy consumption. There are plans to phase out coal power plants by 2040, emphasizing the need for clean energy solutions in the industrial sector.
Mimi Vu, co-founder of the consultancy Raise Partners in Ho Chi Minh City, noted that this Lego factory serves as a "blueprint" for achieving sustainability in large-scale manufacturing while maintaining profitability. She remarked, "Sometimes it takes a big company, like Lego, to take those risks. To show that we can do it… and we can be profitable."
The factory will also benefit from a new regulation set to take effect in 2024 known as a direct power purchase agreement (DPPA). This agreement will enable large foreign companies to buy clean energy directly from solar and wind producers, allowing Lego to meet its clean energy requirements more effectively.
Additionally, the factory will be linked to a nearby energy center capable of storing electricity in extensive battery systems. Christiansen mentioned, “So even if the sun is only shining during the day, we store the energy and can use it all over. That will cover by far the majority of the consumption of the factory.” The remaining 10% to 20% of the factory's energy demands will be met through agreements with other clean energy producers.
Jesper Hassellund Mikkelsen, Senior Vice President of Asia Operations at the LEGO Group, highlighted the shared aspirations between Lego and Vietnam in terms of climate action, stating that the solar and battery systems alongside the DPPA exemplify their commitment to sustainability.
The company is also planning to open a distribution center in Dong Nai province to support markets in Australia and other Asian regions where Lego sees growth potential. By locating its factories within the regions they supply, the company aims to mitigate the impacts of tariffs imposed during the previous U.S. administration.
Lego's new factory meets high energy efficiency standards and stands on an expansive area equivalent to 62 soccer fields. In an effort to offset its environmental impact, Lego has planted 50,000 trees—double the number it removed for the site. It is also the first factory to substitute single-use plastic bags with paper packaging.
Founded by Ole Kirk Kristiansen, who originally made wooden toys before patenting the iconic plastic bricks in 1958, Lego continues to seek ways to enhance the environmental sustainability of its products. Christiansen revealed that a third of the materials used in Lego bricks manufactured last year came from renewable and recycled sources, although this option is currently more costly than traditional fossil fuel-derived plastics. He affirmed the company's commitment to fostering the development of a supply chain for eco-friendly materials.
