LEGO,the 78 year old toy company,is expanding their plant near Monterrey,Mexico to the tune of $100 million. As the only LEGO manufacturing operation in North America,the Monterrey plant is key to production for the markets in Canada,the U.S. and Mexico.
According to senior director Pablo Salazar,the total investment will be “fully spent” by September 2011. The Lego Operaciones de Mexico SA de CV has benefited from a previous $300 million investment since its opening in March 2009.
Mexico real estate was a first choice for the new construction last year and this expansion because of a number of factors. Unlike some other toy manufacturers who have taken their productions over the seas to China,LEGO decided to keep their factory close to home. The company selected the Monterrey area due to low annual employee turnover,high supplier density,access to human resources staff and good infrastructure. Stable transportation like roads,airports and utilities were also a factor. The Monterrey facility is less than a day’s drive from the Lego distribution center.
Establishing and growing a plant in Mexico is part of their ongoing strategy of quickly servicing North American sales. The plant’s primary objective is to supply the markets in United States,Canada and Mexico with the lovable plastic building toys that have delighted children since 1932. The company is planning on increasing sales volume in the USA,which is the main consumer of their toy blocks.
The investment will be primarily spent on buildings,equipment,laboratories and new workers. Lego Operaciones de Mexico currently employs 1200 individuals at the complex,which will grow after the new equipment is added. For example,the LEGO plant currently has 182 plastic injection machines but will increase this to 384 once the new construction is completed. The construction is scheduled to cover 39,500 square meters (425,172 square feet).