Lego Builds First Carbon-neutral Factory in Vietnam Amidst US, China Trade War

Andi C., Tech Times 11 January 2023, 10:01 am

Lego will soon construct its first carbon-neutral factory in Vietnam as a part of its environmental mission.

In 2006, the toymaker giant stopped producing in the United States and moved its operations to Mexico. This was done after closing its Enfield, Connecticut, facility. Lego at the time claimed declining sales as a result of kids favoring electronic toys.

However, it looks like Lego has shifted its focus to more important efforts, namely, an environmental initiative. Lego will soon build its sixth global manufacturing center in Vietnam, reportedly its first carbon-neutral factory.

Green Queen reports that Modern technology will be used in the vast project, powered primarily by solar energy, to mold, process, and pack the plastic connectable bricks produced by the 90-year-old Danish company.

Lego's Carbon Neutral Factory

Nikkei Asia reports that construction on the new Lego factory is scheduled to begin by mid-2025

To become a carbon-neutral facility, the facility will limit its usage of non-renewable resources and minimize its energy use. Lego says it will also streamline its supply chain and help its expansion across the region, with all electricity coming from an on-site solar "park."

The first carbon-neutral factory for Lego, the largest toy manufacturer in the world by revenue, just broke ground in Asia. The US$1 billion project will cover 44 hectares when it opens the following year.

Lego's Environmental Initiatives

Lego unveiled recycled plastic bricks for the first time in June 2022, calling it its newest step toward sustainability.

The PET plastic from used bottles was used to create the bricks, which were the first to pass the company's standards for quality and safety. A team of around 150 employees is reportedly searching for environmentally friendly options for the producer.

"The biggest challenge on our sustainability journey is rethinking and innovating new materials that are as durable, strong, and high quality as our existing bricks - and fit with Lego elements made over the past 60 years. With this prototype we're able to showcase the progress we're making." Vice President of Environmental Responsibility at the Lego Group stated.

What Is Vietnam's Role in US-China Trade War?

According to the South China Morning Post, the US-China trade war started in 2018 when Washington increased tariffs on manufacturing operations in China and Vietnam after attracting more interest from international investors.

In 2018, FDI in Vietnam climbed by 9.1% to US$19.1 billion; in 2019, it increased by 6.7% to US$20.38 billion. That year saw a considerable increase in investment from China and Hong Kong to Vietnam, with increases of 165 and 24%, respectively.

However, Vietnam has significantly more land than Guangdong, China's most populous and prosperous province and a major manufacturing center in the south of the country, but Guangdong's GDP was less than a fifth as large in 2021, and Vietnam's population is roughly 80% that of Guangdong.