Lego lays cornerstone of €200 mln expansion in Hungary

Danish toymaker Lego on Friday laid the cornerstone of a €200 million expansion of its production capacity in Nyíregyháza. Prime Minister Viktor Orbán participated at the ceremony. Annual capacity in Nyiregyhaza will rise from 20 million boxes of Lego to 30-40 million when production starts at the new plant, said Jesper Hassellund Mikkelsen, who heads Lego's Hungarian unit. The number of blocks produced will double to 15 billion-20 billion, he added. Production at the new plant is expected to start in Q1 2014. Lego Group COO Bali Padda said the company was building production capacity in Hungary for the long term. The new facility will be a plant of the future, one that meets all environmental requirements, he added. Lego investment director Martin Svejda said the decision to build the factory was not a question of labour costs, but of market proximity. He stressed the importance of the plant being close to the European markets it supplies, but noted the it also delivers Lego's Duplo building blocks globally. The new plant will be three times the size of Lego's existing one in the city's industrial park. It will have 768 injection moulding machines and a warehouse for 80,000 pallets of product. The expansion will create 250 jobs, bringing headcount at the company's base in the city to about 1,500 by next year. Danish companies have invested more than €1 billion in Hungary, creating close to 13,000-14,000 jobs, said Danish ambassador to Hungary Tom Norring.