The company said construction of the 120,000sqm plant in Jiaxing would begin next year and it would create 2000 Chinese jobs.
The new plant will be around 100km from Shanghai where the Lego is planning to locate a regional distribution centre for Asia.
It will be fully operational by 2017.
"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. Asia – including China – is a future core market for the Lego Group and therefore I am excited to share our plans for the new factory. Having full control of the production process is essential to deliver products of a consistent high quality and safety and in harmony with our values," said Bali Padda, COO.
"In addition by placing a manufacturing site in the region we reduce our environmental impact as we will reduce the need for transporting products from Europe to be sold in Asia."
In 2009 Lego opened its first non-European factory in Monterrey, Mexico.
Until now, products sold in Asia have been shipped from Europe.
Lego said sales in Asia had grown by more than 50 percent annually in recent years.
"Based on our current expectations for growth in Asia, the factory should be able to supply approximately 70-80 percent of all the Lego products sold in the region in 2017. All products made in the new factory will be sold in Asia," said Michael McNulty, Senior Vice President of Procurement.
"The new factory will be built and run with the same technology, automation and standards for employee safety and product quality as our Lego factories in Denmark, Hungary, Czech Republic and Mexico, and it will have a distinct Lego look and feel."
Image: © Lego
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