Lego is to build its first factory in Asia as the toymaker taps into demand in the region and continues its push to add production in low-cost countries, writes Richard Milne.

The Danish maker of toy bricks will start building a factory in Jiaxing, China, next year. When the factory opens in 2017 it will only supply parts to Asia, which is set to become the world’s biggest market for toys. The plant is expected to meet 70-80 per cent of total regional demand for Lego.

Lego’s sales have almost trebled since 2007, making it the world’s second-largest toymaker by revenues behind Mattel. Asia has played a big part in its success, as its annual sales increase by more than 50 per cent in recent years. It is also highly profitable, with net profits last year of about $1bn and a gross profit margin of 71 per cent.