Lego has announced intentions to expand its manufacturing operations in Vietnam in order to meet the growing demand for its colorful plastic bricks among Asian children.

The toy manufacturing giant stated that it will allocate more than $1 billion in the project, which will be located near Ho Chi Minh City, the country's economic hub.

The privately held Danish company said the project will be its second in Asia, following the establishment of a facility in China in 2016.

Lego said the construction of the new 44-hectare site will be in Binh Duong Province. The location, which will serve Southeast Asian consumers, will be the company's sixth factory, joining those in Europe, Mexico and China.

Since 2019, Lego has grown by double digits in the Asian market. Lego's Chief Operations Officer Carsten Rasmussen stated in an interview with the Financial Times that the business sees growth prospects in Southeast Asia "above all" other regions.

"We are really appreciative of the Vietnamese government's cooperation in assisting us in achieving our goal of building the world's first carbon-neutral factory," Lego's Chief Operations Officer Carsten Rasmussen said in a statement.

The site's construction is scheduled to begin in 2022, with plans to offset its energy use through solar panels on the building's roof and on a nearby farm.

The project is scheduled to commence production in 2024 and is estimated to generate up to 4,000 employment over the next 15 years.

Rasmussen told Reuters that demand is now on pace to outstrip supply from its Chinese factory in the medium to long term.

The move is the latest in Lego's decade-long policy of locating manufacturing near important markets, which has aided in cost containment and protected the company from external elements.

"It reduces our delivery time to clients and enables us to respond rapidly to demand, but it also makes us more resilient," Rasmussen explained.

He noted that recent global supply chain issues had not accelerated the decision to construct in Vietnam.

Lego, which is an abbreviation for "leg godt," which translates as "play well" in Danish, is also growing capacity in Hungary and upgrading machinery at its Danish and Czech plants, Rasmussen added.

Meanwhile, Lego established its largest Southeast Asian store in Sentosa, Singapore, this year, measuring 3,165 square feet and located near Universal Studios Globe. Additionally, it just built Southeast Asia's first Lego "retailtainment" location in Jakarta.