Some children may not get their Christmas wishes fulfilled this year as Lego’s factories, although running at full speed, may not be able to make enough plastic bricks to keep up with demand from toy stores in Europe.
The Danish company has become the world’s largest toymaker by sales, overtaking US Barbie-maker Mattel, thanks partly to toys linked to movies, including The Lego Movie. But difficulties in forecasting demand accurately means some orders may not be filled on time.
“We will not be able to deliver all of the orders coming from customers in the remainder of the year,” spokesman Roar Trangbaek says. He declined to specify which lines of toys or which European countries will be affected.
Trangbaek says the company would be able to deliver the orders it had already received, but may have trouble filling new orders later this year.
“It is really extraordinary and it has exceeded both ours and our customers’ forecasts,” Trangbaek says when asked why the company had not foreseen the surge in demand.
The Danish company’s sales grew by 18% in the first half of this year to RM9bil (US$2bil), putting it ahead of Mattel and Monopoly-board maker Hasbro, whose revenues came in at RM8.1bil (US$1.9bil) and RM6.4bil (US$$1.5bil) respectively.
“We are running our factories at maximum capacity and will do everything we can to meet demand,” Trangbaek says.
The unlisted company, owned by the family of founder Ole Kirk Kristiansen, invested more than $3bil Danish crowns in plants and equipment last year to make more toys. Before Christmas last year, there were some shortages in some countries last year including Denmark and Canada.
The company is building a factory in Jiaxing in China, 100km from Shanghai, which is expected to be up and running in 2017 and should produce most of the Lego toys for Asia in the future. Lego already has factories in Denmark, Hungary, Czech Republic and Mexico. – Reuters/Teis Jensen