Lego to shift production overseas

Lego is recording heavy losses

Danish building block firm Lego is considering moving its manufacturing out of its home in Denmark to help it recover from losses.

The company has already announced it intends to move one factory to the Czech Republic from Switzerland.

But further shifts are on the cards, which could see all or much of its production heading for either Eastern Europe or China.

The company made a loss of 156m kroner ($26m; £14m) in the first half of 2005.

For the whole of 2004, Lego lost 1.9bn kroner, and has already taken steps to turn things around by selling control of its theme parks to investment firm Blackstone Group for 375m euros (£254m; $466m).

But the toy market overall has been declining, hitting Lego despite its move into areas such as computer games and baby products.

Moving production to cheaper places overseas is part of the same strategy, chief executive Joergen Vig Knudstorp told Danish newspaper Boersen.

"In the long term, I think that everything will be moved," he said.

About 3,000 people work at Lego's main factory complex and headquarters in Billund, Denmark.