Danish toy giant, Lego Group, began building its first factory in Asia by laying the founding stone of the structure on Sunday. The facility, located in Jiaxing of Zhejiang Province, will be constructed to serve the middle class of the Asian market.

Lego will pour hundreds of millions of euros into the construction of the Jiaxing factory. The structure, which is found 120 kilometers from Shanghai, will become the company's main distribution center for its customers in Asia.

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The new facility is expected to generate 1,500 jobs upon the beginning of its operation in 2017. It will have sections for molding, decorating, and packaging toys. Jiaxing is seen as an ideal location for Lego because of its skilled laborers. According to Lego president and chief executive officer (CEO) Jorgen Vig Knustorp, the new factory will serve China, South Korea, Japan, and the rest of Southeast Asia.

The Queen of Denmark, Margrethe II, was one of the attendees of the commencement ceremony of Lego. The activity was part of the Danish Queen's state visit to China.

In 2013, Lego posted a net profit reaching $1.12 billion, which is a 9% increase from the previous year. In February, the Danish toy maker's annual results showed that its sales went up by 11% to $4.65 billion. Last year, its sales in China rose by over 50%.

Lego currently has factories in Denmark, Hungary, Mexico, and the Czech Republic. The firm expects the new Chinese factory to account for 70% to 80% of its sales in the region by 2017. The Jiaxing facility will be Lego's third biggest factory in the world.

The loosening of China's one-child policy in China on November 2013 is good news for companies targeting children. The new policy now allows Chinese couples to bear a second child if either of the parents is an only child.