Mattel Inc. will consolidate its North American manufacturing operations to Nuevo Leon, Mexico. The El Segundo-based tToymaker invested $47 million over the last two years to expand the Montoi S.A. de C.V. factory that will now handle manufacturing previously done in Tijuana and Montreal, Canada.

“Montoi plays a central role in our reimagined global supply chain operation, providing a strategic footprint for our network in the Americas, and supports our transformation strategy for growth as an IP-driven, high-performing toy company,” Chief Executive Ynon Kreiz said in a statement. “We are proud that this consolidation and targeted investment has helped to fuel the regional economy and we believe that Mexico has a unique opportunity to position itself as a global manufacturing hub for toy production.”

Standing at 2.15 million square feet, the plant is Mattel’s largest, manufacturing Barbie DreamHouse, Fisher-Price Power Wheels and MEGA Bloks. The toys are exported to nearly 30 countries. It Montoi employs 3,500 workers, up from 1,600 in 2019.
Mattel’s principal manufacturing facilities are located in China, Indonesia, Malaysia, Mexico and Thailand.

The consolidation is in line with Mattel’s “Capital Light strategy to make targeted, strategic investments to increase manufacturing capacity, improve productivity and leverage technological capabilities, while reducing cost and enhancing operational efficiencies,” according to the company.

Mattel discontinued production of MEGA Bloks at its 817,000-square-foot plant in Canada last year, and now uses it for “brand support” functions.
The toymaker began manufacturing in Tijuana in 1983, and operated a Mabamex plant that employed some 3,500 workers during peak production periods. The factory was sold last year for $15.8 million.

A portion of the $47 million investment was used to fund improvements to Montoi’s wastewater treatment system, which will help reduce onsite water consumption by 20% and hazardous waste attributed to oil-in-water contamination by 25%, according to Mattel.
The toy manufacturer has 36,300 employees, 88% of which work outside of the U.S. Last year it reported $903 million in net income on $5.45 billion in revenue.