Mattel Inc's best-selling toys, like Mega Bloks, will now be made in Mexico. And it is that the American toymaker has just become the latest company to move its supply chain closer to home after the slowdown caused by the coronavirus pandemic in Asia.

Mattel announced in mid-March that it had spent around 1 billion Mexican pesos, or $50 million, expanding a plant in the northern Mexican state of Nuevo León, prioritizing production in Latin America's second-largest economy. about centers in China, Vietnam and Malaysia.

The plant in Monterrey, near the US border, is now Mattel's largest at 200,000 square meters (2.25 million square feet), employing about 3,500 people.

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"Being able to have the product close to its consumer and not having to transport it from Asia will be more profitable and more competitive if costs are taken into account," Mattel's general director for Latin America, Gabriel Galván, told Reuters.

The expansion was first announced in 2020, Galván said. Mattel closed two factories in Asia in 2019 and, more recently, closed a plant in Canada and another in Mexico before expanding the megafactory to be located in Monterrey.

Galván said the toymaker's move was just the latest example of how concerns about overextended global supply chains are sparking new interest in "locating close" to industries like textiles and even autos, which are already a pillar of Mexican manufacturing.

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Mexico's finance minister also recently told local media that demand for industrial parks in northern Mexico was booming.

The toymaker plans to double its investment in the plant over the next five years, the state of Nuevo León said in a press release.

"It's a great opportunity (for Mattel)," Galván said, due to the plant's proximity to its Dallas-Fort Worth distribution center, the company's second-largest in the United States. "We can be there in 24 hours, so it's very convenient for us."

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