Moldy Peaches

Rising production costs in some parts of central Europe are causing businesses to examine the potential of relocating to cheaper destinations. Now, it appears that the Danish toy maker Lego will close a factory in Switzerland and five European distribution centers, and move those operations to the Czech Republic.

The high costs in Switzerland are cited as the key factor in deciding to transfer production to Eastern Europe. Lego didn't say how many jobs would be created at its factory in Prague as a result of the move of the Swiss factory, which employs 239 people.

Lego said it would also open a European distribution center in the Czech capital in early 2006, and close five existing centers in Denmark, Germany and France. Two of the centers — in Billund, Denmark, and Hohenwestedt, Germany — are part of the Lego group. The three others are run by other companies.