Construction of LEGO's first production facility in Asia started in Jiaxing, Zhejiang province on Sunday.

The new factory is planned to employ 1,500 people when completed in 2017 and will supply up to 80 percent of the Danish toy company's products to a growing Asian market.

The factory is being built in the city of Jiaxing, right in the middle of the Yangtze River Delta and located approximately 100 kilometers from Shanghai where the LEGO Group will have its central distribution center for Asia.

"We believe the location is perfect in regards to both recruiting and securing the best environment for future LEGO employees," said Michael McNulty, senior vice-president of LEGO Asia manufacturing.

The new production will include molding, decoration and packaging facilities, he said.

The plan was first announced in early 2013, and was described as a "three-digit-million-Euro investment" though the exact amount of investment was not revealed.

The Sunday ceremony was witnessed by the Queen of Denmark as part of a state visit to China.