The following information was available on the history page on the official LEGO website. Currently, it is not available but luckily the text was archived by the Wayback machine. (For the complete archive of the history pages from that date, see here.)
System Plast A/S
From 1958 to 1960 Karl Georg Kirk Kristiansen, the brother of LEGO owner Godtfred Kirk Kristiansen is in charge of the LEGO Group’s plastic department. Following Godtfred Kirk’s decision to halt production of wooden toys after the fire in February 1960, Karl Georg Kirk Kristiansen chooses to leave the company and set up his own plastic‑products factory in a town 40 km south-east of Billund.
In November 1981, the LEGO Group acquires the factory, called System Plast, from Karl Georg Kirk Kristiansen, who stays on as general manager until he retires in 1988. The factory manufactures tires for LEGO wheels.
In 1982, the LEGO Group sets up a molding facility in the premises, including a 2,300‑m² molding hall with an annual capacity of 150 million tires – to which the plant owes its nickname: “The Tire Factory”.
In 1993, production of tires by System Plast A/S is transferred to the LEGO Group’s factory at Kornmarken in Billund. The change coincides with the introduction of a new plastic material. The System Plast workforce is invited to move to Billund – about half the employees say yes.
The story on LEGO’s website skips from 1960 to 1981. A lot must have happened in all those years. A quick Google search provides a bit more background information.
In 1959, LEGO was split into two brands. LEGO continued to make their plastic products under the LEGO name, and the wooden toys were sold under the new name BILOfix. Gerhardt Kirk Christiansen became the manager for this new division (which made sense, he had been the manager of the wood division before).
On 4 February 1960, the LEGO department for wooden toy production was struck by lightning and burned down for the third time. Godtfred Kirk Christiansen decided that the department would not be rebuild. His brothers disagreed. Finally, the discussion caused Karl Georg and Gerhardt to leave LEGO and start their own business. Gerhardt Kirk Christiansen founded the company BILOfix in Kolding, Denmark, in February 1962, taking the remaining BILOfix molds/machines with them.
The BILOfix product line included toys that consisted of both woorden and plastic elements. Those plastic parts were made by Karl Georg Kirk Kristiansen’s company on Haderslevvej in Kolding.
LEGO developed the wheel in 1962. I wonder if the rubber parts of those wheels have been supplied by Karl Georg Kirk Kristiansen’s company from the beginning.
It also seems like Minitalia bricks were made in Kolding by “a company that did contract work for LEGO”. I wonder if this company was also System Plast…
While System Plast was known as the “Tire Factory”, they might have taken more production work for LEGO, making regular ABS products as well…
Merger with LEGO
LEGO aquired System Plast in 1981. This way, LEGO aquired all the production knowledge and resources related to the production of their tires (and any other products) and neatly tied up any loose legal ends that might exist related to them. To me, that seems to be a very LEGO-like way of doing business.
Finally, a mystery explained!
The work contracted out to System Plast might explain why we found several Danish test bricks in non-LEGO colors “near Billund”. (Kolding is only about 40 km from Billund.) This puzzled me before I learned of this connection. If these were test bricks made to do acceptance tests on new raw material received, then we should have found regular LEGO colours only.
Test bricks found
The following molds were found in an amazing lot of test bricks in Kolding:
bricks with the old logo, mold pip bottom edge
(production mold design type >”early 1960s”)
• M (without flowrib)
bricks with the modern logo, mold pip short side, with flowrib
(production mold design type >1968)
• M (with flowrib)
bricks with the modern logo, mold pip on the stud
(production mold design type >1976)
bricks with the modern logo, mold pip on short side with flowrib
(made >1976 for transparent bricks that kept using the >1968 design after 1976)
• number inside tubes 343-350,
• number inside tubes 351-358
We had already seen some of these molds
• All of these molds were previously used as regular production molds,
• Several of these molds were already known as used for test bricks, but in different locations.
— M without flowrib: Found in the UK
— N with flowrib: Possibly the same as N-bricks that are found in the UK
— Number inside tubes 343-350: Previously found in Germany with known Bayer bricks
— Number inside tubes 351-358: Was found in Denmark before. Thought to have been made by LEGO, but we could not explain the odd colours.
[Original post and comments on Flickr.]