Joel Glickman, who invented the system and runs the Connector Set Toy Company of Hatfield, Pennsylvania, has been visiting sites in the UK and Ireland, and will decide by the end of the year where the dollars 15m (pounds 9m) factory will be built.
K'nex, an ingenious cross between Lego and Meccano, involves fitting together plastic pieces to form cars, houses, animals - anything that sparks the user's imagination. The toy, launched two years ago, has already recorded sales of dollars 75m (pounds 47m) and is on track to double that next year. At that rate it could soon be challenging the international dominance of Lego, based in Denmark.
Peter Brown, president of K'nex International, says European sales should reach dollars 300m within four years, and the factory will employ 200 people. It will also take on a number of professional constructors, whose job will be to design and build new models.
Three possible sites have been identified for the plant: Waterford in Ireland, the south Welsh valleys, and Thanet in Kent. If Thanet is chosen, K'nex will be one of the first low-tech foreign investors in south-east England in recent years. Thanet has recently been given development area status, which entitles it to the same grants as blighted areas further north. That location would also be a feather in the cap of the troubled Eurotunnel, as one of Kent's attractions for K'nex is its proximity to cross- Channel transport for sales on the Continent.
Mr Brown says he expects supply constraints to limit UK sales to pounds 2m this year, but they should reach pounds 10m in 1995. K'nex will be launched on the Continent next year, and the new factory should supply European demand from 1996.
K'nex has been a sales phenomenon in the US. In 1988 Mr Glickman, who had built up one of the country's biggest plastic moulding injection businesses but says he was bored, started experimenting by joining straws together during a wedding reception. After perfecting the system, he invested dollars 15m in the factory and launched K'nex in two cities in time for Christmas 1992. He sold dollars 1.5m worth in six weeks. The next year, with K'nex available in Toys 'R Us nationally, sales were dollars 23m. This year, he says, they will top dollars 50m.
Toy companies, which shunned Mr Glickman when he first offered them the system, have been queuing up to join him. K'nex International, responsible for overseas sales, is a joint venture with Hasbro, a US giant.
K'nex was launched here at London's Science Museum in summer, and the museum was so impressed by its educational possibilities that it made a large area available. A museum shop sold pounds 4,000 worth of K'nex in the first day and a half.