From the Super Mario Wiki
The Quirk Factory is a large facility located on the planet Quirk; it is owned by Moon Man Koopa and operated by several Koopa Troopas and their Quirk slaves. The Quirk Factory is only ever seen in The Super Mario Bros. Super Show!
It is unknown what exactly the Quirk Factory produces, though it seems to involve the rocks of Quirk. These rocks are mined by Moon Man Koopa's Quirk captives and transported to the Quirk Factory on large barges, pulled down a river by the Quirks, all under the supervision of Astro Mouser.
Among the various contraptions seen in the Quirk Factory, there are security laser turrets, conveyor belts, robotic arms and a giant, remote controlled magnet. After some trouble with Mario, Luigi, Toad and Princess Toadstool, Moon Man Koopa upgraded the security of the Quirk Factory, forcing all his Quirk slaves to wear chains and shackles, which were remote-controlled.
The Quirk Factory was apparently shut-down when Moon Man Koopa was driven off Quirk, as evidenced by the fact that the smoke stacks of the Quirk Factory no longer produced blue smoke once Moon Man Koopa was gone.