NOKIA, Finland (Feb. 19, 2004) — Nokian Tyres P.L.C. is planning to build a passenger tire factory near St. Petersburg, Russia, in the coming 12 to 18 months at a cost of about $67 million.
Nokian's plan is in addition to its off-take production agreements with Russia's Amtel Group. The new plant will have capacity for 1.5 million tires annually at first, the company said, with expansion to 8 million units a year over a 10-year period.
The tire maker said it plans to start production at the new plant during 2005. Construction and other related permits are now being processed.
The plant will produce Nokian-branded tires, primarily for the growing Russian market at first.
In Russia, Nokian is marketing both its own brand and the Nordman brand produced under contract by the Amtel companies. Regarding the latter, Nokian emphasized that it and its Amtel-Nokian Tyres joint venture have valid manufacturing agreements with Amtel, trying to put to rest persistent rumors that the companies' relationship had ended.
Nokian and Amtel previously announced plans to build a 1.2 million-tire-per-year plant on a greenfield site in Russia and are 50-50 partners in a tire manufacturing venture involving Amtel's factories in Kirov and Voronezh, Russia, and Belaya Tserkov, Ukraine.
The two firms pledged $25 million in investments in the Amtel facilities to upgrade them for production of up to 2 million passenger and light truck tires to Nokian specifications in 2004.