NOKIA, Finland (March 10, 2005) — Nokian Tyres P.L.C. is shifting off-take production of heavy truck tires to Bridgestone Corp. from Group Michelin and has contracted India's Balkrishna Tyres Ltd. to make agricultural tires.
Starting this quarter, Bridgestone will start making Nokian-brand truck tires at its plant in Bilbao, Spain. Michelin had been making them at subsidiary plants in Olsztyn, Poland, and Budapest, Hungary, for the past four years. That output amounted to about $11 million in value annually, Nokian said.
Nokian said the change was “natural” since Bridgestone is a shareholder and cooperation between the two firms is increasing. Bridgestone owns an 18.5-percent share of Nokian.
Nokian's sales of heavy truck tire sales grew 11 percent last year to represent nearly 11 percent of its $748 million in new tire sales, the firm said.
The deal with Bridgestone is one of three off-take deals Nokian has. Last year it struck contract manufacturing deals with China's GiTi Tire to make Nokian-brand summer passenger tires for North America and with Slovakia's Matador A.S. to make summer tires for sale primarily in central Europe.
The GiTi Tire deal calls for 500,000 tires in 2005, gradually increasing to 1.5 million. The Matador deal covers 300,000 to 500,000 tires this year and up to 1 million a year eventually, Nokian said, and involves a $3.7 million investment by Nokian in Matador's Puchov plant.
Nokian also contracts the production of low speed-rated summer tires to an undisclosed Indonesian company and some light truck/SUV tires in the U.S.