Nokian Tyres breaks ground on Romanian tire factory

ORADEA, Romania — Nokian Tyres P.L.C. broke ground May 11 on the firm's passenger tire factory in Oradea with Romanian Prime Minister Nicolae Ciucă and other high-level Romanian and Finnish officials in attendance.

The new factory, which is designed to take the place of the factory in Russia that Nokian has divested in the wake of Russia's invasion of and ongoing war with Ukraine, is slated to begin commercial-scale production in 2025.

Nokian has budgeted nearly $700 million for the factory, which will be rated at 6 million tires a year initially, with expansion possibilities longer term. The Romanian government has approved additional funding of over $100 million, for which Nokian Tyres said it is awaiting a final decision from the European Union.

"This investment is a significant strategic step enabling our future growth and development, Nokian Tyres President and CEO Jukka Moisio said.

"A world-class manufacturing facility in Europe is a key step in getting additional capacity and creating a balanced manufacturing platform as we build the new Nokian Tyres.

Moisio noted that plant will the first zero CO2 emission factory in the tire industry, using energy from renewable sources located nearby and steam generated fully without fossil fuels.

"We are committed to building a sustainable and competitive tire production facility," he said.

The factory will concentrate on the production of larger rim size passenger and SUV tires that will be sold primarily in the Central European market, Nokian said. The site will also house a distribution facility for storage and distribution of tires. The combined built-up area totals over 1 million square feet.

Adrian Kaczmarczyk, senior vice president, supply operations, said Nokian evaluated over 40 possible sites for the plant before settling on Oradea, which offered skilled workforce availability, logistical advantages and stable business environment.

"Central Europe is an important market for us, and the investment shows our commitment to the market," he said. "The new site will be strategically located close to our customers."

Oreadea is a city of 200,000-plus inhabitants in northwest Romania near the border with Hungary. It's about 160 miles east of Budapest.

Nokian expects to employ about 500 workers at the plant. The recruiting process will accelerate in 2024 and continue until the full workforce of the factory has been hired and the factory starts its operations.

"We will cooperate with the local schools in Oradea to provide the right type of training to our future employees," Adrian Kaczmarczyk, senior vice president, supply operations, said.

"In the beginning, we will utilize the in-house knowledge and the experience we obtained when we built our factory in the U.S. We will bring some 20 to 25 people from Finland to Oradea to help set up the factory."

By the time the Oradea factory is in full production, Nokian anticipates having a global production capacity of 15 million tires a year, including capacity expansions under way at plants in Nokia, Finland, and Dayton, Tenn.