TOKYO — Bridgestone Corp. has decided to sell all of its assets in Russia, citing the lingering "uncertainties" of doing business there and untenable supply-line challenges.
The move comes seven-plus months after Bridgestone suspended its operations in Russia following that nation's military invasion of neighboring Ukraine.
Bridgestone said the process of finding a buyer/exit strategy could take several months. The tire maker is seeking a local buyer for its 200-acre tire factory and campus in Ulyanovsk, a city of 600,000-plus residents located in the Ural mountains roughly 525 miles west of Moscow.
Most of Bridgestone's 1,000 Russian employees are located there.
The move likely will broaden sales avenues for Russian tire manufacturing companies and imports of tires from China, according to sources.
"Following the decision in March to suspend all manufacturing activities in Russia, as well as freeze any new investments and suspend all exports to Russia, the company carefully considered a long-term solution in the interest of its employees, customers and suppliers," Bridgestone said Oct. 31.
Bridgestone opened the Ulyanovsk plant in December 2016. The facility has a rated annual capacity of 5 million tires. Production is centered on 13- to 19-inch passenger and light truck tires, many of which are targeted as OE fitments.
The Ulyanovsk facility is "one of the most advanced among all Bridgestone enterprises in the world," Bridgestone said. Still, the Russian operations account for just 2% of the tire maker's global revenue.
Bridgestone has maintained a presence in Russia since 1998 with its sales and marketing office in Moscow.
As Bridgestone seeks a buyer for its Russian assets, it has pledged continued support for its Russian employees. Bridgestone has been paying its employees' salaries and benefits in full since operations were suspended early this year, and will continue to do so until the assets are sold.
Of the seven non-Russian tire companies with manufacturing operations in Russia, all have cut business activities there, and two — Group Michelin and Nokian Tyres P.L.C. — have declared at different points during the year that they are cutting ties completely.
Nokian disclosed Oct. 28 it had agreed to sell its facility and assets to Russian energy and chemicals company P.J.S.C. Tatneft. The purchase price of the "debt-free and cash-free" sale is expected to be around $400 million.
Nokian said the final purchase price is affected by, among other things, net cash and working capital adjustments and changes in the exchange rate.
Nokian — which reports annual revenue from sales in Russia and Asia of around $378 million from the plant in Vsevolozhsk, Russia — was among the first tire makers to react to Russia's invasion of Ukraine, saying Feb. 25 it had moved production of some of its key lines out of its plant in Russia to plants in Finland and the U.S., while securing "transport capacity from Russia with existing and new service providers."
The plant in Vsevolzhsk is rated at close to 16 million tires per year.
Michelin declared in late June it intends to divest its assets in Russia.
Continental is altering production and business at both its tire and ContiTech operations in Russia.
Pirelli, Titan International and Yokohama Rubber Co. Ltd. have operations in Russia, along with some domestic tire makers.
European Rubber Journal contributed to this report.