NOKIA, Finland — Nokian Tyres P.L.C.'s expansion of heavy commercial tire capacity at its headquarters plant in Nokia won't be completed before 2023, more than a year later than originally expected.
The $80 million-plus project, designed to raise annual capacity 60% to 70 million pounds, was expected to reach full capacity by year-end 2021, according to Nokian's announcement of the project in 2017.
The expansion is part of Nokian Heavy Tyres' strategy to grow by 50% over the next three to five years, Salmi explained.
While the global heavy tires business is steadily growing above 4% per year, Nokian's target is to grow more than 10% per year, he added.
"There are four main growth drivers: distribution, more capacity, widening the product portfolio by 50%, and developing digital capabilities," Salmi said in his Capital Markets Day presentation.
The Heavy Tyres business, which includes heavy-duty truck, farm, foresty and industrial tires, represents roughly 15% of Nokian's annual sales.
Key growth markets are in Central Europe and North America, where the company aims to strengthen sales team and focus on new distribution customers.
Furthermore, Nokian intends to develop digital capabilities in its own processes, production, sales and logistics, as well as with customers directly with smart tires.
Salmi noted that Nokian is already strong in forestry tires and will aim to "go to segments where we have not been before, [and] target new customers," as part of its growth strategy.
Among other segments, agricultural tires will be one of the key growth targets, where Nokian expects to offer its "new technologies like very high flexion tires for the high horsepower tractors and tires for trailers."
In terms of expanding product portfolio Salmi said Nokian's recently commissioned heavy tires research and development center in Nokia will help the company meet customer demands and make new innovations.
"At the R&D center we have new machinery, which is our own design, so there is nothing else like it in the world," he added.