Nokian continues Russian operations to maintain control of assets

NOKIA, Finland — Nokian Tyres, P.L.C. may be shifting tire production out of Russia, but don't expect the tire maker to halt operations all together.

Nokian will continue operating its passenger tire plant in Vsevolozhsk, Russia, while "actively looking for additional capacity" elsewhere, stating it's better for the factory to remain in its control amid Russian President Vladimir Putin's threats of nationalization.

"By continuing to operate the passenger car tire factory in Russia we want to make sure that the factory is operated and controlled by Nokian Tyres also in the future," the tire maker said.

Nokian was among the first companies to react to the Russia's invasion of Ukraine, saying in late February that it was implementing previous plans to mitigate potential disruptions by moving main production lines from Russia to Finland and the U.S.

"We no longer invest into the Russian production," the Finnish tire maker emphasized in its March 22 statement, adding it is accelerating plans to increase production capacity at its factories in Finland and the U.S.

All tires sold in the Nordic countries in the future will be produced in Nokia, and all tires sold in North America will be produced in Dayton, Tenn., as well as in Nokia, the company said, saying it aims to become "geographically more diversified in its manufacturing operations."

All of Nokian's heavy tires are designed and manufactured in Finland. Tires for trucks and buses are designed in Finland and produced under contract elsewhere in the European Union.

The company said it did not accept orders for heavy tires from Russia.

On the ongoing war in Ukraine, Nokian said it has followed the situation "with great sadness," expressing hope for "a quick diplomatic solution to this tragedy."

"Over half of our Ukrainian employees are male and cannot leave the country, but we assist them in any way possible given the current situation," the company said, adding that it had donated to UNICEF to help children in the war zone of Ukraine.

The company also addressed its Sunday "spotlight in the media regarding an analyst call."

According to a Reuters report, Finnish media had reported that Nokian "seemed to tell analysts in a call last week that it would seek to win market share from rivals that are exiting Russia, such as Michelin, Continental and Bridgestone, or those curtailing activities there, such as Pirelli."

Nokian denied this, stating, "Correction to the media have been made."

The company's 1,600-employee plant near St. Petersburg, Russia, has capacity to produce 17 million units per year of radial passenger car and light truck tires. The company did not say how much the facility's capacity has been impacted since Russia's attack on Ukraine, nor did it say what its current staffing levels are.

European Rubber Journal contributed to this report.