Nokian Tyres Leaves Russia and Invests in Romania

The Finnish tire manufacturer Nokian Tyres announced at the end of October 2022 that the company is selling its business operations in Russia to Tatneft PJSC for a debt-free price of EUR 400 million. Nokian Tires entered the Russian market in 2005 and by 2021, 80 percent of the company’s passenger car tires were manufactured in Russia. The markets in Asia and Russia accounted for 20 percent of turnover before Russia’s war against Ukraine.

Despite the losses caused by the retreat, Nokian Tyres has a solvency ratio of just over 60 percent, which makes it possible to invest in new production and facilities. The company announced in mid-November 2022 the decision to build a factory for the production of passenger car tires in Romania. In total, Nokian Tyres invests around 650 million euros in the factory and the estimated production volume is six million tires per year.

The factory in Romania is ready for commercial production in early 2025. Nokian Tyres is increasing its production in Finland and the USA to compensate for the loss after the company sold its operations in Russia. According to CEO Jukka Moisio, Nokian Tyres chose to build the factory in Romania because the country is close to the markets in Central Europe.

The winter tires account for 62 percent of Nokian Tyres’ sales in 2021. Since 1986, the company has operated the world’s largest test center for winter tires in Ivalo in northern Finland. The test center is 700 hectares in size and the 30 test tracks have a total length of 100 kilometers. The temperature can vary by up to 40 degrees during a day and the number of days with minus degrees amounts to around 200 per year. That is the reason why the test center was named White Hell.

“Just over half of Nokian Tyres’ budget for product development is used to test the products, and the most important facility for testing winter tires is White Hell,” says Matti Suuripää, who is the head of the test center in Ivalo.

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