Nokian Shifts Some Tire Production From Russian Factory
Nokian Tyres plc says it is the largest exporter of consumer goods in Russia, and in response to the crisis in neighboring Ukraine, the tiremaker is transferring production of select "key product lines" out of its Russian tire factory to plants in Finland and the U.S.
The tiremaker says those products are generally less important to the Russian market, and don't represent a significant total of overall volume. The shift of production lines at the plant in Vsevolozhsk had begun before the invasion of Ukraine, the company says.
In a Feb. 25 statement, Nokian says its operations continue to run normally, and the tire plant is operating at full capacity.
That plant produces tires that are delivered to more than 35 countries. Approximately 70% of the tires made in Russia are exported, Nokian says. The company has approximately 1,600 employees in Russia.
"We do not want to speculate on possible future sanctions or how the situation in general will evolve. We will announce any material direct impacts to Nokian Tyres as appropriate and in a timely manner."
In 2021 net sales in Nokian's combined Russia-Asia business unit totaled 336 million euros. During its report of first quarter 2021 financials, the company said 82% of its passenger tires were made in Russia — down from 85% for the first quarter of 2020.
Nokian has additionally withdrawn its earnings guidance for 2022 due to the conflict, noting that "the Russian military actions in Ukraine and the consequent sanctions have caused significant uncertainty related to the Russia, to the functionality of the Russian financial and payment system, and to the Russian ruble exchange rate."