Major Finnish tire manufacturer to leave Russia
Nokian Tires, a major Finnish manufacturer of tires for difficult climatic conditions, announced its withdrawal from the Russian market. The corresponding statement was published on the official website of the company. The largest production asset of the concern is located in Russia – a plant in Vsevolozhsk, Leningrad Region, which produces 14 million tires per year.
“The Board of Directors of Nokian Tires today decided on a controlled exit from the Russian market. Exit preparations will begin immediately and the company will evaluate various options. The process will be carried out taking into account the interests of local employees and the law,” the press release states.
Nokian Tires linked its decision to the Russian special operation and subsequent sanctions against the country. The organization said that “together with the entire international community we unreservedly condemn” the military actions in Ukraine. Nokian Tires decided to focus on development in other markets. “This was not an easy decision, given that we have more than 1,600 dedicated employees in Russia, whose experience we highly value, as well as long-standing relationships with customers and suppliers built over the past 17 years,” the message says.
As part of the exit, Nokian Tires will reflect an impairment of Russian assets of around EUR 300 million in the second quarter of 2022. Taking into account the impairment, the net asset value of Nokian Tires in Russia and Belarus as of May 31, 2022 will be about 400 million euros. The company said that Andrey Pantyukhov, who headed the Nokian Tires business in Russia and Asia, is no longer a member of the management team.
Nokian Tires has been operating in Russia since 2005. The company is engaged in the development and production of passenger car tires, tires for commercial and truck vehicles, as well as industrial tires for heavy equipment. In 2021, the concern produced about 80 percent of passenger car tires in Russia, and the Russia and Asia business line accounted for 20 percent of Nokian Tires’ net sales. The company also produces tires at factories in the Finnish city of Nokia and the US Dayton.