Nokian Buys US Distributor
Nokian Tyres has purchased US companies University Wholesalers Inc and University Wholesalers in order to strengthen its wholesale and logistics in the strategically important North American winter tyre markets. The purchase agreement was signed 28 of September 2005.
University Wholesalers operate as tyre wholesalers in the USA and they have had an important role as distributors of the Nokian Tyres brand. In 2004 the company’s net sales totalled at approximately $40 million, employing roughly 40 staff.
“The acquisition enables us to strengthen our sales organisation and to ensure the increase of our winter tyre sales in the North American Snow Belt area where we already have gained a strong foothold,” says Mr. Kim Gran, CEO and president of Nokian Tyres.
University Wholesalers’ net sales and profits from the last quarter of the year 2005 will be consolidated into Nokian Tyres’ figures.
Meanwhile Wall Street market watchers have congratulated Nokian on the completion of its “impressive” new Russian plant.
“Our plant visit to Russia confirmed that Nokian is able to transfer its production know-how, technology and product quality fuelling future growth as the expansion possibilities in Finland are coming to an end. Building the plant in less than a year increases our confidence that something similar can be done in Eastern Europe,” Deustche Bank analysts commented. The analysts said they were “amazed” to see that the plant is producing “high quality product with scrap levels in line with the 100-year-old Finnish plant was amazing to see.” The commitment and experience of the local all Russian management was also commended.
As a result of the trip Deutsch Bank added 1.50 euros to its target share price, expecting that talks in Eastern Europe will result in “value enhancing deal.”