Nokian Tyres exits Chinese market
The official Chinese website of Nokian Tyres states that the Finnish tyre manufacturer is withdrawing from business in the Chinese market due to its “limited production capacity”.
The official Chinese website of Nokian Tyres states that the Finnish tyre manufacturer is withdrawing from business in the Chinese market due to its “limited production capacity”.
Nokian Tyres reports that its fourth-quarter 2022 net sales totalled 411.3 million euros, down 19.8 per cent from 512.6 million euros in October–December 2021. Operating profit was 13.5 million euros (Q4 2022: 88.0 million). Despite that, the company’s full-year 2022 net sales grew 3.6 per cent to 1,776.1 million euros (2021: 1,714.1 million euros). However, that wasn’t enough to prevent a full-year 2022 loss of 116.2 million euros (2021: 268.2 million euros profit). Executives put the fourth-quarter declines down to “lower passenger car tyre supply volumes…”, something that is a veiled reference to the fact that the company is wrestling with a serious passenger car tyre production gap.
Publishing its second-half 2022 report on 25 January, Solidium Oy (Nokian Tyres’ largest single shareholder) expressed confidence in the Finnish tyremaker’s work last year.
How the Russia-Ukraine war, the company’s low share price and other challenges make Nokian Tyres prime takeover material for a premium brand with the money and desire
The government of Romania has approved state aid of almost 100 million euros to Nokian Tyres PLC. The tyre maker intends to establish a new factory in Oradea, and the ad hoc regional state aid will finance the costs related to the factory’s establishment and address the financing gap related to this greenfield investment.
In a busy terminal, tyre stability and long service life are key factors in ensuring operational safety and efficiency for reach stackers, forklifts and log stackers. Nokian Tyres says it developed the HTS G2 harbour tyre family for this purpose, adding that this range’s “excellent stability, good grip and predictable service life has been impressing users for years.” The scope to impress has now grown with the arrival of a new HTS G2 family member. As of 17 January, the Nokian Tyres HTS G2 L5-S, a fitment intended for use on reach stacker front axles, is available in size 18.00-25.
The Association for Finnish Work, a Helsinki-based organisation tasked with raising the profile of Finnish-made products and ensuring their success, has granted Nokian Heavy Tyres the right to use its Key Flag symbol on tyres, wheels and retreading materials. The Key Flag denotes that these products are produced in Finland and contain at least 50% domestic content.
Nokian Tyres is investing approximately US$174 million to double tyre capacity at its factory in the USA and to expand warehousing capabilities at the Dayton, Tennessee site. This project will lead to the creation of 75 new jobs at the Dayton facility this year, and the expansion will also enable Nokian to add light truck tyres to the plant’s product mix in 2023.
Tatneft applied for Russian Federal Antimonopoly Service (FAS) approval for its plans to buy “a number of Russian subsidiaries of Finland’s Nokian Tyres” on 14 December.
From next year, Qingdao Sentury Tire will manufacture passenger car tyres under the Nokian brand name for the Central European market. Under a recently-signed contract manufacturing agreement between Nokian Tyres plc and Qingdao Sentury Tire Co., Ltd., production of a selected range of Nokian-designed and -tested tyres will commence in the first half of 2023, with products reaching the market in the second half of the year.
At the end of June, Nokian Tyres announced that it was executing a “controlled exit” from Russia. By August Russian news sources were reporting that Nokian was accepting “binding offers” for its Russian tyre plant up until the end of September. At the end of October, Nokian confirmed that it had agreed terms with Tatneft to sell its Russian tyre operations for roughly 400 million euros. More than a month later, Nokian Tyres spokespeople are speaking of “substantial uncertainties” relating to the Tatneft deal.
In addition to our live social media reporting and reporting the highlights of the 2022 Tyre Industry Conference in last month’s magazine, the December edition of Tyres & Accessories brings you curated coverage of the NTDA chairman and chief executive speeches as part of our “Looking back, Looking forward” review-of-the-year feature. With so much having taken place within the tyre market, the nation and the world as a whole, the two speeches offer a distinctly tyre distribution perspective on key issues relating to the associations growing membership, how it is developing relationships with other trade and charitable bodies and how it is investing in the future of the business via training initiatives.
Global tyre businesses have exited the Russian tyre business as a direct consequence of the Russian government’s decision to invade Ukraine. We all knew this was coming, following initial announcements from the likes of Michelin, Bridgestone and Nokian along those lines in the second quarter of 2022. However, the news that Nokian sold its much-lauded St. Petersburg operation to Tatneft at the end of October indicates that the exodus is underway. And that, in turn, means significant tyre production capacity within Russia has changed hands, something that has an inevitable impact on those departing, those remaining and the wider tyre business. In this column, we take a look at how Michelin, Bridgestone and Nokian have been negotiating their respective exits from Russia and ask what it might mean for the future.
Nokian Tyres’ is investing around 650 million euros in a new passenger car tyre factory in Romania. The new greenfield factory will be located in Oradea in the North-West of Romania, near the Hungarian border. The annual capacity of the factory will be 6 million tyres, with expansion potential for the future. According to an official statement, the site will also house a distribution facility for storage and distribution of tyres. Construction is scheduled to begin in early 2023 and the first tyres are estimated to be produced in the second half of 2024. Commercial tyre production is expected to start in early 2025.
Nokian Tyres plc has agreed to sell its Russian operations to Tatneft PJSC for approximately 400 million euros. The precise final purchase price will be affected by factors including net cash, working capital adjustment and foreign exchange rates. Confirming the news, Tatneft issued a one-paragraph statement saying the deal includes the plant in the city of Vsevolozhsk, in the region of Leningrad and that “the closing of the transaction and the purchase of assets is subject to a number of conditions, including obtaining approvals in accordance with Russian law.”
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