Pirelli & C. Spa has reported a strong set of first quarter 2022 results which show revenues and pre-tax profits (adjusted EBIT) were up 22.2 per cent and 35.4 per cent respectively despite considerable turmoil related to the war in Ukraine and the resultant sanctions against Russia, where Pirelli runs two tyre factories. However, the tyre manufacturer has also revised down full-year estimates due to the same “geopolitical tensions”.
Following the withdrawal of its 2022 guidance on 28 February, Nokian Tyres has commented that it expects net sales and segments operating profit in 2022 to “decrease significantly compared to 2021.” The tyre manufacturer is the most acutely affected by the Ukraine-Russia war, as analysis previously published on Tyrepress shows.
Together with its employees, VMI has raised 160,00 euros through a fundraising action and has donated this to Giro 555, the Dutch part of the global Emergency Appeals Alliance. The donation will be used to provide practical support to the Ukrainian people and those affected by the conflict.
At the start of the year this column predicted a positive 2022 for the tyre business on the basis that we are better prepared for the unknown because of the adaptions made during the last few pandemic years. I still believe that. But my thesis is being tested by the implications of the now month-long war in Ukraine. All our expectations are being tested. For example, never before have I received an email which switches from normal editorial matters to “our country has been invaded” from one line to the next.
The first month of Russia’s invasion of Ukraine has already revealed several consequences for mobility and the global tyre industry, as Tyrepress’s continuing coverage of the situation has shown. The resultant sanctions imposed on Russia by an international alliance and the response of multinational companies, at least 450 of which had scaled back their business in the country as of the publication of this article, will send reverberations around global economies. The tyre industry faces impacts on several fronts – higher fuel prices and further interruption to logistics chains and materials supply will have knock-on consequences for tyre sales that will unfold over the coming months. At nearly a month after the conflict began, tyre business analyst Astutus Research examines the immediate consequences for tyre manufacturing in Russia, as well as its neighbours Ukraine and Belarus. This analysis looks at the impact of events on the global manufacturers whose plants were collectively responsible for around 70 per cent of Russia’s passenger car and light truck (PCLT) output. For more Astutus Research analysis and forecasts for the global tyre business, see the report series ‘Beyond Covid-19’ in Tyrepress’s Report Shop.
Tyre recycling and product recovery specialists Scandinavian Enviro Systems (Enviro) is has noted “a sharp increase of interest in purchasing the carbon black and oil that Enviro recovers from end-of-life tyres” since the Russian invasion of Ukraine on 24 February 2022. Interest has been observed “among old and new customers”, but the company has not commented on what this means in terms of specific orders.
Canadian Tire Corporation (CTC) announced it will temporarily pause its Helly Hansen operations in Russia, which include its retail stores, eCommerce site and product shipments in a 4 March 2022 statement, which said: “The conflict between Russia and Ukraine is tragic and deeply concerning and CTC’s priority will continue to be protecting the safety and well-being of its employees. During this temporary pause in operations, store employees will continue to be paid and supported and the company will continue to honour its commercial obligations.”
The crisis in Ukraine has impacted upon Nokian Tyres’ business in multiple ways, and the company has now activated contingency plans to “mitigate the financial and operational impacts” upon business. At the same time, it has donated 100,000 euros to UNICEF to help children in the war zone.
As part of our ongoing coverage of the impact of the Russia-Ukraine war, Tyres & Accessories asked one of the world’s leading tyremakers, Bridgestone, a series of questions about its operations in Russia and the Ukraine.
Tyres and poor vehicle maintenance could be contributing to the stalling Russian military effort north of Kyiv. The UK defence ministry has reported that Russia’s 40-mile military convoy in northern Ukraine has made no significant progress for several days, stalled on the roads leading into the Ukranian capital, Kyiv, and hampered by equipment malfunctions and improvised roadblocks. So why does the Russian military not simply forge off-road routes to aid progress? According to military history blogger and retired US Department of Defense civil servant Trent Telenko, the combination of Ukraine’s mud season, or “Rasputitsa” and the poor state of Russian military vehicles’ tyres make such moves extremely difficult to make.
Despite the war in neighbouring Ukraine and the resulting sanctions imposed on Russia by the international community, as of 2 March 2022, company representatives told Tyres & Accessories the Yokohama’s Russian tyre manufacturing operation in Lipetsk, 500 kilometres south of Moscow, is running as normal.
Koelnmesse, the organisers of The Tire Cologne exhibitiom, are suspending cooperation with Russian companies in support of the people of Ukraine. Writing in statement published online on 1 March 2022, Gerald Baese, CEO of Koelnmesse GmbH said:
The team at Borbet in Germany’s Hochsauerland region are making their own contribution to help people in Ukraine. The wheel manufacturer, which is headquartered in Hochsauerland and operates two further facilities there, says a van filled with “care packages” left one of the sites on Monday and is driving the approximately 800 miles to the embattled country.
Goodyear has accounted for all its associates in Ukraine and “continues to monitor the situation and support associates and customers”. Writing in a statement sent in answer to Tyres & Accessories questions on the matter, a company spokesperson outlined Goodyear’s current position: