28 Jun 2022 18:34

Nokian Tyres initiating controlled exit from Russia

ST. PETERSBURG. June 28 (Interfax) - Nokian Tyres has decided to initiate a controlled exit from the Russian market due to the Ukraine situation, the Finnish tyre manufacturer said in a statement.

"After a thorough consideration and assessment of various options, we have decided to rebuild Nokian Tyres without a presence in Russia and focus on growth opportunities in our other core markets. This was not an easy decision given we have over 1,600 dedicated employees in Russia whose expertise we highly value as well as many long-standing customer and supplier relations built over the past 17 years," said Jukka Moisio, President and CEO of Nokian Tyres.

As part of the process, Nokian Tyres will record impairments of approximately 300 million euros related to the Russian assets in the second quarter of 2022. These will be recorded as non-IFRS exclusions. Taking the impairments into account, the value of Nokian Tyres' net assets in Russia and Belarus totaled approximately 400 million euros on May 31, 2022.

"The exit preparations will start immediately, and the company will evaluate different options for the exit. The process will be done with due consideration to local employees and legislation," the company said.

It also said that as of June 28, Andrey Pantyukhov, who has been heading Nokian Tyres' business area Russia and Asia, was no longer a member of Nokian Tyres' management team.

Nokian Tyres said on March 22 that it was no longer investing in tyre production in Russia, however the company's tyre factory near Vsevolozhsk in the Leningrad region would continue to operate.

The plant in Russia opened in September 2005 and has 14 production lines capable of producing 17 million tires per year. In 2021, approximately 80% of the company's passenger car tires were produced in Russia and the business area Russia and Asia represented approximately 20% of Nokian Tyres' net sales.

All Nokian Tyres' heavy tires are designed and manufactured in Finland. Tires for trucks and buses are designed in Finland and produced in the EU.