Finnish tyre maker Nokian to boost growth with new US$360 mn US plant

May 5, 2017

Nokian-TyresFinnish tyre manufacturer Nokian Tyres will be building its third factory in the US in order to boost growth outside of European market as its shares slid more than 6% as quarterly profit missed expectations.

The new greenfield factory will be located in Dayton (Rhea County), Tennessee in the US. The annual capacity of the factory will be 4 million tyres with an expansion potential in the future. The site will also house a distribution facility with a storage capacity of 600,000 tyres.

The total investment amount at this phase is approximately US$360 million. Construction is scheduled to begin in early 2018 and the first tyres are to be produced in 2020.

Petteri Walldén, Nokian Tyres’ Chairman of the Board of Directors, said the construction of the factory is a strategic decision to continue and enable the company’s growth path as total tyre sales in the coming years are expected to grow.

“And while the Dayton factory clearly enables us to serve our North American customers better and more efficiently, it also improves our production capabilities and customer service throughout our global operations,” he added.

Andrei Pantioukhov, Nokian Tyres’ Interim President and CEO, said that their decision to choose a North American site shows their commitment to their customers in one of their most important growth areas.

Last year, Nokian made 43% of its sales in the Nordics, 29% in other areas of Europe, 16% in Russia and Central Asia, and just 11% in North America.

The planned headcount of the factory is about 400 employees. The Dayton factory will concentrate on the production of passenger, SUV and light truck tyres that are sold exclusively or primarily in the North American market.

Nokian Tyres has a large production plant in the Russian town of Vsevolozhsk and a smaller one in Nokia, Finland. Centralised product development is carried out, and prototypes and test runs are completed at the company’s headquarters in Nokia.

The Nokia factory manufactures car tyres, heavy-duty tyres, and retreading materials for truck tyres. The combined production capacity in Nokia and Russia is more than 20 million tyres.

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