Nokian Tyres recently shared plans to invest EUR650 million in a new passenger car tyre factory in Romania. With a capacity of 6 million tyres/year, the Romanian plant is set to replace some of the lost output from Nokian’s now divested Russian operation which had the capacity to produce 17 million passenger car tyres/year.
Nokian had earlier said it is selling its Russian operations to local oil producer Tatneft PJSC for EUR400 million, due to the invasion of Ukraine by Russia.
The company’s operating profits were down 54% year-on-year in the third quarter to EUR40 million.
Nokian is also expanding production in Finland and the US as well as outsourcing manufacturing to Asia but that will not be enough to cover lost capacity before the new plant is ready, its head of supply operations Adrian Kaczmarczyk told Reuters.
“We will focus on certain product families and not produce everything that was produced in Russia,” Kaczmarczyk said.
Nokian said labour cost, access to skilled workers, supportive government and proximity to key markets in central Europe were among the drivers behind its decision to choose to build a plant in Oradea in northwestern Romania.
The factory, which Nokian aims to make the industry’s first zero CO2 emissions plant, will employ 500 people.
With first tyres estimated to be produced in the second half of 2024, commercial production is expected to start by early-2025 and reach full speed by early 2027, the company said.