By Liz White, ERJ staff
Nokia, Finland-Nokian Tyres plc announced 20 Feb that it is considering ways of strengthening its position in the rapidly growing Russian tyre market, but said its investigations are, â€œnot completed and no final decisions have been taken.â€
The statement came in response to press reports and stock market speculation that the Finnish tyre maker was to take a 10 percent stake in the Amtel group, Russia's second largest tyre maker.
Nokian later issued a further statement which said that, â€œno merger discussions, but a further development of cooperation,â€ with Amtel is being evaluated.
Nokian and Amtel's cooperative efforts currenrly include a 50:50 joint venture in tyre manufacturing in Russia. The terms of this venture, announced at the end of 2002, involve Nokian building a new 1.2-million-tyres a year plant on a greenfield site in Russia. Amtel would then be the lead partner in the JV, which plans to make two million passenger car and light truck tyres in 2004, at Amtel's plants in Kirov and Voronezh, in Russia and at Belaya Tserkov in the Ukraine.
Some $25-million investment in the Amtel plants would be needed, $10 million of this coming from Nokian, the firms said at the time.
Amtel, with $350-million turnover in 2003, plans a initial public share offering in 2005. The group employs 25 000, and operates four tyre plants, one rubber-goods manufacturing venture, a carbon black plant and a fibres unit in Russia and the Ukraine.
Amtel indicated in statement earlier this year that its JV with Nokian is an important part of its strategy in the Russian tyre sector. It aims to invest heavily in its plants and take an increasing share of the higher-performance tyre sector, where profit margins are much higher. Technology exchange with Nokian, an expert in highly efficienct production of high performance winter tyres, will be valuable in this strategy.
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Moscow Times story