Nokian to bring forward investments in Russian tyre factory

ERJ staff report (DS)

Nokia, Finland -- In a presentation to investors, Kim Gran, president and CEO of Nokian Tyres plc said that, while production volume grew as planned, lack of capacity had limited sales growth, especially in Russia. Gran said the company is likely to start installing a seventh production line at its tyre factory in Vsevolozhsk, Russia earlier than planned.

Currently Nokian has four lines running in three shifts at its Russian unit. Two more production lines are currently being installed and are scheduled to be on stream in the first half of this year. Nokian has always said it expects to increase capacity in line with demand. Strong demand will lead it to bring forward installation of the seventh and subsequent lines. Nokian now says it will increase capacity to 10 million tyres by the year 2011.

Ground preparation works for the 22 000 m² Russian mixing unit has already begun. The plan is to install the initial capacity during 2008 and add two more lines in 2009.

Nokian says it generated sales of Euro 340.3 million in Russia and other CIS counries in 2007, which it expects to rise to €400 million in 2009. It claims to be the clear leader in the region, with more than 30% market share in premium car winter tyres.