Nokian eyes third plant in Europe

ERJ staff report (TB)

Nokia, Finland – Nokian Tyres plans to add a third factory in Europe, most likely in eastern Europe, to meet the expected rising demand for its products, reports Bruce Davis of our US-based sister publication Tire Business.

A top executive said this recently without disclosing the company's timetable for its final decision.

Speaking to a delegation of U.S. and Canadian tire dealership representatives at Nokian's headquarters plant in Nokia recently, Hannu Teininen, vice president of sales and logistics, said company management has approved funding for a third plant, saying it will be built "whenever it is needed."

Building a plant would take about two years from committing to it to initial production, Mr. Teininen said.

For now, Nokian continues to invest heavily in its eight-year-old factory complex in Vsevolozhsk, Russia, where annual manufacturing capacity is expected to reach 15.5 million units this year with the installation of a 13th manufacturing line.

Nokian has invested $915 million in Vsevolozhsk in the past eight years and has budgeted more than $100 million in 2013 for the plant.

The company still builds 4 million to 5 million car tires a year at the Nokia plant, but that factory—which first opened in 1904 to make rubber boots and other rubber products—is landlocked and saddled with the century-old layout and design. Bicycle tire production began in 1925 and car tires in 1932.

Among the specific car tire products built there are the run-flat versions of several product lines. Nokian also builds truck, forestry and other heavy-duty OTR tires at that plant, where Nokian invested $40 million in 2011-12 in modernisation measures.