Nokian Tyres’ board of directors recently decided to initiate a controlled exit from the Russian market. Due to the war in Ukraine and the subsequent, tightening sanctions it is no longer feasible nor sustainable for Nokian Tyres plc to continue operations in Russia, the company says. The exit preparations will start immediately, and the company will evaluate different options for the exit. The process will be done with due consideration to local employees and legislation, the company says.
As part of the process, Nokian Tyres will record impairments of approximately EUR 300 million (approx. $305 million) related to the Russian assets in the second quarter of 2022. These will be recorded as non-IFRS exclusions. Taking the impairments into account, the value of Nokian Tyres’ net assets in Russia and Belarus totalled approximately EUR 400 million (approx. $407 million) on May 31, 2022.
To secure supply of its products, Nokian Tyres says it has continued to increase capacity at its factories in Finland and in the U.S., and has decided to invest in completely new capacity in Europe. The company announced earlier in the year that it had stopped investments into the Russian facility and started transferring production of selected key product families from Russia to its other factories.
Nokian Tyres has been operating in Russia since 2005. In 2021, approximately 80% of the company’s passenger car tires were produced in Russia and the business area Russia and Asia represented approximately 20% of Nokian Tyres’ net sales.
Andrey Pantyukhov, who has been heading Nokian Tyres’ business area Russia and Asia, no longer is a member of Nokian Tyres’ management team.