Nokian Looks for Additional Capacity Amid Russian War in Ukraine

Nokian Looks for Additional Capacity Amid Russian War in Ukraine

With a manufacturing plant in Russia and Ukrainian employees at war, Nokian Tyres has issued frequent updates on how the Russian invasion in Ukraine is impacting its business. This past month, Nokian issued a statement saying it is looking to diversify its geographic footprint in its manufacturing operations and is actively looking for additional manufacturing capacity.

In the update issued March 22, Nokian says, “We hope for a quick diplomatic solution to this tragedy,” as it maintains daily contact with its Ukrainian team. “Over half of our Ukrainian employees are male and cannot leave the country, but we assist them in any way possible given the current situation. In addition, Nokian Tyres has made a donation to UNICEF to help the children in the war zone in Ukraine.”

The company also said it is using “all possibilities” to accelerate the increase of capacity in its factories in Finland and in the U.S. Earlier in the month, Nokian said all tires sold in the Nordic countries in the future will be produced in Nokia, Finland, and all tires sold in North America in the future will be produced in Dayton, Tennessee and in Nokia, Finland. All Nokian Tyres’ heavy tires are designed and manufactured in Finland, and tires for trucks and buses are designed in Finland and produced in the EU. Nokian said it is not accepting orders for heavy tires from Russia.

However, Nokian said by continuing to operate its passenger car tire factory in Russia, the company wants to ensure that the factory is operated and controlled by Nokian Tyres in the future. “We no longer invest into the Russian production,” the company said.

Nokian says, “We do not want to speculate on how the situation in general will evolve. We will announce any material direct impacts to Nokian Tyres as appropriate and in a timely manner. We continue to assess the situation and are prepared for rapid responses when needed.”

Nokian added in a statement issued March 8 that its crisis management team meets daily, and it is prepared for different scenarios. The company is also monitoring sanctions and potential counter-sanctions, and it has activated its contingency plans to mitigate any financial and operational impacts to its business.

“For example, we are shipping tires closer to our customers, securing the raw material supply to our factories, transferring production of selected key product lines from Russia to Finland and to the U.S., and securing transport capacity from Russia with existing and new service providers,” Nokian says.

Currently, Nokian said its Russian operations are impacted by transportation capacity and availability. Lead times to customers have also increased, the company said. “The operations can be further impacted by raw material supply. We have been able to fulfill the customer orders despite the supply chain challenges, and continue to do our best to serve our customers and to deliver as agreed with them,” Nokian says.

“For us the safety of our employees is number one priority. We will do everything we can to support our Nokian Tyres team in this situation. We have been operating in Ukraine since 2006, and during those years have built many long-lasting relationships with Ukrainian colleagues and customers,” the company said in its March 8 update. “We have some 20 employees in Ukraine. We are in daily contact with our Ukrainian team, and as a first priority, we have taken measures to secure their and their families’ safety as best as we can and we will continue our help to them, both on a personal level and as an employer.”

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