Nokian Tires Says It Prevents Use of Russian Factory for War | Investment News

HELSINKI (Reuters) – Finland’s Nokian Tires still runs its Russian plant and as long as it remains in company hands, production will not support Russia’s war in Ukraine, CEO Jukka Moisio told Reuters in an interview.

The company went from record profit to survival mode in February when Russia, host of its largest production plant, attacked Ukraine.

Today, the tire maker is torn between complying with sanctions and manufacturing tires at its plant in Vsevolozhsk, a three-hour drive from the Finnish border. Before the war caused production difficulties, the plant produced 80% of Nokian’s passenger car tires.

Nokian has been criticized for its decision to stay in Russia by protesters outside its Finnish factory as well as by Olga Dibrova, Ukraine’s ambassador to Finland, who in March called on the tire maker to cut all connections with Russia.

Meanwhile, Russia has threatened to seize factories from companies that say they will shut down production.

“Different kinds of local legal issues, like talking about bankruptcy, can arise if we don’t execute it at a reasonable level,” Moisio said, adding that as long as the plant remains in Nokian’s hands, the company would insure its tires. were “not made for war”.

However, Moisio said he now attends emergency meetings almost daily as the company sketches out different scenarios for how the situation in Russia might unfold.

“We are preparing for anything,” Moisio said, even for nationalizing the factory.

“If that were to happen, I don’t think there’s much we could do about it, but to make sure the company that’s left is strong, has money and can do what it needs to do,” said Moisio.

While a transition period for EU sanctions allows the tire maker to continue exporting tires from Russia until mid-July, finding transportation has become trickier and more expensive, according to the company. ‘business.

“In practice, we lack all the key raw materials that come from all over the world, from outside Russia,” Moisio said, mentioning rubber, soot and textiles in particular.

After July, all tires will have to be produced at the company’s factories in Finland and the United States, but that won’t be enough to sustain the company’s pre-war growth rate, the analyst told Reuters. by Indéres Joonas Korkiakoski.

That is why the board of directors and the management of the company are looking for new production capacities in Eastern Europe. However, that will take time, Korkiakoski said, noting Nokian’s experience installing in Dayton in the US.

“If we look at Dayton, it will take about 3 to 4 years from the investment decision to reasonable production,” he said.

(Reporting by Essi Lehto; Editing by Edmund Blair and Bradley Perrett)

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