Nokian planning to invest in new capacity in Europe

Nokia, Finland – Nokian Tyres plc is expediting its plans to invest in new production capacity in Europe to address the high uncertainty caused by the Russian war on Ukraine.

In a statement 30 March, the Finnish tire maker said the company’s board of directors will cut dividend payment in the upcoming annual general meeting 28 April to support the new capacity in Europe.

As a result, the board of directors will propose that a dividend of €0.55 per share be paid from the financial year January 1–December 31, 2021, which will amount to €76.1 million in total.

The board had earlier proposed to pay €1.32 per share payable in two instalments.

The tire maker also noted that it continues to increase capacity at its manufacturing factories in Nokian, Finland and the Dayton, Tennessee.

Nokian's Russian operations have been under pressure since the invasion of Ukraine by Moscow on 24 Feb.

The company announced 22 March that it continues to operates its passenger car tire production plant in Vsevolozhsk, Russia but is ‘actively looking for additional capacity’ elsewhere.

By continuing to operate the Russian plant, Nokian said it wanted "to make sure that the factory is operated and controlled by Nokian Tyres also in the future.

“We no longer invest into the Russian production,” the Finnish tire maker emphasised in the 22 March statement.

Nokian generated €336 million, about 20% of group sales, from its tire production operations in Russia last year.

The company's 1,600-employee plant near Saint Petersburg has capacity to produce 17 million units/year of radial passenger car and light truck tires.