Nokian initiates “controlled exit” from Russia

Nokia, Finland – Nokian Tyres has announced the intention to discontinue its Russian operations as the war on Ukraine and its subsequent sanctions make it no longer “feasible or sustainable” to continue activities in the country.

In a statement 28 June, the Finnish tire maker said preparations for a “controlled exit” will start immediately, and the company will evaluate different options for the move.

“The process will be done with due consideration to local employees and legislation,” it added.

As part of the process, Nokian Tyres will record impairments of approximately €300 million related to the Russian assets in the second quarter of 2022.

Taking the impairments into account, the value of Nokian Tyres’ net assets in Russia and Belarus totalled approximately €400 million as of 31 May.

“For the past months, we have witnessed shocking events in Ukraine… and we unequivocally condemn the war, which has caused unspeakable suffering to so many”, said Jukka Moisio, president and CEO.

Nokian’s short-term focus, Moisio went on to say, has been on adapting to “the fast-changing, highly uncertain operating environment” and maintaining control of operations in Russia.

“After a thorough consideration and assessment of various options, we have decided to rebuild Nokian Tyres without a presence in Russia and focus on growth opportunities in our other core markets,” he added.

Nokian Tyres has been operating in Russia since 2005. Last  year, 80% of the company’s passenger car tires were produced in Vsevolozhsk, Russia and the Russia-Asia business area represented 20% of the company’s net sales.

Andrey Pantyukhov, who has been heading Nokian’s Russia and Asia operations, is no longer is a member of the company’s management team.