Nokian says Romania tire factory planning ongoing

Nokia, Finland – Nokian Tyres plc has reiterated that the company's ongoing process to exit Russia is not impacting its plans to build a new €650 million tire factory in Romania.

“Right now, we have various actions ongoing, including land purchases, permitting processes and indeed we ordered the first production equipment in late 2022,” said president and CEO Jukka Moisio.

First tires will be rolling out in the second half of 2024 and the company aims for commercial production in 2025, he added during Nokian’s annual results presentation 7 Feb.

Financing will be covered by Nokian’s own cash-flow, said Moisio, stressing that the company would not be looking to raise new equity to fund the project.

Nokian unveiled plans to build the new factory in Romania in last November, following its decision to exit Russia and sell its operations to local energy and petrochemicals major Tatneft.

The process, however, “has substantial uncertainties” related to timing, terms & conditions and closing of the transaction, Nokian said in October.

“And the situation definitely has not got any better [since October],” noted Teemu Kangas-Kärki, Nokian’s CFO during the presentation

“It is a demanding topic and environment… therefore, I cannot comment on that unfortunately,” he added.

Nokian, however, reiterated that the two processes are completely separate and will not disrupt one-another.

“The rebuild of the company in terms of building the new factory in Romania and advancing with the capacity rebuild [in the US and Finland] is not dependent on the Russian exit,” said Moisio.