Next year, Finnish tyre manufacturer’s Nokian Tyres factory in Vsevolzhsk will raise the number of production lines up to 14, increasing capacity by 1.5 mln tyres per year. Russian new car market decline accompanied with the tyre market decline do not come in conflict with expansion plans: three fourths of output is to be exported. At the end of 3Q, the number of employees at Vsevolzhsk factory (1326) is just marginally below the number of employees at the Finnish division of the Group (1626). Moreover, the number of employees at the Leningrad Region factory increased by 26 employees compared to last year, while the number of employees at the Finnish facility decreased by 169 employees. The exact figures for investments in Nokian Tyres LLC have not been announced, but it was mentioned that imported equipment will cost a few tens of millions (in €).
Its capacity will expand by 10% to 17 million tires by 2017
Nokian Tyres is planning to invest approximately EUR 100 million in the development of its tire factory in the Leningrad Region in 2015, and the same amount of investments is scheduled for 2016, TASS and Interfax quoted Andrey Pantyukhov, CEO of Nokian Tyres Russia, as saying. According to President of Nokian Tyres Ari Lehtoranta, it is planned to further promote manufacturing automation, IT infrastructure, and development of new products. In 2016–2017, it is also planned to build a new finished products warehouse and install a new, fourteenth, manufacturing line with an annual capacity of 1.5 million tires, a spokesperson for the company told Vedomosti. The current annual capacity of the factory is 15.5 million units. The factory is operating almost at its design capacity; however, according to Pantyukhov, new facilities will not be necessary prior to 2017.
The Russian factory accounts for up to 80% of passenger-car tires manufactured by Nokian Tyres. The plant became operational in 2005, and some EUR 800 million have already been invested in construction and development.
Pirelli, which manufactures tires in Russia through its joint venture with Rostec, is also planning to increase export supplies to 2–3 million units annually from 500,000 units currently. “However, the domestic market is our priority. Export deliveries account for approximately 25% of our output,” a spokesperson for the company said. The combined annual capacity of the manufacturing facilities is more than 7 million units. Investments by the Italian company are estimated in excess of EUR 400 million. “The modernization and development process at the Pirelli production sites in Russia is ongoing, and we intend to complete our investment projects despite the difficult economic situation,” the spokesperson said.
German Continental, which operates a manufacturing facility in Kaluga, also has plans to expand export supplies: in 2015, it began delivering tires to Belarus, Ukraine, Germany, and France. The annual capacity of the Russian plant is 4 million units (investments have totaled EUR 240 million); however, the factory does not operate it its design capacity, and this year’s output is projected at 2 million units, a representative of the company said.
Finland-based Nokian Tyres is to invest $1 billion to raise the production capacity of its car tyre plant in Vsevolozhsk to 17 million tyres per year by 2015, RBC Daily reported.
In the first quarter of 2013, the plant, which has been operating since 2005, commissioned a 12th production line and boosted its total capacity to 14 million tyres. In the second half of 2013, the plant is scheduled to put into operation a 13th line and raise the capacity to 15 million tons.
Proximity to Nokian's headquarters in Finland and low production costs, which are 10-20 per cent lower than in Western Europe, were the main factors for building the plant. It currently supplies tyres to 43 countries, not only to Russia, but Finland, the US, Canada and China.
Nokian Tyres Oy
Company's website: www.nokiantyres.com
T: +358 10 401 7000
Contact: Ari Lehtoranta, President and CEO
Nokia Tyres manufactures and markets tires for passenger cars and SUVs, commercial vehicles, trucks, and industrial machinery. Nokian Tyres incorporates the Vianor chain of tire centers, which sells Nokian tires in key markets.