The tragic and totally illegal Russian invasion of Ukraine has had a serious affect on the tyre industry throughout Europe with all leading international manufacturers closely monitoring the situation on a daily basis. SA Treads contacted many of these producers to get a reaction on how the conflict has damaged their current activities in both Ukraine and Russia.
Fortunately, no leading tyre manucturer owns or operates a tyre production facility in Ukraine but every single leading brand currently has factories in Russia. It seems one of the worst affected is Nokian who currently generate Euros 336 million sales from its plant in Vsevolozhsk, Russia. Whilst their facility near St Petersburg which produces 17 million tyres a year and
employs over 1600 people has activate contingency plans to lessen the financial and operational impacts including transferring production of selected key product lines from Russia to Finland and North America.
Also Bridgestone has announced it will b suspending its manufacturing activities in Russia until further notice with a company spokesman adding, “We have been deeply affected by the war in Ukraine which has impacted our own employees and partners and has prompted us to make this difficult decision.”
Whilst Continental has a plant in Kaluga, western Russia which has a listed capacity of 3 miilion annual units and employs around 1300 staff is also closely monitoring the situation and states that current plans include further implementing safety stock levels and using alternative suppliers of production products Meanwhile Michelin Group has suspended all its industrial manufacturing activity in Russia and stopped all exporting of tyres into Russia for the time being.
Michelin’s Davydovo factory near Moscow currently employs 750 people and produces passenger car tyres and retreaded truck tyres up to 2 million units a year mainly for the local Russian market. Yokohama also owns a plant in Lipetsk south of Moscow in partnership with Itochu with an estimated production level of around 8,000 tons of product units for both OE and the Aftermarket. and Pirelli operates two tyre plants in Kirov deep in central Russia and at Voronezh with annual production levels of 6 million units and 2.3 miilion units respectively. To date neither of these two major tyre manufacturers has issued statements regarding their current activities in Russia.
There are also four tyre producers based in Ukraine – CJSC Rosava, Dneproshina JSC, Eurotire Incorporated and Valsa Bila Tserkva with no information on whether they are
still operational or even destroyed by the Russian shelling.
Apart from the actual production of tyres, there is another equally important issue to contend with – a growing, severe materials shortage especially from Russia where logistic operations have virtually come to a standstill. It seems that Carbon Black is at the highest risk of becoming ‘unavailable’ if the conflict becomes a long term situation. With carbon black recognised as a difficult material to handle and process and prone to degrading when it travels.
If tyre manufacturers move away from using Russian carbon black then prices will fall (due to lack of demand) meaning prices elsewhere will inevitably rise. Russia currently exports over 750 kt of carbon black and a further 200kt is sourced from Ukraine so the industry will be forced to find up to one million tonnes of additional carbon black from other international suppliers.
Finally it is also widely considered that significant changes in future materials supply chains will become evident in the future. Assuming there is no swift conclusion to Russia’s invasion of
Ukraine the European tyre industry will seriously consider cancelling any business connection with Russian materials supply chains and look towards sourcing their Nokian tyre production plant in Russia. needs elsewhere in the world.