Nokian Tyres’ Board of Directors has decided to initiate a controlled exit from the Russian market. Due to the war in Ukraine and the subsequent, tightening sanctions it is no longer feasible nor sustainable for Nokian Tyres plc to continue operations in Russia. The exit preparations will start immediately, and the company will evaluate different options for the exit. The process will be done with due consideration to local employees and legislation.
As part of the process, Nokian Tyres will record impairments of approximately EUR 300 million related to the Russian assets in the second quarter of 2022. These will be recorded as non-IFRS exclusions. Taking the impairments into account, the value of Nokian Tyres’ net assets in Russia and Belarus totalled approximately EUR 400 million on May 31, 2022.
“For the past months, we have witnessed shocking events in Ukraine. We have followed the situation with great sadness and we, along with the whole international community, unequivocally condemn the war, which has caused unspeakable suffering to so many”, says Jukka Moisio, President and CEO of Nokian Tyres. “Our short-term focus has been on adapting to the fast-changing, highly uncertain operating environment, and maintaining control of our 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. This was not an easy decision given we have over 1,600 dedicated employees in Russia whose expertise we highly value as well as many long-standing customer and supplier relations built over the past 17 years”, Moisio continues.
To secure supply of its products, Nokian Tyres has continued to increase capacity at its factories in Finland and in the US, and has decided to invest in completely new capacity in Europe. The company announced earlier in the year that it had stopped investments into the Russian facility and started transferring production of selected key product families from Russia to its other factories.
Nokian Tyres has been operating in Russia since 2005. In 2021, approximately 80% of the company’s passenger car tires were produced in Russia and the business area Russia and Asia represented approximately 20% of Nokian Tyres’ net sales.