Finland’s Nokian Tyres joins peer Michelin in exiting Russia
Nokian Tyres, a Finnish tire manufacturer, will cease investment in tyre production in Russia. However, its factory will continue to operate in Vsevolozhsk, Leningrad region. The plant was inaugurated in September 2005 and has fourteen production lines capable of producing 17 million tires per year. Last year, 80% of Nokian’s passenger car tires were produced in Russia. The business area in Russia and Asia contributed around 20% to the total net sales of the Finnish company. However, it will cease operations in the Russian market in 2022.
The move comes as the European Union imposed further sanctions against Russia, which have led to the suspension of tire imports. Meanwhile, Nokian’s exit from the country may lead to write-downs of EUR300 million in the second quarter. However, Nokian is unlikely to suffer the same fate, as it is only one of three Western tyre manufacturers to quit the country. Michelin, meanwhile, is one of the few companies which has successfully offset its higher raw materials costs through a centralized supply chain.
As an ally of the European Union, Russia has been an important market for Nokian for decades. However, in recent years, the Russian invasion of Ukraine has fueled interest in joining NATO. Since then, however, Moscow has repeatedly warned the country against joining NATO. With this in mind, it is possible that the company will continue to export some products and cease its operations in the country.
Following the Russian invasion of Ukraine, Nokian Tyres has also decided to initiate a controlled exit from the Russian market. In its announcement, Nokian Tyres will evaluate various options before launching a complete shutdown of operations. While the company’s plan for an exit will have some implications for its Russian suppliers, it will consider the local legislation and workers when deciding which to proceed.
ING is also halting new business in Russia. Despite this, it will continue to support existing clients. NBC Sports has banned Russia from certain sporting events following an IOC recommendation. The IOC has also banned Russia from some major events, including the Winter Olympics. In Moscow, Lavrov will meet the head of the Red Cross for talks on Ukraine. The two will discuss the establishment of an office near the Russia-Ukraine border.