NOKIA, Finland—Nokian Tyres P.L.C. is planning to increase its capacity in Russia as well as setting up a new plant in an undisclosed location, according to CEO Ari Lehtoranta.
The executive disclosed these plans during a conference call discussing the firm's financials on May 8. Lehtoranta said that an extra line was going to be installed at the Russian plant in Vsevolozhsk, near Saint Petersburg.
He said that a third plant was likely to be installed in Eastern Europe to support the growth outside Russia and Scandinavia. He also mentioned North America and Asia as possible locations for the third plant.
Nokian's net sales decreased by 9.8 percent to $313.7 million in the first quarter of 2015, down from $347.8 million the previous year. Of this drop, some $32.5 million could be attributed to exchange rates, the Finnish tire-maker said.
Operating profit was also down by 29.4 percent to $53.9 million, from $76.3 million in the previous year.
The company said because of current exchange rates it expected that its sales and operating profit would decline slightly compared to 2014.
According to Lehtoranta, biggest negative impacts have come from currency valuations and delay in the start of the winter tire sales in Russia.
“While the whole market has gone down in Russia and CIS, we have been able to improve market share, volumes and margins in all other markets,” he said, adding that Nokian had improved in the area of expanding distribution and improved productivity.
“The competitiveness of our product portfolio continues to improve; we have launched new winter tires and all-weather tires for central Europe and North America.”