COLCHESTER, Vt.—The modest building is tucked strategically at the end of a winding access road, lined with brush and pine trees, a staple of the picturesque Vermont landscape.
Visitors must circle the 200,000-sq.-ft. building to reach the front entrance, where green signs that read "Nokian Tyres" and "safety" dominate the view.
The college town of Burlington, Vt., lies a short drive away, and 90 miles to the north is Montreal, the capital of Quebec, a province where winter tires are mandatory.
The unassuming North American headquarters of Nokian Tyres P.L.C. seem to fit the company as it stands today perfectly: A small fish in an unforgiving ocean of tire makers, earning its small market share—less than 1 percent in North America—mainly on the strength of its lineup of winter tires and ultra-high-performance offerings.
Compare that with the Nordic countries of Finland, Sweden and Norway, where the Nokia, Finland-based tire maker dominates the market, with brand awareness eclipsing 80 percent.
If executives at the North American operations realize the success they are shooting for—company executives have said they want to double North American sales in five years—Nokian soon could find itself swimming with the sharks.
This past May, Nokian—ranked No. 19 in Rubber & Plastics News' 2017 Global Tire Rankings with 2016 tire sales of $1.38 billion—took one of the first steps in growing its North American business, announcing plans to build a plant in the U.S., a $360 million, 830,000-sq.-ft. project in Dayton, Tenn.
The plant, Nokian's third worldwide, will concentrate on producing passenger, SUV and light truck tires specifically for North American consumers. It is scheduled to come online in 2020 with an eventual capacity of 4 million tires per year and 400 employees.
Site preparation has begun, with site leveling set to start within 30 days. The official groundbreaking ceremony is Sept. 20.
The state of Tennessee recently approved a $28.4 million grant that will go toward plant infrastructure, site development, equipment, construction and related work, according to terms of the grant. The location is large enough to accommodate a tripling of the planned facility's size.
"We have been focusing on this for a couple of years, but definitely this is a big step for us, taking us to the next level," Tommi Heinonen, head of North America, said with a smile, sitting in the conference room at the Nokian headquarters. "Having local manufacturing is a big thing."
Eyes on America
Nokian had considered building a plant in Central Europe to strengthen that market, another target area for growth, but the firm's board of directors chose instead to bolster its North American presence by constructing a factory closer to the new customers it so eagerly wants to attract.
Not only can winter tires be stored in a 600,000-tire warehouse that will be built alongside the Tennessee plant, but also the all-season and light truck tires specific to the North American market can be produced and shipped to customers faster and more economically, with a "Made in America" stamp so crucial to many buyers.