Nokian to build $650 million tire factory in Romania

NOKIA, Finland—Nokian Tyres P.L.C. has selected Romania as the site for a greenfield passenger tire factory that it plans to build to replace capacity lost due to its decision to exit Russia.

The new factory, valued at close to $650 million, will be built in Oradea in northwestern Romania, near the Hungarian border, Nokian said Nov. 1.

The location will allow Nokian to bolster its market presence, particularly in central Europe.

The planned facility will be the "first zero CO2 emission factory in the tire industry," Nokian said.

Construction is scheduled to begin in early 2023 and the first tires are estimated to be produced in the second half of 2024, the tire maker said.

Large-scale tire production is slated to start in early 2025, Nokian said, noting that the plant will have an annual capacity of 6 million units with "expansion potential in the future."

The site will also include major facilities for storage and distribution of tires.

"This investment is a significant strategic decision enabling our future growth," said Jukka Moisio, president and CEO.

"A world-class manufacturing facility in Europe is a key step… as we start building the new Nokian Tyres without Russia," he added.

The facility is expected to employ 500 people and will concentrate on the production of larger rim size passenger and SUV tires that will be primarily sold in the central European market.

"Central Europe is an important market for us, and the investment shows our commitment to the market," said Adrian Kaczmarczyk, senior vice president, supply operations.

Nokian said it selected the site after a thorough evaluation of over 40 locations and several factors, such as skilled workforce availability, logistical advantages and stable business environment,.

"It was clear that Oradea was the best choice for our new factory," Kaczmarczyk added.

In terms of the factory's zero CO2 emissions, Kaczmarczyk said the location can use green energy produced near the site.

In addition, Nokian is "critically evaluating" its production processes to find "the most sustainable ways to produce tires", Kaczmarczyk added.

Nokian announced in June that it was exiting from Russia due to the war on Ukraine and the subsequent, tightening sanctions on Moscow.

In October, the Finnish tire maker signed an agreement to sell its Russian operations to local buyer Tatneft.