Nokian reports successful year, touts 'good news ahead'

DAYTON, Tenn.—Despite a war that cause supply disruptions abroad, Nokian Tyres P.L.C. is touting its accomplishments in 2022, while promising "more good news ahead" in 2023.

The U.S. subsidiary of the Nokia, Finland-based tire maker said the continuing expansion of its factory in Dayton, coupled with new products tailored to the North American market, drove that success.

And Tommi Heinonen, vice president of sales in North America, credits the tire maker's partners for helping fuel Nokian Tyre's successes.

"From day one, we have been open with our partners," Heinonen said. "When we have shared information, the answers have been 99.9 percent positive."

The war in Ukraine eventually forced Nokian to agree to sell its Russian operations Vsevolozhsk, Leningrad Oblast,Russia, to Russian energy and chemicals company P.J.S.C. Tatneft, completing the Finnish tire maker's previously announced exit from the country.

The purchase price of the "debt free and cash free" sale is expected to be around $400 million Euros, or roughly $399 million in U.S. funds. Nokian said the final purchase price is affected by, among other things, net cash and working capital adjustments and changes in the exchange rate.

Nokian Tyres previously moved production of some of its key lines out of its plant in Russia to plants in Finland and the U.S., while securing "transport capacity from Russia with existing and new service providers."

With some of that production shifted to North America, Nokian Tyres said its Dayton factory set production records frequently, completing its best year on record. The company said domestic production "offers a buffer against global uncertainty, especially when it comes to some of the company's most popular products in North America."

The factory manufactures all-season and all-weather tires, according to Heinonen. "The war in Ukraine is not impacting those at all; availability has been as planned. In 2023 we will get even more products from Dayton."

The company said that will result in expanded volume of tires from lines including the Nokian Tyres One and WR G4. Nokian also plans to manufacture select light truck tire lines in Dayton; winter tires will be sourced from Finland.

Nokian also introduced the non-studded Hakkapeliitta R5 last fall.

"Feedback from dealers is that it's a tire you don't even need to sell — it's flying out of the shelves," Heinonen said. "The performance is there ... It's a real home run."

In 2022, Nokian Tyres acquired a 290,500-sq.-ft. industrial property located adjacent to its headquarters tire plant in Nokia, with the aim of supporting future growth.

In addition, Nokian announced it had 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.

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

"The year has had a lot of ups and downs, but successful partnerships, production growth and popular products drove success, even in a difficult year," Heinonen said. "That bodes well for the year ahead.

"In 2023 we'll have good news from Dayton, and our supply situation is improving."