NOKIA, Finland—Nokian Tyres P.L.C. management is stepping up plans to build a second factory in Europe to replace the capacity at its 16-year-old plant in Russia, the future of which is uncertain due to the industrial fallout of Russia's brutal attacks on Ukraine.
To expedite the decision, management is cutting the dividend payment this year completely and will reallocate the $118 million it would have paid out toward the construction of a new plant in Europe.
The company earlier had notified shareholders it would reduce the payout by over half.
Nokian did not disclose a timetable for selecting a site for the new plant.
See our continued, ongoing covarage of the war in Ukraine.
Plans to build new capacity in Europe is in addition to ongoing commitments to increase capacity at its factories in Finland and the U.S., aiming to become geographically more diversified in its manufacturing operations. Nokian's plant in Dayton, Tenn., has a capacity rating of 1 million tires per year. It's Nokia plant has a capacity rating of about 91,000 units annually.
