Nokian adjusts to 'fulfill customer orders' amid Russia-Ukraine war

NOKIA, Finland—Nokian Tyres P.L.C. continues to alter its global production and distribution while maintaining safety for its employees in Ukraine and Russia as the war in Ukraine enters its third week.

In a statement issued on its website, the Finnish tire maker said its operations in Russia continue to be "impacted by transportation capacity availability, and lead times to our customers have increased. The operations can be further impacted by raw-material supply."

Nokian said it has been able "to fulfill the customer orders despite the supply-chain challenges, and continue to do our best to serve our customers and to deliver as agreed with them."

Nokian earlier said it had moved production of some of its key lines out of its plant in Russia to its factories in Dayton, Tenn., and Nokia, Finland, in the wake of Russia's invasion of Ukraine on Feb. 24.

It plans to continue that course of action, according to its latest statement.

Nokian operates one plant in Russia, located in Vsevolozhsk, near St. Petersburg, with 1,600 employees. Nokian reports annual revenue from sales in Russia and Asia of around $378 million.

The Finnish tire maker isn't alone in altering production in Russia. Continental said March 9 it had halted tire production in the country and was discontinuing imports to and exports from Russia.

In its statement, Nokian said in lieu of the current sanctions, it is requiring customers and suppliers in Russia to change their bank. The company said delays are occurring in cross-border transactions, "and volume is small, as the currency trading is not working normally."

Nokian said its crisis management team meets daily in order to prepare for various scenarios, while monitoring the sanctions and any potential response to those sanctions.

"We have activated our contingency plans to mitigate the financial and operational impacts to our business," the company said.

Nokian is shipping tires closer to its customers while securing the raw-material supply to its factories. All of its heavy tires are manufactured in Finland, the company stated, and that truck/bus tires are designed in Finland and produced in the European Union.

Nokian's Ukrianian operations, which began in 2006, include 20 employees there.

"...During those years (Nokian has) built many long-lasting relationships with Ukrainian colleagues and customers.

"We are in daily contact with our Ukrainian team, and as a first priority, we have taken measures to secure their and their families' safety as best as we can, and we will continue our help to them, both on a personal level and as an employer."

Nokian also donated 100,000 Euros—roughly $110,750—to UNICEF to help Ukrainian children affected by the war.

"For us the safety of our employees is No. 1 priority, the company said. "We will do everything we can to support our Nokian Tyres team in this situation."

The company said it is hopeful for a "quick diplomatic solution to this tragedy.

"We do not want to speculate on how the situation in general will evolve," the company said. "We will announce any material direct impacts to Nokian Tyres as appropriate and in a timely manner."

Nokian is ranked No. 19 on Rubber News' list of largest tire makers worldwide with 2020 sales of about $1.4 billion. A complete listing of the world's top tire makers and tire plant locations worldwide is available in our data store.