Bridgestone to sell Russian operations

TOKYO—After suspending all of its Russian operations March 14 due to the war in Ukraine, Bridgestone Corp. said it will sell off all its assets in the country, a process the tire maker believes could take several months. Still, it's a move Bridgestone is determined to make, given the lingering "uncertainties" and untenable supply line challenges.

The tire maker is seeking a local buyer for its 80.6-hectare tire manufacturing campus in Ulyanovsk, where most of its 1,000 Russian employees are located.

The move likely will broaden sales avenues for Russian tire manufacturing companies and imports of tires from China.

"Following the decision in March to suspend all manufacturing activities in Russia, as well as freeze any new investments and suspend all exports to Russia, the company carefully considered a long-term solution in the interest of its employees, customers and suppliers," Bridgestone said Oct. 31.

Bridgestone opened the Ulyanovsk plant in December 2016. Since then, the facility—with an annual capacity of 2.4 million units—has rolled out more than 5 million 13- to 19-inch passenger and light truck tires. Many of those tires are targeted as OE fitments.

The Ulyanovsk facility, located southeast of Moscow in the Ural Mountains, is "one of the most advanced among all Bridgestone enterprises in the world," Bridgestone said. Still, the Russian operations account for just 2 percent of the tire maker's global revenue.

Bridgestone has maintained a presence in Russia since 1998 with its sales and marketing office in Moscow.

As Bridgestone seeks a buyer for its Russian assets, it has pledged continued support for its Russian employees. Bridgestone has been paying its employees' salaries and benefits in full since operations were suspended early this year, and will continue to do so until the assets are sold.

Of the seven non-Russian tire companies with manufacturing operations in Russia, all have cut business activities there, and two—Michelin and Nokian Tyres P.L.C.—have declared at different points during the year that they are cutting ties completely.

Nokian was the first to announce the potential sale of its Russian facilities, saying last week it had agreed to sell its facility and assets to Russian energy and chemicals company P.J.S.C. Tatneft. The purchase price of the "debt-free and cash-free" sale is expected to be around $400 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—which reports annual revenue from sales in Russia and Asia of around $378 million from the plant in Vsevolozhsk, Leningrad Oblast, Russia—was among the first tire makers to react to Russia's invasion of Ukraine, saying Feb. 25 it had 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."

The plant in Vsevolzhsk is rated at close to 16 million tires per year.

Continental is altering production and business at both its tire and ContiTech operations in Russia.

Pirelli, Titan International and Yokohama Rubber Co. Ltd. have operations in Russia, along with some domestic tire makers.

In all, there are more than 45 total plants in Russia, Ukraine and the surrounding countries (Belarus, Bulgaria, Czech Republic, Hungary, Poland, Romania, Serbia, Slovak Republic and Ukraine.)

Major tire makers in these regions include: Bridgestone, Continental, Michelin, Apollo, Cooper Tire (now part of Goodyear), Hankook, Mitas, Nexen, Pirelli and Yokohama, according to Rubber News data.

European Rubber Journal contributed to this report.