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Tire Maker Nokian Announces Controlled Withdrawal from Russia

Tire manufacturer Nokian is the latest major firm to announce it is going to stop doing business in Russia. The company's board of directors issued a statement on Tuesday that it is beginning a controlled withdrawal from the country.

Citing the war in Ukraine and the resulting tightening of sanctions, the company says it is no longer possible or viable for it to continue its operations there. Preparations for the withdrawal will begin immediately and Nokian will evaluate different options for carrying it out. The process will be carried out with due consideration for local employees and legislation, the company promises.

Inevitable as it likely was, this move is a big deal for Nokian, which operates three tire manufacturing plants around the world - one in Nokia, Finland, another in Dayton, Tennessee (since 2019) and a third in Vsevolojsk, Russia.

“For the past months, we have witnessed shocking events in Ukraine. We have followed the situation with great sadness and we, along with the whole international community, unequivocally condemn the war, which has caused unspeakable suffering to so many”, wrote Jukka Moisio, President and CEO of Nokian Tyres in a statement.

He added that “Our short-term focus has been on adapting to the fast-changing, highly uncertain operating environment, and maintaining control of our operations in Russia.”

“After a thorough consideration and assessment of various options, we have decided to rebuild Nokian Tyres without a presence in Russia and focus on growth opportunities in our other core markets. This was not an easy decision given we have over 1,600 dedicated employees in Russia whose expertise we highly value as well as many long-standing customer and supplier relations built over the past 17 years.”

- Jukka Moisio, President and CEO of Nokian Tyres

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A Nokian tire, "Made in the USA"
Photo: Auto123.com
A Nokian tire, "Made in the USA"

To ensure sufficient supply of its products, Nokian has been increasing production capacity at its Finnish and U.S. plants; it has also decided to invest in brand-new facilities in Europe. The company announced earlier this year that it had stopped investing in the Russian plant and had begun transferring production of certain key product lines from Russia to its other plants.

Nokian Tyres has been present in Russia since 2005. In 2021, around 80 percent of Nokian's passenger-car tires were produced in the country. The Russian and Asian business segments accounted for about 20 percent of Nokian's net sales.

The company said in its press release that Andrey Pantyukhov, who headed the Russian and Asian business area for Nokian, was no longer part of the management team.

This is more sad news for the company’s Russian workers, who had nothing to do with the decisions made by their political leader. For Nokian, this is certainly a blow, but the company seems to have prepared the transition in order to manage the withdrawal without too much pain.