The Finnish manufacturer Nokian Tires is investing 650 million euros in the construction of a tire factory in Oradea. The net salary will be more than 5,800 lei, which is almost twice the average salary in the region.

Of the 40 resettlement targets, “it was clear that Oradea was the best choice”

“It was clear that Oradea was the best choice for our new factory,” Nokian’s head of investor relations Pjavi Antola told Reuters. She said Nokian had a choice of 40 relocation targets, taking into account the availability of a skilled workforce, logistical advantages, green energy and rail access.

Romania’s large current account deficit, aging population and bureaucracy remain obstacles to the Romanian economy.

Romania’s economy will silently surpass that of its neighbors

Romania’s economy will comfortably outperform its neighbors, a Reuters analysis shows, thanks to European funds, a stable currency and foreign investment driven by the relocation of companies operating in Russia and Ukraine.

The International Monetary Fund expects growth of 3.1%, while even the European Commission’s forecast of 1.8% growth would be well ahead of Poland (0.7% growth) and Hungary, which have faced slowing and rising inflation.

A survey conducted by Ernst&Young in 2022 showed that more than 50 foreign companies intend to establish or expand their operations in Romania, mainly in supply chains and logistics, ranking fourth in Europe in terms of investment intention.

“We are optimistic that investments will increase in the coming years, also encouraged by EU funds,” said Alex Milcev, Head of Tax and Legal at E&Y Romania.

According to Reuters, representatives of the Ministry of Entrepreneurship and Tourism said that they are monitoring five possible resettlement projects in Russia, Belarus and Ukraine, worth approximately 705 million euros.

Among them, Finland’s Nokian Tires ( TYRES.HE ) plans to invest 650 million euros by 2024 in a plant in northwestern Romania, Oradea, a wealthy region that borders poor parts of Hungary.

About the future Nokian plant in Oradea

The plant will have more than 500 employees and will mainly produce tires for SUVs and other high-end vehicles, with the main target markets in Central Europe. The Finns say they analyzed 40 sites before choosing Oradea.

Construction should begin in the first months of 2023, and the first tires, as part of test production, will roll off the assembly lines in the second half of 2024. The investment will also include a logistics center for tire distribution.

“In the third quarter of 2022, we focused on the company’s development plans without Russia. Today we are pleased to announce that we are investing €650 million in a new factory in Oradea,” the company said in its quarterly report on November 1.

The annual capacity will be 6 million tires with the possibility of capacity expansion.

The company produced 80% of its car tires in St. Petersburg, and in August Nokian management said it needed to quickly find a solution to replace the (suspended) production at the Russian plant and promised to announce the future plant soon. The moment has come.

About Nokian and exit from Russia

Nokian began a “controlled exit” from the Russian market in June, and this exit was fully implemented in October after the sale of PJSC Tatnafta operations. In July, imports from Russia to Europe and North America stopped.

The annual production capacity of Nokian in Russia was 17 million tires.

The withdrawal from Russia sent Nokian shares plummeting, and the company suffered an operating loss of 200 million euros in the second quarter of this year due to the Russian “withdrawal”.

In 2021, Nokian’s net sales amounted to 1.7 billion euros, a 30% increase compared to 2020, which was extremely weak due to the pandemic. Operating profit amounted to 268 million euros, which is more than double compared to 2020.

In the last quarter (July-September), Nokian’s sales in the world increased by 5% to 466 million euros.

The company has 4,900 employees and manufactures in Finland and the USA. In the Scandinavian country, the factory is located in a city called…Nokia. The company was founded in 1988.

Nokian Tires is registered in Helsinki and has a market capitalization of EUR 1.6 billion. In July 2021, the capitalization was 5.6 billion dollars, and the historical maximum was reached in October 2013: 6.8 billion dollars.

In mid-September, representatives of Nokian Tires met with Prime Minister Chuke.