Finnish manufacturer Nokian Tires has asked the government for state aid to build a tire factory in Oradea, an investment estimated at more than 620 million euros, which will create more than 540 new jobs and an average salary of more than 2,000 euros. This is stated in the Memorandum, which will be considered by the Government on Wednesday.

The executive branch has on the agenda of Wednesday’s meeting a memorandum aimed at providing special regional state aid requested by Finnish manufacturer Nokian Tires to ensure the financing of eligible costs related to establishment of a tire factory in OradeaBihor district and also to close the funding gap associated with these investments from scratch.

State aid in the amount of EUR 99.55 million until 2028 after EU approval

According to the government, the state aid requested by Nokian for the implementation of the investment project is estimated at a nominal value of EUR 99.55 million (gross value).

State aid will be provided in the form of a grant only after the European Commission issues a decision on its approval, and the period of state aid payment will be 2023-2028, the document states.

The investment project must be supported for a period of at least 5 years.

• SEE MEMORANDUM ON NOKIAN STATE AID

Nokian investment to exceed €620 million: results at local and national level

The investment of Nokian Tires in Romania, estimated at EUR 626.42 million, involves the construction of a production plant and its equipment for the production of tires.

The cost of eligible costs is estimated at 611.42 million euros, here we are talking about costs related to buildings and utilities, equipment, funds and IT infrastructure.

Among the objectives of Nokian Tires in Romania is the development of the local economy and the well-being of the residents of the region by rewarding staff above the average level of the labor market in the region.

The executive branch lists the following consequences at the local and national levels:

• The average gross salary at the Nokian Tires factory will be €2,070 per month, which is higher than the national average gross salary announced in August 2022, which was €1,229 per month.
• Nokian Tires will provide excellent and safe working conditions for employees and a professional work environment by purchasing new equipment and providing initial and ongoing employee training.
• The investment will create 542 new jobs.
• Thanks to this investment, the unemployment rate in Bihor County will decrease and the salary contributions collected by the Romanian state from Nokian Tires Europe Operations SRL will exceed 5.8 million euros annually starting in 2026.
• In general, in the analysis period of 2023-2032, the total amount of deductions from wages will be 52.63 million euros.
• In addition, the company’s income tax is estimated at approximately 2.5 million euros per year.
• In general, for the analysis period 2023-2032, the total projected income tax will amount to 16.37 million euros.
• As a result of the investments made in the period 2023-2032, contributions to the consolidated general budget generated by the investments of Nokian Tires PLC amount to 69 million euros.
• The impact on the local economy for the period 2023-2032 is quantified at 147 million euros, excluding the costs of construction companies that will facilitate the construction of the plant or potential equipment suppliers.
• More than 9% of the operating costs generated by the investments in the period 2023-2032 will be attracted by local companies, utility providers and part of the raw materials, as well as other costs, creating an additional positive impact by increasing the turnover of local companies with approximately 20 million euros per year. “, it is stated in the Memorandum.

The document also mentions that Nokian’s investment to be made in Romania will include a research and development component that will bring together local specialists in the field who will develop or improve the product families that will be developed at this new plant.

According to the document, Nokian intends for the plant in Romania to become the world’s first zero CO2 tire factory.

How Oradea was chosen for the Nokian tire plant

Nokian Tires PLC, a Finnish manufacturer of tires for cars and heavy machinery, had 2.47% of the European market in 2021, producing and supplying tires to this market from its two European production sites, Nokia (Finland) and Vsevolozhsk (Russian Federation). .

Production in Vsevolosk produced 82% of the world production of Nokian car tires (about 17 million pieces per year).

Given the geopolitical context caused by the unprovoked military aggression of the Russian Federation against Ukraine and the sanctions imposed by the European Union member states against Russia, Nokian Tires has decided to close the plant in the Russian Federation.

In order to neutralize the consequences of leaving Russia, Nokian Tires wants to open a new production of winter, summer and all-season passenger car tires in Oradea, Bihor county.

• “Nokian Tires identified the need for a location that meets the company’s requirements for a high-capacity tire manufacturing plant near a 4-lane highway/motorway with on-site rail connectivity, available utilities of sufficient capacity, and adequate site area. for purchase/use, with the possibility of further expansion.
• After a thorough analysis of locations in Romania, other EEA states and other global regions, Nokian Tires identified Oradea, Bihor County as the location in the EEA that would satisfy most of the company’s location needs for future investment,” the Memorandum reads.

The new production facility will have a planned capacity of 6 million units per year and will include state-of-the-art technology.