Nokian Tires, the company that will build a large tire factory in Oradea, had an operating loss of 18 million dollars in the first quarter of this year, and the exit from the Russian market cost the company more than 330 million dollars. Nokian estimates that the situation will improve and mentions several times in the financial report the future plant in western Romania.
The factory is central to the Nordic countries’ plan to achieve annual sales of two billion dollars worldwide.
Finns from Nokian Tires will start construction of a tire plant in Oradea in May, the serial production of which should start in the second half of 2024. The total amount of investments will be 620 million euros. The state aid requested by Nokian for the implementation of the investment project is estimated at a nominal value of EUR 99 million.
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In May, Nokian Tires starts construction of a tire factory in Oradea
The Oradea plant will employ 500 employees and will mainly produce tires for SUVs and other high-end vehicles, with Central Europe as the main target market. The Finns say they analyzed 40 sites before choosing Oradea.
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.
Nokian decided to build the plant mainly because, due to the war started by Russia in Ukraine, it had to close its operations in the Russian Federation, where there was a large production of car tires. Exit from the Russian market took place in March after the sale of operations for $265 million.
Total costs to close operations in Russia exceed $330 million.
Nokian Tires announced financial results for the first quarter of 2023, and net sales fell from $322 million to $236 million. In the first months of 2022, operating profit was $21.5 million, and there was an operating loss of $18.8 million in the first three months.
For the whole of last year, operating profit was $56.7 million, and net sales were $1.35 billion.
Sales are expected to be between $1.3 billion and $1.5 billion this year, with the second half of the year expected to be better. In a few years, the goal is to reach two billion dollars a year.
The withdrawal from Russia also reduced the total number of employees by about a thousand to 4,100.
Photo source: Dreamstime.com
Source: Hot News
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