While Societe Generale signs, on Monday, the best performance of the European Stoxx 600 index, the Finnish Nokian Renkaat continues to suffer from its dependence on Russia. On the Helsinki Stock Exchange, the tire manufacturer lost another 13%, bringing its fall to more than 65% since the start of the year. The company has warned that the new sanctions imposed by Brussels on Moscow will have an impact ” significant “ on its production.
Announced on Saturday, they prohibit the import of any tire from of Russia and ban the export of certain raw materials from the EU to Russia. However, half of the raw material used to produce tires in Russia came from outside the country, said Nokian Renkaat, which is one of Russia’s largest exporters of consumer goods.
80% are made in Russia
From its plant in Vsevolozhsk, near St. Petersburg, Nokian Renkaat supplies thirty-five countries worldwide, with Northern and Central Europe being among its largest customers. The company derives two-thirds of its income from the sale of tires for passenger vehicles – the balance concerns the market for tractors, trucks, construction machinery, buses and military armored vehicles, which are 80% manufactured. in Russia. Nearly 70% of production is exported.
The new sanctions from Brussels will affect Nokian Renkaat’s ability to sell tires both in Russia (a fifth of its turnover in 2021) and in the EU. “The availability of raw materials and their logistics will have a significant impact on the company’s ability to continue production in Russia”, warned the group in a press release. Drawing lessons from these setbacks, it will accelerate its investments in new production capacities in Europe, while increasing those of existing factories in Finland and the United States. The “Heavy Tyres” division, which deals with machinery tires, is not affected, however, as all of Nokian Renkaat’s heavy tires are produced in Finland.
At the end of February, after the Russian offensive in Ukraine and the decision of the West to ban several Russian banks from the Swift payment system, Nokian Renkaat announced that it was abandoning its financial objectives for 2022, only twenty days after having communicated them. Prior to the war, Nokian Renkaat expected this year to increase “meaningful” sales and operating profit, at comparable currencies.