Nokian Renkaat Says EU Sanctions to Significantly Impact Business; Shares Fall

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By Dominic Chopping

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Shares in Nokian Renkaat Oyj fell 13% in early trade Monday after new European Union sanctions halted Russian tire imports and limited transportation links.

The Finnish tire manufacturer said these new sanctions will have a significant impact on the company’s ability to manufacture tires in Russia, and the ability to sell tires both in Russia and in the EU, specifically in Central Europe.

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In 2021, Russia represented around 20% of the company’s net sales, and approximately 80% of its passenger car tires were produced in Russia.

Around half of the raw materials used for tires produced in Russia came from outside the country, so raw material availability and logistics will have a significant impact on its capability to continue production in Russia, it added.

As a result, the company said it is expediting plans to invest in new production capacity in Europe and is continuing to increase production capacity at factories in Nokia, Finland and Dayton, US

“According to our plan, in the future all tires sold in the Nordic countries will be produced in Nokia, Finland, and all tires sold in North America will be produced in Dayton, US and in Nokia, Finland,” Nokian said.

The sale and distribution of heavy tires to Russia had already been stopped and the company said it has never sold tires to the Russian army or the Russian Federation.
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Write to Dominic Chopping at [email protected]

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Credit: www.marketwatch.com /

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