Growing production improved efficiency

Capacity building continues

Nokian Tyres’ two own production plants are located in Nokia, Finland and in Vsevolozhsk near St. Petersburg, Russia.

In connection with the Head office, the Nokian plant manufactures passenger car tyres, heavy tyres and truck tyre treads. Product development and the manufacture of prototypes and test batches happen centrally in Nokia. The annual production capacity of the Nokian plant at the end of 2011 was around 5 million passenger car tyres and 15 thousand tonnes of heavy tyres. From Nokia the products are delivered mainly to western markets.

The ultra-modern plant in Vsevolozhsk was brought into use in 2005. At the end of 2011 10 production lines were in operation and the annual capacity was around 11 million passenger car tyres. Tyres from Vsevolozhsk are sent to over 35 countries, and Nokian Tyres is the largest exporter of consumer goods in Russia.

Total weekly output of car tyres grew from 250 to 360 kpcs/week during 2011. The production is being expanded further; construction of the new plant and warehouse next to the current ones in Russia started and has proceeded on schedule. The new plant is estimated to commence production with two additional production lines during 2012, and further capacity increase by two lines taking place during 2013–2014. This will increase the annual car tyre capacity further by 5–6 million tyres.

The production costs of tyres are clearly lower in Russia than in Finland and other western countries. Production in Russia has been supported by tax relief based on the amount of investment and the location of the factory within customs barriers (in Russia, imported tyres have a customs duty of 20%).

In addition to its own production facilities, the company has contract manufacturing in companies whose quality level meets Nokian Tyres’ high requirements. The share of contract manufacturing in manufacturing operations sales in 2011 was approximately 5%.