NOKIAN TYRES on Tuesday announced it has decided to initiate a controlled exit from Russia.
The Finnish tyre manufacturer said continuing to operate the country has become both unfeasible and unsustainable following the war in Ukraine and the economic sanctions consequently slapped on Russia. The withdrawal preparations will begin immediately with the evaluation of various withdrawal options.
“We have followed the situation with great sadness and we, along with the whole international community, unequivocally condemn the war, which has caused unspeakable suffering to so many,” said Jukka Moisio, the CEO of Nokian Tyres.
“Our short-term focus has been on adapting to the fast-changing, highly uncertain operating environment and maintaining control of our operations in Russia.”
The company produced about 80 per cent of its car tyres and generated 20 per cent of its revenue in Russia in 2021.
Moisio revealed that after “a thorough consideration and assessment of various options” the company has decided to rebuild itself without a presence in Russia. “This was not an easy decision given we have over 1,600 dedicated employees in Russia whose expertise we highly value, as well as many long-standing customer and supplier relations built over the past 17 years,” he added.
Nokian Tyres will record a roughly 300-million-euro asset impairment in the second quarter due to the depreciation of its assets in Russia, leaving it with roughly 400 million euros worth of assets in Russia and Belarus in May.
Due to the risks associated with its assets in Russia, the company has seen its share price sink by almost two-thirds since the beginning of the year, according to Helsingin Sanomat.
Aleksi Teivainen – HT