Nokian Tyres to expand capacity in Europe to replace lost Russian production

Nokia, Finland – Last week Nokian Tyres announced that the company starts to expedite its plans to invest in new production capacity in Europe. Therefore, the Board of Directors changed the proposal to the Annual General Meeting regarding the dividend payment, cutting the total dividend payable to shareholders by EUR 106 million to fund the new capacity.

Because of the war in Ukraine, the company starts to expedite its plans to invest in new production capacity in Europe. Nokian Tyres also continues to increase capacity at its factories in Finland and the US, aiming to become geographically more diversified in its manufacturing operations.

In its proposal announced on March 30, 2022, the Board of Directors proposed that a dividend of EUR 0.55 per share be paid from the financial year January 1–December 31, 2021, i.e. approximately EUR 76.1 million in total. The Board of Directors’ earlier dividend proposal announced on February 8, 2022 was EUR 1.32 per share.

Comparing to the cost of the Dayton plant, which is around EUR 350-400 million, the dividend reduction would give ~25% of the funds to finance a new plant.

Nokian Tyres is no longer investing into production in Russia. By continuing to operate the passenger car tire factory in Russia, the company wants to make sure that the factory is controlled by Nokian Tyres. Shipments of passenger car tires to Russia have been suspended. All Nokian Tyres’ heavy tires are designed and manufactured in Finland. Tires for trucks and buses are designed in Finland and produced in the EU. Sales and distribution of heavy tires to Russia has been stopped. Nokian Tyres has never sold tires to the Russian army, and the Russian Federation is not a customer of Nokian Tyres.