Finnish tire manufacturer Nokian Tyres, which announced its withdrawal from the Russian market this summer, is selling assets in Russia, including a plant in the city of Vsevolozhsk, Leningrad Region, to Tatneft. The parties have signed a relevant agreement, the transaction value is expected to be around 400 million Euros and may be adjusted depending on a number of factors, including the amount of working capital, funds in accounts, exchange rates. The participants do not predict the terms of the closing of the transaction, by noting that the need to obtain permits from Russian regulators creates significant uncertainty in this matter.
According to NokianTyres, the cessation of tire supplies from Russia will affect negatively the company's sales, especially in Central European countries, in the next 2-3 years. To reduce the impact of this factor, NokianTyres is increasing its production capacity in Finland and the US, and is also investing 650 million Euros in the construction of a new car tire plant in Romania. The production capacity of the Nokian Tires plant in Vsevolozhsk is 16 million tires per a year.
At the same time, the share of exports was more than 60% of the total production of the Russian plant. Nokian Tires plant in Vsevolozhsk began the operation in 2005 and it is the largest tire plant in Russia and the most modern tire production in Europe. Nokian Tyres products are presented in segments A and B: these are the premium lines NokianTyres Hakka and NokianTyres Hakkapeliitta and the Nokian Tyres Nordman line in the mainstream segment. It is worth noting that Tatneft had its own tire business, but this year the company sold it to Tatneftekhiminvest-holding, a structure coordinating the activities of Tatarstan's petrochemical complex enterprises.
