Finnish tyre maker Nokian Tyres said on Monday new sanctions imposed by the European Union (EU) on Russia will have a significant impact on its production.
The sanctions, announced on Saturday, ban the import of tyres from Russia, Nokian said, and will affect the company’s ability to sell tyres both in Russia and in the EU, specifically in Central Europe.
The sanctions will also prohibit the export of certain raw materials from the EU to Russia and limit transportation from and to Russia, the company added.
In 2021, Russia accounted for approximately a fifth of the company’s net sales, with approximately 80% of its passenger car tyres produced in the country. Around half of the raw material used to produce tyres in Russia came from outside the country, Nokian Tyres said.
“Raw material availability and its logistics will have a significant impact on the company’s capability to continue production in Russia,” it said in a statement.
The company said it would expedite plans to invest in new production capacity in Europe, while also boosting capacity at its existing factories in Finland and the United States.
“The Heavy Tyres business of Nokian Tyres plc is not impacted by the ban to import tyres from Russia to the EU, as all Nokian Tyres’ heavy tyres are produced in Finland,” it said.