Nokian Tyres
Tyrepac has become the exclusive distributor of Nokian tyres in Singapore. The deal will see Tyrepac retail the tyres exclusively online. According to a statement released by the company, Tyrepac will further promote Nokian tyres via a variety of marketing campaigns. The deal Tyrepac’s brand count to a total of 18 marques for its Singaporean customers.
Nokian’s Vianor fast-fit network entered southern Europe on July 27 with the opening of an outlet in Montebelluna, Italy. This first Vianor outlet in the region is also the 800th centre the Finnish manufacturer has launched since the first opened for business more than a decade ago.
In its 2010-2011 annual report, the European Tyre & Rubber Manufacturers’ Association reports on what it calls the “dominant sentiment amongst industry leaders” – enhancing, or at the very least maintaining, the competitiveness of its member companies. Elaborating on the situation behind this sentiment, ETRMA secretary general Fazilet Cinaralp comments that “Europe is the most highly regulated area for tyre production and marketing but our global competitors are well aware that there is no market surveillance to enforce our strict rules. This undermines equality in regulatory enforcement and at worst leads to a competitive disadvantage for European producers.”
Visit a tyre plant anywhere in the world, and the chance of encountering equipment manufactured by the VMI Group is very high; the Dutch company, which began business in 1945 repairing war-damaged industrial equipment, is today easily one of the top producers of machinery for the global rubber industry. These days equipment produced for the tyre industry accounts for around 80 per cent of VMI’s global sales and the company has been a dominant force in tyre building machinery since its development of the single-stage process in the 1970s. This landmark concept brought about a revolution in production process quality, and in the years since its release VMI has repeatedly shown its strengths as an industry innovator; the latest developments from VMI, and those just around the corner, suggest the company’s tradition of innovation still remains very strong.
As of May 23 the wholesale operations run by Nokian Tyres in the US city of Denver, Colorado will be taken over by Tire Factory, a group of independent tyre dealers that operate more than 200 locations in 15 states. The Meadow Creek facility in Denver will joint Tire Factory distribution centres operating in Portland, Oregon and Salt Lake City, Utah.
The quarter one results released by Nokian Tyres plc on May 6 show the group’s net sales to have increased 57.3 per cent to 289.2 million euros in the three months to March 31, 2011 and profit up 211.1 per cent year-on-year to 62.4 million euros. For the rest of 2011, the Finnish tyre maker anticipates operating profit, which during the first quarter jumped 241.8 per cent year-on-year to 183.8 million euros, will “improve clearly” compared with 2010; this may be helped by a 30 per cent increase production capacity during the year, largely in its Russian plant. The challenge posed by raw material costs remains, however, and Nokian anticipates these will this year be 30 per cent higher than in 2010. To counter this, Nokian is preparing for “further tyre price increases during 2011.”
In addition to recent positive reviews in German motoring magazines, Nokian reports its summer tyres have met with success in Scandinavian and Russian tyre tests. The recently introduced Hakka Green summer tyre won an eight-tyre (size 205/55 R16) comparative test held by Finnish magazine Tuulilasi. This most recent addition to the Hakka summer line-up was especially praised for its excellent handling properties on dry and wet. “The best properties of the tyre include balanced and unchanging properties, both on wet and dry surfaces,” stated Tuulilasi. When discussing the tyre’s properties on wet roads, Tuulilasi noted that its neutrality and ease of driving in any situation.
At the company’s Annual General Meeting on April 7, Nokian Tyres president and CEO will share plans about the construction of a second factory in Russia. This new plant will be erected alongside Nokian’s existing plant in Vsevolozhsk. “Market outlook has strengthened clearly and we need more production capacity,” reported Gran in a statement prior to the AGM. “We, together with the local authorities, are preparing a new plant next to the current one, which will increase our annual car tyre capacity by five to six million tyres. Negotiations about tax relieves and infrastructure investments are in their final stage.” Gran added that the factory will enter production in 2012 and capacity increases will be made in the two years to 2014.
Following the company’s recent pre-announcement of fiscal results, financial analysts have characterised them as proving “demand has continued to grow in all Nokian's key markets. According to an investor’s note published by Deutsche Bank, this is said to be especially in Russia, where foreign car sales are expected to grow by about a third in 2011 – 2012. Nokian said its sales will reach 278 million euros, with pre-tax profits (EBIT) of some 65 – 70 million euros in the first quarter of 2011. According to Deutsche Bank, the upper end of the EBIT-range was “56 per cent ahead of Reuters’ consensus estimate before the announcement.” Nokian’s management also upgraded its full year 2011 guidance: “In 2011, the company is positioned to provide strong sales growth and to improve operating profit clearly compared to 2010.” Previously the company had said: “In 2011, the company is positioned to provide strong sales growth and to improve operating profit compared to 2010.”
Nokian Tyres has released its annual report for 2010, a year in which, said CEO Kim Gran, “demand, sales and profitability saw a clear positive turn.” Order intake in the company’s core Nordic and Russian markets experienced “rapid growth” in the second quarter, Gran added, while Nokian was “delighted by the strong growth seen in the sales and profitability of our Central and Eastern European operations.” In the annual report the Finnish tyre maker stated its key strategic objectives into the year 2015, including Nordic market leadership as a tyre manufacturer and distributor plus the leading manufacturer and distributor of premium car tyres in Russia and the CIS as well as one of the top suppliers of special heavy tyres in this region.
It probably comes as no surprise that the fastest man on ice is a Finn. Nokian Tyres test driver Janne Laitinen set a new world speed record for driving a car on ice on March 6 when he nursed his Audi – shod with size 255/35R20 97 T XL studded Hakkapeliitta 7 tyres – up to 331.61 km/h (206.05 mph) on a 14 kilometre track laid out on the frozen Gulf of Bothnia near the city of Oulu.
Alongside the publication of Finnish Tyre manufacturer Nokian’s 2010 figures, the company announced a new addition to its board of directors. Benoit Raulin previously served as managing director of Bridgestone Deutschland GmbH and was appointed vice president Finance & Procurement at Bridgestone Europe NV/SA on 1 October 2010.
According to Nokian Tyres, around 50 million winter passenger car tyres were sold in Central Europe in 2010 – 16 per cent more than the previous year. The Finnish tyre maker’s latest product – the third generation of its ‘WR’ series – is targeted directly at this growing market. This time round two versions of the Nokian WR, each with its own tread pattern, are available: the economy focused WR D3 is intended for medium-sized and small family cars, while the WR A3 is optimised for larger and more powerful vehicles and places a stronger emphasis on driving response at higher speeds.
Financial analysts lauded Nokian’s “very strong” fourth quarter results, with Morgan Stanley predicting the news will raise the share price, while Deutsche Bank increased its price target from 37 to 38 euros. Strong demand is also expected to lead to a significant increase in unit output during 2011.
The analysts concurred that Nokian’s pre-released sales and operating income headline figures were in line with the actual results – making the focus on the company’s net debt and continuing outlook. And these, in Morgan Stanley analyst Edoardo Spina’s words are both “great news.” Net debt totalled only 1 million euros, implying cash generation of 383 million euros, according to the analysts.
A jaunty nautical appraisal of this year’s outlook greeted shareholders upon the release of Nokian Tyres’ 2010 financial statements. The man at the helm, president and CEO Kim Gran, stated that “a clear improvement in the drivers for demand in core business brought Nokian Tyres back to a strong growth track. The sails are now bulging with strong tailwind as we go into 2011 with thick order books and growing capacity.”
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