Nokian Tyres
The statutory negotiations concerning the lay-offs of the Nokian Tyres employees at the Nokia factory in Finland ended on the 19th November, 2008. The company decided after the negotiations to lay off its personnel for 10 days and the majority of the employees will be laid off between 21.12.2008 and 11.1.2009.
Hankook Tire reports that it has been officially nominated concordantly as a corporate member by the Board of Directors of the European Tyre & Rubber Manufacturers’ Association (ETRMA), representing the interests of the European tyre and rubber goods industry. The company will become an official direct member of ETRMA as of 1 January 2009. Currently, ETRMA has 11 tyre corporate – direct members; Hankook Tire will be the 12th.
The ETRMA has confirmed that, last year, the European recovery rate for end of life tyres exceeded 91 per cent, a rate more than 4 per cent higher than the previous year. This positive trend means that Europe is now one of the most advanced regions in the world in the recycling and recovery of tyres, ahead of, for example, Japan, which has a recovery rate of 89 per cent and Canada, at 80 per cent. And while the UK recovery rate, at 95 per cent, is above the European average, it still lags behind the 11 European countries that have achieved a recovery rate of 100 per cent.
In Finland, Nokian Tyres is blaming the global financial crisis for the need to adjust production and improve productivity at its factory in the city of Nokia. Possible adjustment measures, says the tyremaker, include lay-offs of approximately 1,000 employees working at the factory December 21 to January 11.
Despite announcing the need to idle workers at its Finland factory to adjust production, the latest financial figures for Nokian Tyres shows a company doing well in 2008. Results for the quarter ending September 30 show net sales, operating profit and net profit have increased both during the three-month period and during 2008 as a whole.
Finland’s Nokian Tyres has acquired two retail locations from Monro Muffler Brake, and plans to convert them to its Vianor retail tyre outlets. The new Nokian properties are located in Brattleboro, Vt., and Keene, N.H. The two new locations gives Nokian 12 Vianor stores in the U.S. Nokian has some 470 Vianor stores in Europe. (Tire Review/Akron)
Nokian Tyres has received an announcement, according to which the ownership of Varma Mutual Pension Insurance Company has increased above the level of five per cent of the voting rights and share capital in Nokian Tyres plc as a result of a share transaction concluded on the 16th October 2008. Varma Mutual Pension Insurance Company now holds a total of 6,870,657 Nokian Tyres’ shares, representing 5.50 per cent of the company’s 124,831,190 shares and voting rights.
Nokian’s product range has grown with the addition of the Nokian HT SUV, a summer tyre intended for urban use 4×4 vehicles. The HT SUV is, says the manufacturer, most at home on asphalt roads, however it is said to also function excellently off on “twisty small roads” and “tracks that are covered in sand and gravel and difficult to drive on.” The T and H speed rated range will be available in a wide range of sizes covering all popular 4x4s sold in Europe, with sales starting in the spring of 2009.
Nokian Tyres Inc. (U.S.), Dorsey Tire Co., based in Savannah, Ga.; and Malaysia’s Platinum 1 International are the newest members of TRIB.
“We are very happy to welcome these companies to the TRIB family and we know they will enjoy the many benefits TRIB offers to its members worldwide,” said Harvey Brodsky, TRIB’s managing director. (Tire Review/Akron)
The newest addition to the Nokian range of summer tyres is the Z G2; a W and Y speed rated uhp tyre, designed for sporty cars and fast driving. It is available in a number of sizes, for wheels from 16″ to 20″ diameter. The Nokian Z G2 has been developed and tested on fast European tracks, as well as on rough-surfaced roads, over several years. Special attention was paid to wet grip and the prevention of aquaplaning. Wear resistance was developed by means of thorough laboratory testing and driving hard durability tests on harsh asphalt surfaces. The tyre is targeted at demanding consumers, and its top-of-the-range performance has been achieved with the help of the latest development and production technology.
Nokian Tyres is reportedly partnering with Immo Industry Group and Aladdin Group to develop its distribution operation in Ukraine. The move forms part of Nokian’s plan to “rapidly” increase its presence in the Ukraine through its Vianor retail chain this year. The location suggested by Immo Industry Group and Aladdin group is called the IIG-Aladdin Group Industrial Park Kiev V and is said to cover 11,500 square metres.
Finland’s Nokian Tyres is one of 37 candidates competing for the Nordic Council’s Nature and Environment Prize 2008. The regional environmental prize is contested by companies throughout the region, and this year sees entries from Sweden, Finland, Denmark, Norway, Iceland and the hard-to-spot-in-the-atlas autonomous island of Åland
The theme for this year’s Nature and Environment Prize is lower energy consumption with better tools. The prize will be awarded to a Nordic product, invention or service that helps to reduce people’s energy consumption. To be eligible, a product, invention or service must be potentially applicable to all of the Nordic countries and make a significant impact. It can be anything from a single object to a major system.
Nokian Tyres has taken on an RFID-based “manufacturing execution system” for use in its tyre production process. The solution reportedly the first and largest deployment of the UHF RFID based system in Finland. A total of 40 RFID readers and some 1000 RFID tags were deployed at Nokian Tyres during this project.
According to the company, the new system is used to plan, track and control the tread component production at the Nokian Tyres production plant located in Nokia. Additionally, Nokian Tyres is now able to monitor their production in real-time and ensure the availability of tyre materials.
Between January and March 2008, Nokian Tyres Group recorded net sales of 246.3 million euros (199.9 million euros), showing an increase of 23.2 per cent on the corresponding period a year earlier. Operating profit rose to 54.4 million euros (2007: 39 million euros). Compared with the previous year, the group’s net sales increased by 1.4 per cent in the Nordic countries, by 64 per cent in Russia and the CIS countries, by 33.7 per cent in North America and fell by 8.8 per cent in Eastern Europe.
In light of these figures, Nokian Tyres President and CEO, Kim Gran, pointed east in explaining the company’s sales growth: “The majority of growth in sales came from Russia and other CIS countries. Both sales of summer tyres and pre-sales of winter tyres were brisk. The average price of tyres rose as a result of a good sales mix, successfully implemented price increases and new products. Russian manufacture increased in line with targets, and the advantages thereof improved the profitability.”
Passenger car sales were also reportedly boosted by the introduction of the new studless Nokian Hakkapeliitta R winter tyre family, which will be launched to consumers in the autumn.
Deutsche Bank analysts described the results as “signalling future potential,” pointing out that net sales grew 34 per cent and margins reached a high 34 per cent. As a result the bank raised its estimates by some 6 per cent, and its target price to 37 euros. “We believe the fast growth in Russia combined with stability in Russian production were the main drivers on top of which mix seems to have improved slightly. Going forward, we believe margins could remain at the first quarter level at least when compared to history (normally second half margins are above first quarter),” the analysts commented
In a note to clients, ABN Amro said it thinks Nokian’s first quarter results last month were “surprisingly good.” This broker believes a snowy Easter in core markets will result in car and van tyres, and particularly Vianor, seeing some results shift to the second quarter.
Giving an overview of the development of the markets it operates in, Nokian representatives observed that while passenger car replacement markets in Russia and the CIS countries have grown compared with the first quarter of 2007, the Nordic markets declined slightly. Sales grew 64 per cent in Russia and CIS, generating 47 per cent of manufacturing sales.
Interestingly, despite a delay in the onset of the summer season in the Nokian’s Russian and Eastern European markets (a fact that company representatives predict will result in a bumper second quarter), recent developments mean there is a additional upside for the company’s Russian business this quarter. According to the results statement, Nokian will now experience a lower tax rate as a consequence of tax relief in Russia. The tax relief is valid “for as long as the company gains tax on yields corresponding to the amount of the Russian investment, and for two years thereafter.” According to the filing, now that the uncertainties surrounding this tax relief have been ironed out, first quarter 2008 figure contains a non-recurring 6.5 million euro tax relief from the second half of 2007.
Since the company’s last report, the Vianor retail chain has expanded in Russia and Ukraine. At the end of March, the Vianor network comprised a total of 382 sales outlets, 208 of which were partner and franchise stores. During the first quarter, a total of 16 new Vianor outlets were opened, including a branch in New Hampshire, USA and the company’s fifth outlet in Kazakhstan.
Looking forward Nokian Tyres’ expects its prospects for 2008 to be good: “Demand is increasing for winter tyres, UHP summer tyres and SUV tyres, particularly in Russia, the CIS countries and Eastern Europe. In North America, too, prospects in the winter tyre market have improved, whereas in the Nordic countries and Western Europe markets remain flat. Manufacture of forestry machinery as well as other machinery and equipment is active, and the global shortage of heavy special tyres is continuing.”
The Nokian-owned Vianor tyre retail chain has continued its international expansion following the opening of a new branch in Kazakhstan two weeks ago. This time the Finnish based company has taken steps to increase its presence in North America (specifically New Hampshire, USA). Nokian Tyres has made a partner agreement with Vianor-Concord operated by South East Ventures LLC and given them the right to use the Vianor brand. According to company representatives, Nokian Tyres does not officially own Concord, in contradiction with some local news reports. Instead, the agreement sees Concord Tire and Auto Service, an independent company for 27 years, effectively licensed and rebranded as a Vianor outlet. There are now 6 Vianor outlets in the US.
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