Nokian Tyres
Net sales of Nokian Tyres plc were up by 17.8% to 295.4 million euros in the first half of the year (250.8 million euros in the corresponding period in 2004). Operating profit amounted to 46.1 million euros (32.8 million euros).
Nokian Tyres is improving the safety and comfort of driving by introducing the runflat property to its most important winter tyre models. If a flat occurs, the driver can drive on runflat tyres for about 100 km to reach a tyre store or service station where a new tyre can be fitted. The runflat property allows drivers to avoid danger and difficult tyre changes amid busy traffic.
Use of runflat tyres in increasing at a very quick rate. Although runflat products held only a small share of the European tyre market in 2004 (about 0.25%), sales saw a threefold increase over the previous year. Half of the runflat products sold were winter tyres. This year sales are expected to increase even more.
The first Nokian Hakkapeliitta 4 winter tyres have been produced on schedule at Nokian Tyres’ plant in Vsevolozhsk, Russia. Actions to increase production have begun with the target to produce 200,000-500,000 tyres during 2005. The installation of a second production line will begin in the end of the current year. The official opening of the factory will be in the early autumn.
Finnish tyre manufacturer Nokian Tyres Oyj reported profits of 9.4 million euros, compared with 7.1 million euros last year. At the same time net sales rose 129.4 million euros from 112.9 million. Nokian Tyres said its main target for 2005 remains to outperform the results of the previous year in terms of net sales and profit.
Nokian Tyres is to launch its Vsevolozhsk, Leningrad, tyre plant in July or August 2005. Speaking at a Leningrad an Interfax press conference, regional governor Valery Serdyukov confirmed the company would begin production this summer.
Nokian Tyres plc has signed a 180 million syndicated revolving credit facility for 5 years with international banks on the 19 April. The facility will be used to refinance the existing 100 million euros syndicated revolving credit facility that was signed 1 April 2003 and for general corporate purposes. The lead arranger for the facility was Danske Bank A/S. Other participating banks include: Danske Bank A/S, Handelsbanken, HSH Nordbank AG Copenhagen Branch, Nordea, NORD/LB Helsinki Branch and Sampo Bank plc.
The European market doesn’t appear to hold a bright future for retreaded passenger car tyres. Just recently one of the biggest manufacturers of the tyres, Reiff Reifen + Autotechnik GmbH, withdrew from this segment. Nokian Tyres has also taken a similar decision: the Finnish tyre manufacturer has sold its passenger car retreading plant to a Swedish company even though its retreading business was recently brought together under the roof of a new “profit centre”.
Nokian Tyres has revealed that it will issue a maximum of 1.074 million new shares in a directed share issue to selected investors today. This corresponds to 9.9 per cent of shares outstanding. According to a Deutsche Bank analyst, the move could be an early indication of a possible acquisition. “Nokian only has a track record of acquiring and integrating tyre retail and distribution companies. It has not integrated tyre plants historically,” they add. Despite a large investment programme, the analysts still expect 117 million euros of positive cash flow.
Nokian tyres has acquired its Czech importer and a tyre wholesaler, Andel Export-Import. In a statement the company explained that the acquisition will enable it to concentrate its Eastern and Western European logistics operations in Prague.
In 2003 Andel Export-Import’s net sales totalled approximately 3.4 million euros. “The acquisition ensures the sales growth for Nokian branded tyres in a strategically important and fast growing Eastern European market. We will get the control of the whole logistics chain and a very healthy company,” said Kim Gran, president and CEO of Nokian Tyres.
Nokian Tyres’ Vianor tyre chain has announced that it is aiming to open a total of 30, mainly franchised based outlets in Russia during 2005. The company says it will invest approximately 10 million euros in establishing the operation. The news follows the chain’s opening of outlets in Rostov and St Petersburg, and its acquisition of two tyre shops in Sweden. The company says the expansion of the Vianor chain will boost Nokian Tyres’ sales in Russia and give the company direct contacts with Russian consumers. “Tyre distribution is increasingly taken care of by the tyre shops and Nokian Tyres wants to be in the lead of this development,” said Kim Gran, president and CEO of Nokian Tyres.
In Sweden the chain has acquired two new shops Sjögrens Vulk AB and Degerfors Vulkcentral. All Vianor outlets share the same operational model and marketing concept. Vianor outlets sell mainly Nokian branded tyres, but also other well-known tyre brands. In addition, Vianor provides its customers with selected car related products and services, such as tyre hotels.
Towards the end of last year, Nokian Tyres increased its share capital by a total of 45,340 euros. The new shares are being traded on the Helsinki Stock Exchange together with the old shares. Nokian Tyres plc’s share capital now stands at 21,705,762 euros.
Nokian Tyres Corp has announced that its tyre chain, Vianor AB, has signed a letter of intent to sell its car tyre retreading business to another Swedish company, Mac Ripper AB. The company has not disclosed any financial details pertaining to the deal. In a report published by the AFX news agency, Nokian suggested that Vianor sold the retreading business in order to concentrate on new car and truck tyre sales, tyres. Following the news of the sale, shares in Nokian tyres fell 1.63 per cent to 110.17.
Nokian Tyres has confirmed that it has sold its factory premises in the town of Lieksa for a total of 3.6 million euros. The Finnish company sold the bicycle tyre business to Suomen Rengastehdas Oy. According to Nokian, the new owners took over the management of the plant straight away and will provide contract-manufacturing services to Nokian. All personnel, a total of 59 employees, are to keep their jobs working at the Bicycle Tyres profit centre and in heavy inner tube manufacture.
Suomen Rengastehdas Oy is a subsidiary of Suomen Kumitehdas Oy. The companies are engaged in the manufacture of bicycle tyres, rubber boots, footwear and other rubber products, and in the reprocessing of rubber. The principal owners of the companies are Mr Arto Huhtinen and Mrs Tuire Erkkilä, both previously members of Nokian Jalkineet Oy’s (Nokian Footwear) management.
In 2003 the Lieksa plant manufactured 784,000 bicycle tyres and inner tubes.
Nokian and Matador are to expand their co-operation, the companies report. The two tyre manufacturers signed an agreement on 5 November, which will see Nokian increase the number of passenger car tyres that are produced at Matador’s plant in Slovakia. In conjunction with this, Nokian Tyres and Matador also signed an agreement on machinery acquisition. The Finnish company will purchase new equipment at a cost of around 3 million euros in order to secure the production capacity at Matador’s tyre plant.
The objective is to increase the present production of 300,000 tyres to 500,000 tyres in 2005 and to gradually increase the volume to 1 million tyres.
According to Nokian, the manufactured tyres will mainly be Nokian-branded passenger car tyres intended primarily for the Central European markets. The contract manufacturing agreement will be valid until the end of 2009 and after that renewed for one year at a time. The new agreement will replace the earlier agreement signed in January 2003.
Nokian Tyres and Giti Tire (China) have signed an offtake agreement which will see Giti Tire manufacture passenger car tyres on Nokian’s behalf. Based in Shanghai, Giti Tire is one of the biggest producers in China and is part of the Indonesian Gajah Tunggal group.
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