Offtake Agreement Between Nokian And Russian Producer
Nokian Tyres has entered into negotiations to start tyre manufacturing in Russia as soon as possible. The possible partner has not been named.
Nokian Tyres
Nokian Tyres has entered into negotiations to start tyre manufacturing in Russia as soon as possible. The possible partner has not been named.
Nokian Tyres is preparing to launch RoadSnoop, its first generation tyre pressure and temperature monitor. The sensor is battery powered and is mounted in the tyre at tyre changing and operates instantaneously upon turning the key in the ignition. It sends signals to a dashboard mounted monitor. Deliveries are expected at the beginning of March 2002.
Nokian Tyres has warned that its profits for its tyre chain in the fourth quarter, and for the year as a whole, will be lower than expected, although group sales and profits developed as expected during the autumn. The reason cited for lower sales was the mild winter so far in Nordic countries, which depressed sales of winter tyres.
A lengthy report of a speech by Goodyear boss Sam Gibara, in which he tells of the group’s return to the position of number one tyre manufacturer. The speech encompasses a range of subjects affecting Goodyear – the importance of the Goodyear family and the Goodyear culture, above all the importance of people. The example of Nokian Tyres is held up as, size for size, it is probably the most profitable tyre manufacturer in the world. What Nokian can do, Goodyear subsidiaries can surely do? It is important to get the right mix of products and to shorten the time to market, it is important too to be able to supply customers with what they want, when they want it, and Mr. Gibara acknowledges that, in the past, fill rates have not been all they might be. A decisive factor in Goodyear’s success will be the effectiveness of its multi-brand strategy. Other tyre manufacturers have successfully developed such strategies and Goodyear, with its own name and that of Dunlop, has two very powerful brands in its armoury. Customers differ in their driving habits and incomes and thus they need different tyres to fulfil these various needs. Goodyear has the brands to satisfy all these customers. Finally, Mr. Gibara reiterated Goodyear’s goal to be not only be the number one tyre manufacturer in the world, but the most profitable one. And then he closed the meeting. Except that he didn’t; there was no meeting and there was no speech from Mr. Gibara. The article which can be downloaded in full length as PDF file (size: 2.84 Mbyte, Adobe Acrobat Reader required) is, in fact, an imaginative piece written by Klaus Haddenbrock, outlining what Mr. Gibara could have said on such an occasion. And Mr. Gibara’s reaction? See his letter in reply in TYRES & ACCESSORIES’s April issue.
Nokian Tyres strengthens its retail network by purchasing Rengasmestarit-Kumi-Helenius Group that has 31 tyre retail outlets in Finland. After the acquisition, Nokian Tyres’ retail network covers the whole of Finland. The purchase price is 8.3 million euros. In 1999, the company’s net sales amounted to approximately 34 million euros and it employed 240 people.
Nokian’s net sales in the first three months were up 18.4% over last year’s figures, reaching 67 million Euros (1999 Q1: 57 million Euros). Operating profit was -4.4 m Euros (2.7 m Euros). Manufacturing made a profit of 2.9 m Euros (5.8 m Euros) while the retail chain made a loss of -6 m Euros (-2.9 m Euros).
Lasse Kurkilahti, President and CEO of Nokian Tyres, has been appointed Chief Executive Officer of the Raisio group from September 1st. He will continue as a director of Nokian. The Raisio group is active in the margarine, grain and chemical industries and employs 2,900 people. No decision has yet been made as to who will succeed Mr. Kurkilahti as Nokian’s President, but Chairman Olli-Pekka Kallasvuo said that the search for a replacement would begin soon.
Kim Gran (45) has been elected President and CEO of Nokian tyres, effective 1st September 2000. Gran has been Vice President since 1994 and has been responsible for car and van tyres.
Nokian Tyres announced an off-take agreement with Michelin, mostly for heavy tyres but also for car tyres. A month ago, Continental also seemed to be interested, but obviously finished runners-up.
Following Goodyear and Michelin, Nokian Tyres has released its half year figures. Sales rose 25% over the same period last year to reach 152.2 m Euro but operating profit fell from 5 m Euro to a loss of 1.5 m Euro. Net profit was also negative at -4.1 m Euro. One cause was increased raw material prices (rubber, oil, carbon black) up 8% over last year. Despite the loss, Nokian is broadly on track because, as a Scandinavian company, it generally makes huge profits in the second half of the year.
Two agreements have been signed by Nokian and Michelin concerning the off-take manufacture of Nokian brand agricultural, industrial and truck tyres at Michelin’s Polish factory. The agreements will last for three years and will be renewed annually thereafter. Sales of agricultural and industrial tyres will start this year and truck tyres early in 2001.
Nokian Tyres has developed an intelligent tyre technology system that sends real-time data on tyre pressures and temperature to the driver’s mobile phone. No extra display is required inside the vehicle.
Nokian Tyres has terminated the agreement, made in November 1997, with Tofan, under which the Romanian manufacturer produced some agricultural and industrial tyres for the Finnish company. The reason given was that Tofan was unable to meet quality expectations.
Nokian Tyres introduced its new intelligent tyre technology system to the press in Essen. It will communicate directly with the driver’s mobile phone, sending real time data on tyre pressures without the need to install any extra equipment in the vehicle. Furthermore two new tyres that will be available next spring were presented: The “NRZi” with speed index “W” and an asymmetric and directional tread pattern is designed to meet the demands of high-performance cars. The van tyre family will get a new member with the “NRC2”, the tread profile of which will be 10 per cent wider than that of its predecessor.
Nokian Tyres’ turnover last year reached 322.6 m Euro (28% higher than 1998) and an operating profit of 42.1 Euro (1998 32.2 m Euro). Profit before tax was 35.5 m Euro (1998 29.9 m Euro) and net profit 25.7 m Euro (1998 21.6 m Euro). The company invested 85.7 m Euro (1998 72.7 m Euro), this was mainly in production (30 m Euro). There was also expansion in retail equity with the purchase of the Finnish company ISKO.
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