Russia
In April, a month after its acquisition by oil and gas company Tatneft, the former Nokian Tyres operation in Russia adopted the name Ikon Tyres. The business has now taken the next step in its rebranding with the unveiling of new product names.
A total of 25.2 million tyres and rubber tubes were produced in Russia from January to July 2023. The country’s Federal State Statistics Service reports that this represents a production volume of just 77.3 per cent compared with the same months of 2022.
With holding company S8 Capital having acquired the assets of Continental AG in Russia, the LLC Continental Kaluga tyre manufacturing facility has been renamed LLC Cordiant Kaluga. The new legal name came into force on 17 August 2023 and the business will in particular be responsible for tyre production at the former Continental plant in Kaluga, some 100 miles southwest of Moscow.
Continental didn’t receive very much for its tyre factory in Russia, and S8 Capital is now one of the country’s top-three tyre makers. The investment company has four tyre brands in its portfolio at the moment, and additional, renamed brands will join these by the end of this year.
In spite of a steep year-on-year drop in operating profit during Q2 2023, Nokian Tyres believes it has made significant progress towards rebuilding the company following the decision to cut its ties with Russia. It expects a stronger second half to 2023 due to winter and all-season tyre sales and the contribution made by contract manufacturing.
Following the return of Aimone di Savoia Aosta to Italy after almost three decades in Russia, Pirelli has named Anton Tereshin general director of its Pirelli Tyre Russia subsidiary. Tereshin joined Pirelli in 2015 and has held several positions with the tyre maker, most recently chief financial officer of the Russia & CIS business.
S8 Capital, which recently acquired the Continental plant, is set to acquire the Bridgestone tyre plant in Ulyanovsk, Russia and become the country’s second-largest tyremaker. According to the Pravda newspaper, the acquisition marks the continuation of S8 Capital’s expansion into the tyre industry. Post-acquisition S8 Capital will be second only to Tatneft, which acquired a Nokian Tires plant in the Leningrad region earlier this year, in terms of tyre manufacturing capacity.
Michelin announces that it has signed an agreement with Moscow-based tyre distributor Power International Tires LLC for the purchase of its two local companies, Michelin Russia Tyre Manufacturing Company (MRTMC) LLC and Camso CIS LLC. A known partner of Michelin, Power International Tires is one of the country’s main tyre distributors and has a presence throughout Russia.
Departing a profitable market isn’t for everyone: Pirelli & C. reports that Russia accounted for “about 3.5 per cent” of its global revenues of 1,699.7 million euros in the first quarter of 2023, which means the tyre maker Q1 2023 revenues in Russia amounted to approximately 59.5 million. Not a colossal sum when compared with total sales, but nonetheless more than Pirelli made in that market in the first quarters of the two previous years.
The 13th China (Guangrao) International Rubber Tire & Auto Accessory Exhibition (ChinaGRTAE 2023), will be officially unveiled in a few days. On 8 May, a week before the start of the exhibition, the government of Dongying, the city to which Guangrao County belongs, held a press conference on the overall situation relating to the exhibition. At the time, the organisers said that between 15-17 May at least 20,000 professional visitors will participate in the exhibition, and more than 800 foreign businessmen would visit. Tyrepress has China learned that the theme of this exhibition is “Gathering the power of the industrial chain; Building a new development pattern”. In terms of format, ChinaGRTAE 2023 will be mainly offline and supplemented by online.
On 29 April, Kama Tyres celebrated 50 years of tyre-related production. On that day in 1973, Nizhnekamsk tyre factory produced its first inner tube for 6.15 x 13 tyres destined for fitment on Zhiguli (Lada) cars.
When Continental first discussed setting up a plant in Russia back in 2011, it spoke of an investment of around 220 million euros. According to sources within Russia, the German company may only recover a fraction of this amount when divesting its local operation to S8 Capital. Moscow-based newspaper Kommersant states that the transaction is valued at 7 to 10 billion roubles, or just 80 million to 114 million euros, a figure in line with the “impaired assets of around 87 million euros” that Continental reported in connection with its business activity in Russia on 8 March 2023.
The terms of the license agreement signed when the Nokian Tyres operation in Russia changed hands compel the new owner to cease using all trademarks and names belonging to the Finnish tyre maker, except Nordman. The Tatneft-owned business has thus rebranded from Nokian to Ikon Tyres.
Nokian Tyres has presented its first quarterly results since the company sold its Russian operations to Tatneft its resultant production gap. In short, first quarter 2023 net sales were 236.4 million euros down 26.8 per cent compare with 322.9 million euros during the same period last year. That meant an operating loss of 18.8 million euros compared with 21.5 million euros of operating profit in the first quarter of 2022.
Nokian Tyres’s well-publicised exit from Russia has left it with a similarly well-reported production gap that continues to impact the company’s ongoing business. Speaking as part of the company’s first quarter 2023 results presentation, Nokian Tyres executives emphasised that “new capacity is our #1 priority” and shared further details of how they are planning to fill the firm’s production gap. We already knew that Nokian plans to expand its existing factories in Nokia, Finland and Dayton, USA as well as build a new factory in Romania and make off-take contracts with third-party manufacturers, what’s new is the detail and time frames associated with “building the new Nokian Tyres”.
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