Mon December 20 03:15 pm 2021 in category Articles
Focusing on premium segments brings growth to Nokian Heavy Tyres
Nokian Heavy Tyres has a clear target to grow by 50% in mid-term. The global heavy tires business is steadily growing above 4% per year, but Nokian Heavy Tyres’ target is to grow more than 10% per year. Manu Salmi, EVP, Heavy Tyres & Nokia factory, presented the strategy on Nokian Tyres’ Capital Markets Day in September.
How is Nokian Heavy Tyres going to grow, Manu Salmi?
“There are four main growth drivers: distribution, more capacity, widening the product portfolio by 50%, and developing digital capabilities.
Basically, we are a global business, but our key growth markets are Central Europe and North America, where we will strengthen our sales team and focus on new distribution customers.
The company is building new capacity from 20 to 32 million kilos. This investment of approximately 70 million euros will be ready by 2023 and it will help us meet the growing market demand. We will also develop digital capabilities in our own processes, production, sales and logistics, but also with customers directly, by connecting tires with different electronic systems and developing smart tires.
We are strong in forestry tires, but we will also go to segments where we have not been before, target new customers and make their business more successful.
And we are not only growing, we want to have profitable growth. We will maintain our price position through quality and service. Customers want to have the best tires with best service, and we are ready for that.”
You mentioned widening your product portfolio, what kind of heavy tires can we expect?
“Product, that's the key, that's what customers are buying from us. We have built a new R&D center where we can really meet the customer demands, make new innovations and test those accordingly. At the R&D center we have new machinery, which is our own design, so there is nothing else like it in the world.
We are the global number one in forestry tires business. We are developing the next generation forestry tires together with the biggest machinery makers, and that's why the customer view is so important for us.
New area where we are really targeting the growth is agriculture, and there especially new technologies like very high flexion tires for the high horsepower tractors and tires for trailers.”
You have already made some major innovations for tractor tires, could you tell us a bit more about that?
“Yes, we combined all-terrain mobility and on-road performance in our new tractor tire, Nokian Ground King. We launched that last year, and it has really been a success, as that kind of tire has never been on the market. For many years, customers have been asking if it would be possible to drive on the road with the same tire that they are working on the field, so we designed one.
Actually, demand for that kind of a tire is increasing, because areas where farmers and constructors are working, are widening. For example, in Central Europe, farmers can drive 100 kilometers from one field to another. So, the road performance of a tire is really important, but you can't lose any of the performance features that you need on the field.”
Digitalization is already a part of your product portfolio through Intuitu, how does that work?
“That’s right, Intuitu smart tire technology was launched to agricultural tires. With Intuitu, the tire is telling the user how they are doing, what is the pressure and temperature, that sort of thing. In the future, there will be more information the tire is providing to help you be more efficient in your work. We as a producer can also receive data from the tire, on how they are working, and what could be done better.
In our digital factory, we have a manufacturing execution system, which is, I would say, world-class. We can follow every tire from the raw materials to the end user and back. And that's really important when we are following the quality. When getting feedback, when the tire is really successful, or if there is a challenge in hard conditions, we can follow what has been done, who has done, from which raw materials. That's really important in order to be premium.
This helps us to be efficient in our own production and also plan the availability in the seasons, which is helpful to our customers, too.”
What would you say is essential to Nokian Heavy Tyres’ growth?
“Our lean leadership model has been successful, we have clear targets. Everybody knows what is expected.
But even with good technology or whatever system processes, if the team is not right, it doesn't work. I'm proud of the team, in all functions, they are committed to make this happen, and we have already shown results. We are on the way.”
You can watch Manu Salmi’s full presentation here.