Mon April 11 10:50 am 2022 in category Stock exchange releases
Nokian Tyres plc: Information on EU’s newly imposed sanctions
Nokian Tyres plc Inside information April 11, 2022 at 10:50 a.m.
The content of the release is the same as in the Company Release published today at 8:00 a.m.
As communicated on April 9, 2022, the EU has announced new sanctions against Russia, impacting Nokian Tyres’ business. The sanctions prohibit the import of tires from Russia to the EU, prohibit the export of certain raw materials from the EU to Russia, and limit transportation from and to Russia. New sanctions will have a significant impact on Nokian Tyres’ ability to manufacture tires in Russia, and ability to sell tires both in Russia and in the EU, specifically in Central Europe.
In 2021, Russia represented approximately 20% of Nokian Tyres’ net sales, and approximately 80% of Nokian Tyres passenger car tires were produced in Russia. Of raw materials for tires produced in Russia, approximately half came from outside of Russia. Raw material availability and its logistics will have a significant impact on the company’s capability to continue production in Russia.
Nokian Tyres is expediting its plans to invest in new production capacity in Europe. We continue to increase production capacity at our factories in Nokia, Finland and Dayton, US. According to our plan, in the future all tires sold in the Nordic countries will be produced in Nokia, Finland, and all tires sold in North America will be produced in Dayton, US and in Nokia, Finland.
The Heavy Tyres business of Nokian Tyres plc is not impacted by the ban to import tires from Russia to the EU, as all Nokian Tyres’ heavy tires are produced in Finland. Sales and distribution of heavy tires to Russia has been stopped already earlier. Nokian Tyres has never sold tires to the Russian army, and the Russian Federation is not a customer of Nokian Tyres.
According to the sanction regarding specifically tires:
“1. It shall be prohibited to purchase, import, or transfer, directly or indirectly, goods which generate significant revenues for Russia thereby enabling its actions destabilising the situation in Ukraine, as listed in Annex XXI into the Union if they originate in Russia or are exported from Russia.
2. It shall be prohibited to:
(a) provide technical assistance, brokering services or other services related to the goods and technology referred to in paragraph 1 and to the provision, manufacture, maintenance and use of those goods and technology, directly or indirectly in relation to the prohibition in paragraph 1.
(b) provide financing or financial assistance related to the goods and technology referred to in paragraph 1 for any purchase, import or transfer of those goods and technology, or for the provision of related technical assistance, brokering services or other services, directly or indirectly in relation to the prohibition in paragraph 1.
3. The prohibitions in paragraphs 1 and 2 shall not apply to the execution until 10 July 2022 of contracts concluded before 9 April 2022, or ancillary contracts necessary for the execution of such contracts.” (Official Journal of the European Union, April 8, 2022)
The company has no further information to provide on the subject at this point but will announce any material direct impacts as appropriate and in a timely manner.
Nokian Tyres plc
SVP, Corporate Communications and Investor Relations
Distribution: Nasdaq Helsinki, media and www.nokiantyres.com