Aiming for the high utilization of production capacity and improved productivity
Nokian Tyres’ production facilities are located in Finland and Russia. Product development and the manufacture of prototypes and test batches take place in Nokia, in connection with the company’s head office. The Nokia factory manufactures passenger car tyres, heavy tyres, and retreading materials for truck tyres.
The state-of-the-art factory in Vsevolozhsk, near St. Petersburg, manufactured approximately 80% of company’s passenger car tyres. From Vsevolozhsk, tyres are supplied to more than 40 countries making Nokian Tyres the largest exporter of consumer goods in Russia. The company’s investments in the Russian production facilities exceed 800 million.
The annualized capacity of the Finnish and Russian factories amounts to over 20 million tyres, with shift arrangements. The company is capable of responding to market growth by quickly increasing production without making large investments. In 2014 the capacity was not fully utilized, but production output (pcs) increased by 4.3% and productivity (kg/mh) improved by 5.1% year-over-year.
In Russia, the production costs of tyres are clearly lower than in Finland or other Western countries. The operation in Russia has been supported by tax agreements based on the amount of investments and the location of the factory behind tariff walls.
In addition to its own production facilities, the company uses contract manufacturing in factories whose level of quality meets Nokian Tyres’ high standards. In 2014, contract manufacturing accounted for approximately 3% of the company’s total tyre sales.