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Nokian Tyres

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Nokian Tyres plc
Julkinen osakeyhtiö (publicly traded corporation),
Traded as OMX: NRE1V
Industry Manufacturing and service
Founded 1932 as a tyre producer, 1988 as Nokian Renkaat Oyj (Nokian Tyres PLC)
Headquarters Nokia, Finland
Key people
 Petteri Walldén (Chairman), Ari Lehtoranta (President and CEO)
Products Tyres
Revenue €1.058 billion (2010)[1]
€222.2 million (2010)[1]
Profit €169.7 million (2010)[1]
Total assets €1.372 billion (end 2010)[1]
Total equity €937.2 million (end 2010)[1]
Number of employees
 3,510 (end 2010)[1]
Website www.nokiantyres.com

Nokian Tyres plc (Finnish: Nokian Renkaat Oyj), headquartered in Nokia, Finland, produces tyres for cars, trucks, buses, and heavy-duty equipment. Known for its winter tyres, Nokian operates the only permanent winter tyre testing facility in the world. The company's Hakkapeliitta brand name is recognised in Finland as a reputable trademark.

Nokian Tyres concentrates on the consumer car and vehicle tyre replacement and premium snow tyre markets; they do not supply automobile manufacturers tyres for new car production. The greater prices consistently found in those markets result in higher profitability compared to the rest of the tyre industry. The company also produces retreading materials and tyre pressure monitors. It also previously manufactured bicycle tyres but currently licenses the Nokian name on bicycles tyres to another Finnish company. The Vianor retail tyre store chain, which services cars in addition to selling tyres, is owned by Nokian Tyres PLC.

The company traces its history to a groundwood pulp mill established in 1865. Car tyre production began in 1932 by Suomen Gummitehdas Oy (Finnish Rubber Works Ltd). A three-company merger formed the Nokia Corporation in 1967; Nokian Tyres Limited was established in 1988 as a joint venture company split from the conglomerate as Nokia Corporation started focusing entirely on the mobile communications business. Nokian is "Nokia" in the genitive, thus Nokian renkaat meaning "Tyres of Nokia". The European subsidiary of Japanese tyre company Bridgestone is currently the largest minority shareholder.

History

The brand logo of Finnish Rubber Works from 1965−1966.
map of Finland with Nokia Finland in red, located in the southwest part of the country
Nokia municipality, Finland

Early corporate predecessors of Nokian Tyres are the Nokia Aktiebolag (Nokia Company) and Suomen Kumitehdas Oy (Finnish Rubber Works Ltd.).[2] In 1865, mining engineer Fredrik Idestam established a groundwood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland.[3] In 1868, Idestam built a second mill near the town of Nokia, 15 kilometres (9.3 mi) west of Tampere by the Nokianvirta River, which had better resources for hydroelectric production. In 1871, with the help of his close friend, the statesman Leo Mechelin, Idestam renamed and transformed his mills into a share company, founding the Nokia Company.[4]

Suomen Gummitehdas Oy was founded in 1898 and began manufacturing car tyres in 1932. The Hakkapeliitta tyre name was introduced in 1936,[5] and some tyres sold under the Nokian tyre name still use the Hakkapeliitta brand name.[6] Hakkapeliitta is a (Finnish) historical term used for a Finnish light cavalryman in the service of King Gustavus Adolphus of Sweden during the Thirty Years' War (1618–48).[7] In 1967, Suomen Kumitehdas Oy (originally called Suomen Gummitehdas Oy) merged with Suomen Kaapelitehdas (Finnish Cable Works) and the forest and power industry company Nokia Aktiebolag to create Nokia Corporation.[3]

Nokian Tyres (which had manufactured tyres under the Nokia brand; Nokian is the genitive) was split from the Nokia Corporation when Nokian Tyres Limited was created in 1988 as a joint venture company. Nokian Tyres PLC shares were floated on the Helsinki Stock Exchange (OMX Helsinki) in 1995. Nokia, which became the largest mobile telephone manufacturer in 1998,[8] ended its ownership interest in Nokian Tyres in 2003, selling its holding of 2 million shares to Bridgestone Europe NV/SA, a subsidiary of the Japanese tyre manufacturer Bridgestone, for U.S. $73.2 million.[9] This made Bridgestone the largest shareholder,[5] with an 18.9% stake, later diluted to 16.8%.[9][10] Bridgestone announced that Nokian Tyres would be operated independently, but it would consider complementing the company's product development, testing, and distribution.[9]

Production of bicycle tyres and inner tubes started in 1974 in Lieksa, Finland.[5] In 2004, Nokian Tyres sold its bicycle tyre business to Suomen Rengastehdas Oy for €3.6 million.[11][12] This successor company remains one of the few manufacturers of tungsten carbide-studded snow tyres for bicycles.[13] Suomen Rengastehdas continues to produce bicycle tyres, including all Nokian-branded bicycle tyres.[14]

Nokian Tyres set up a joint venture, Ordabasy – Nokian Tyres JSC, with Ordabasy Corporation JSC, a multi-industry Kazakh company, to manufacture passenger car tyres at a planned new factory in Kazakhstan. The venture started in 2007, but the manufacturing project was put on hold in early 2009.[15] Nokian Tyres was to provide technical expertise in tyre manufacturing, and the products were to be sold in Kazakhstan, Central Asia, Russia, and Eastern Europe.[16][17] In 2009, the Nokian Hakkapeliitta tyre model line received the "List of trademarks with a reputation" status by the National Board of Patents and Registration of Finland.[18][19]

Financial information

Nokian Tyres' three principal activities are the manufacture of passenger car tyres, heavy commercial tyres, and retail tyre sales.[20] As of 2008, the Company is the most profitable tyre manufacturer in the world,[21][22] at up to 18% earnings (before taxes and interest) relative to sales, compared to 14% at Bridgestone, 8% at Michelin, and 9.6% at Continental.[10]

In 2010, Nokian Tyres profits were €167.9 million on sales of €1.058 billion, an increase in revenues of 32.5% on the previous year.[1] The company had revenue growth of 18% annually in the 2003–2007 period.[23] Nokian Tyres is also publicly traded on the Berlin Stock Exchange.[24] Kim Gran has been the President and Chief Executive Officer since 1 September 2000, having previously served as a Vice President for five years.[25][26]

Products

Nokian tyre with round metal studs, spike like protrusions to increase traction in ice
Nokian Hakkapeliitta, a winter tyre fitted with metal studs

Passenger car tyres

Nokian Tyres produces tyres for passenger cars, SUVs, and vans.[27] Nokian branded tyres are sold in over 60 countries. Nokian Tyres designed the first winter tyres in 1934 and has more winter tyre patents than any other manufacturer.[10][28] Nokian Tyres is known for its winter tyres,[22][29] not to be confused with all-season tyres.[30] Nokian winter tyres have been described as a favourite of critics[31] and have been well received in winter test results by several publications.[32][33][34] Nokian also has designed some winter tyre models with low rolling resistance, offering lower fuel consumption.[28][31] Nokian was the first company to produce a tyre that allowed for year-round use by having different tread patterns on the lateral and medial aspect of the tread. One pattern is optimised for winter and another pattern is designed as an all-season pattern.[35]

Nokian Tyres was the first tyre manufacturer in the world to fully eliminate high-aromatic oils from its production process. Used as plasticising agents in tread production and to facilitate the compounding of rubber, they contain polycyclic aromatic hydrocarbons (PAHs), a carcinogen, and have been replaced by low-aromatic oils.[36] In 2006, Nokian Tyres received a commendation in the Finnish round of the European Business Awards for the Environment.[37]

The demand for Nokian tyres is seasonal, as a high percentage of the company's sales are of winter tyres, but it has reduced seasonal fluctuations by its development of summer and all weather tyres.[38] According to the company, more than 80% of its passenger car and van tyre sales are winter tyres. Winter tyre sales have a strong seasonal characteristic with 30% of retail sales occurring in the ten days after the first snowfall, thus presenting challenges in production and delivery.[39]

Nokian Tyres does not sell to automobile manufacturers, but instead concentrates on the more profitable consumer tyre replacement and premium snow tyre markets.[21] Nokian Tyres has the highest market share of the Finnish passenger car tyre market. The Finnish, Swedish, and Norwegian markets contributed over 40% of Nokian Tyres' corporate net sales in 2008.

The Russian market, Nokian Tyres' largest,[10] contributed 34% of the net sales and captured 26% of the Russian winter tyre market.[10] CEO Kim Gran describes the Russian consumer as having a "love affair" with the Nokian brand citing that it stems from tyres which fits the local weather conditions and a genuine need in the market. The use of winter tyres, which has softer rubber compounds than all-season tyres, results in improved starting, stopping, and steering performance.[40] The Hakkapeliitta brand was, at one time, the only Western tyre brand in Russia having entered the market during the Soviet era in 1964.[41] In contrast to having a Russian tyre factory to benefit from lower tariffs, another tyre company, Continental AG, abandoned Russian tyre production and hopes for Russian membership in the World Trade Organisation will result in lower import tariffs.[42]

In 2009, the North American market accounted for over 10% of the company's net sales.[43] Nokian Tyres has a tyre subsidiary based in LaVergne, Tennessee (USA). In that market, Nokian Tyres sell only to independent dealers, some of whom use the tyre products to fill in gaps in their product lines instead of an exclusive or majority share. This results in some dealers being knowledgeable about specific tyres but not Nokian Tyre's full tyre product range.[44]

Commercial vehicle tyres

Nokian Tyres manufactures truck and bus tyres sold under the Nokian Hakkapeliitta brand.[45][46] Steer, traction, and trailer tyres are marketed.[47] Nokian Heavy Tyres Ltd is a manufacturer of special tyres for forestry, industrial machinery, and agriculture. Its products are sold as original equipment as well on the replacement tyre market. Nokian Tyres produces a number of product lines, including the Tractor Industrial 2 and Country King.[48] Nokian Tyres is a world market leader in forestry tyres, which are a key product of the Nokian Heavy Tyres subsidiary.[49] Nokian forestry tyres include the Skidder and Cut-To-Length model lines. The Skidder tyres have a 25 degree bar angle and the Cut-To-Length tyres have a 35 degree bar angle.[50] Bar angle is a tyre tread measurement. Smaller bar angles are associated with higher traction at the expense of increased mud accumulation.[51]

Tyre-related products

Nokian Tyres also produces materials for retreading and refurbishing used tyres. Nokian Noktop and Kraiburg, an industry competitor, produce most of the retreading materials for the European market.[52] The RoadSnoop Pressure Watch, a tyre pressure monitor for race cars, is also produced by Nokian Tyres.[53]

Bicycle

The Nokian brand of bicycle tyres, including studded winter MTB and touring models, is owned by Suomi Tyres Finland. See external links below for website.

Vianor tyre chain

Nokian Tyres owns 100% of Vianor Holding Oy,[54][55] which administers Vianor, a tyre chain of company owned and franchised stores. The Vianor name is derived from the Latin phrase "northern way" or "northern road",[56] and reflects the tyre chain's image as a tyre specialist for winter conditions.[57]

Vianor is the largest and most extensive tyre franchise in the Nordic countries with approximately 170 company-owned retail outlets and around 800 outlets[58] in total including franchises. Company-owned outlets are located in the Switzerland, Russia, Norway, Finland, Sweden, and the United States. The twelve United States outlets are located in the American states of Vermont, New Hampshire, New York and Massachusetts.[57] Countries with only franchised outlets include Ukraine, Estonia, Latvia, Lithuania, Kazakhstan, Armenia, Moldova, Georgia, Belarus, Poland, Germany, Czech Republic, Slovakia and Bulgaria.[56]

Nokian Tyres has operated retail tyre stores in Norway since 1987, when it acquired Larsen & Lund, and since 1998 in Sweden and Latvia.[59] The Vianor name was launched in 1999 coinciding with the company's expansion into Finland and Estonia.[56]

Vianor sells two million tyres annually, including Michelin and Bridgestone brands as well as Nokian tyres. Car servicing and a tyre hotel, facilities for customers to store summer or winter tyres during the off-season, are also offered.[60][61]

Tyre facilities

Nokia, Finland production and testing facilities

Nokia Hakkapeliitta tread shown with deep treads and many sipes (thin channels) for better winter traction
Deep tread pattern and multiple sipes in a Nokian Hakkapeliitta R winter tyre tread. The numbers 4, 6, 8 in the tread (in mm) indicate the depth of the remaining tread. The number 8 becomes unreadable as the tread wears to a depth of less than 8 mm.[6]

Nokian Tyres produces 23,000 tyres per day at a factory in Nokia, Finland, and 200,000 tyres a year under the Bridgestone brand name.[62] The original factory was built in 1904, the current one in 1945; it has expanded several times since then.[5] Nokian Tyres has 27 assembly lines at its Finnish plant.[63] The plant uses radio frequency devices to monitor the inventory of materials used to manufacture tyres, such as the 100-metre long strips of rubber tread. Shortages of rubber tread can halt production and so keeping an adequate supply of materials increases efficiency. Despite trade journals discussing this technique, Nokian declines to confirm its production methods.[63]

The company has a 30-hectare (74-acre) testing facility in Nokia, where it road tests tyres between April and November. From November to May, tests are carried out at its Ivalo Proving Grounds in Arctic Lapland.[64] The Ivalo Proving Ground is the only permanent winter tyre testing facility in the world.[62] Because of the short summer in Finland, Nokian tests summer tyres at other locations. During the winter, the testing of summer tyres takes place in South Africa.[65] Nokian also tests tyres at the Applus+ IDIADA facilities in El Vendrell, Spain, and the ATP facilities in Papenburg, Germany.[65]

Vsevolozhsk, Russia factory

Nokian produces approximately 6,000 tyres daily and employs 510 employees at its factory in Vsevolozhsk, Russia near Saint Petersburg, and plans to increase manufacturing capacity to 10 million tyres annually by 2011.[59][66] The factory was established in 2005.[59] In 2006, it expanded its facilities there, adding a mixing department and a 19,000-square-metre (200,000 sq ft) warehouse capable of housing 600,000 tyres. The new mixing department gives the factory the capability to produce rubber compounds on-site instead of importing them from the factory in Nokia, Finland. The Vsevolozhsk factory manufactures Nokian-branded car tyres, the majority of which are sold in Russia and countries of the former USSR.[67] Nokian plans to build 300 housing units and sell them to employees at cost as part of the Russian factory expansion that is scheduled to be completed by 2011.[68]

Contract production of tyres

Nokian Tyres licenses production of its tyres to companies in the United States (Bridgestone, LaVergne, Tennessee plant),[62] Slovakia (Matador, Puchov plant),[69] Indonesia (PT Gajah Tunggal Tbk company),[70][71] and the People's Republic of China (Giti Tire),[72][73] as well as contracts manufacture of agriculture and industrial tyres in Spain and India. In the past, some United States contract manufacturing was done by Cooper Tire's Findley, Ohio plant. Contract manufacture by Giti Tire includes production of up to 500,000 Nokian summer tyres with expansion up to 1.5 million tyres per year.[44] Some Nokian agricultural and industrial tyres were made under contract by the Tofan Grup in Romania for two years until December 1999, when Nokian Tyres withdrew, citing quality standards.[74] Contract manufacture of these types of heavy tyres was then undertaken by Michelin at its Polish plant in Stomil-Olsztyn from 2000[74] until 2005, when Nokian began to shift contract manufacture of industrial tyres to Bridgestone's factory in Bilbao, Spain and agricultural tyres to Balkrishna Tyres in Bhiwadi, India.[75] With an increase in tyre demand as a result of improving economies, Nokian is considering increasing production as well as outsouring additional tyre manufacture in Asia.[76]

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 Lua error in package.lua at line 80: module 'strict' not found.
  2. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  3. ↑ 3.0 3.1 Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  5. ↑ 5.0 5.1 5.2 5.3 Lua error in package.lua at line 80: module 'strict' not found.
  6. ↑ 6.0 6.1 Lua error in package.lua at line 80: module 'strict' not found.
  7. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  8. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ 9.0 9.1 9.2 Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ 10.0 10.1 10.2 10.3 10.4 Nokian to Expand Via Russian Operations, St. Petersburg Times, 3 June 2005. Retrieved 22 December 2009.
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  13. ↑ Lua error in package.lua at line 80: module 'strict' not found.[dead link]
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ Company statement on occasion of publication of 2008 Annual Report.
  16. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  17. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  18. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  19. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  20. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  21. ↑ 21.0 21.1 Nokian Analysts Prove Wrong as Pirelli Targets Russia, Bloomberg, 12 September 2006. Retrieved 6 January 2010.
  22. ↑ 22.0 22.1 Lua error in package.lua at line 80: module 'strict' not found.
  23. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  24. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  25. ↑ Lua error in package.lua at line 80: module 'strict' not found.[dead link]
  26. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  27. ↑ Products, Nokian Tyres. Retrieved 27 November 2009.
  28. ↑ 28.0 28.1 World's Leader in Winter Tires, Nokian Tires. Retrieved 26 November 2009.
  29. ↑ LIVE AT SEMA: Nokian Debuts First N.A. All-Season Line, Tire Review: The Tire Industry's #1 Source for News and Analysis, 5 November 2009. Retrieved 15 December 2009.
  30. ↑ Winter tires and caution can help keep cars on the road, Burlington Free Press, 4 January 2010. Retrieved 4 January 2010.
  31. ↑ 31.0 31.1 Best for Harsh Winters, Consumer Search. Retrieved 26 November 2009.
  32. ↑ Vinterdackstest (Winter Tire Tests), Teknikenvarld. Retrieved 26 November 2009.
  33. ↑ Tire Test: Nokian WR "All-Weather Plus", Canadian Driver, 15 July 2003. Retrieved 26 November 2009.
  34. ↑ Nokian Studded Tyre Tops European Magazine Test, TirePress, 23 November 2009. Retrieved 12 December 2009.
  35. ↑ Pat Foran on whether winter tires are right for you, CTV Canada. Retrieved 11 December 2009.
  36. ↑ Purified Oils, Nokian Tires. Retrieved 26 November 2009.
  37. ↑ Nokian Tyres Against Climate Change, Nokian Tires. Retrieved 26 November 2009.
  38. ↑ Tyre firm Nokian Renkaat Q1 beats forecasts, Reuters India, 7 May 2008. Retrieved 11 December 2009.
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  40. ↑ Smith, Bruce, SNOW TREADS Winter driving expert lauds purpose-built winter tires, Truck Test Digest. Retrieved 16 February 2010.
  41. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  42. ↑ Continental changes approach to Russian market, European Rubber Journal, 1 March 2005. Retrieved 15 January 2010.
  43. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  44. ↑ 44.0 44.1 Nokian broadens reach of tires, Tire Business, 1 August 2005. Retrieved 7 February 2010.
  45. ↑ A new front tyre complements the Hakkapeliitta family for heavy vehicles, Nokian Tyres. Retrieved 25 November 2009.
  46. ↑ Winter tire lessons lost already?, Wheels Canada. Retrieved 11 December 2009.
  47. ↑ Truck and bus tyres, Nokian Tyres. Retrieved 25 November 2009.
  48. ↑ Nokian to expand radial capacity at HQ plant, Tire Business, 14 March 2006. Retrieved 15 January 2010.
  49. ↑ Nokian Heavy Tyres Contact Information, Nokian Heavy Tyres. Retrieved 25 November 2009.
  50. ↑ Tech Update Off-Road Tires and Accessories, The Logging and Sawmill Journal, December 2004/January 2005. Retrieved 15 January 2010.
  51. ↑ Long, Mel, Tire tractor tread patterns compared, Implement and Tractor, 1 May 2005. Retrieved 15 January 2010.
  52. ↑ Trucks tires restoration, Motorida Padangos Profesionalams. Retrieved 9 December 2009.
  53. ↑ Interim Report for Nokian, Reifen Presse. Retrieved 8 December 2009.
  54. ↑ Corporate Governance, Nokian Tyres. Retrieved 25 November 2009.
  55. ↑ Nokian-Reifenhandelskette Vianor will in Deutschland weiter expandieren, Reifenpresse. Retrieved 11 December 2009.
  56. ↑ 56.0 56.1 56.2 Nokian Tyres presentation of interim report 1-3/2011. Retrieved 24 November 2009.
  57. ↑ 57.0 57.1 Vianor tyre chain, Vianor (USA). Retrieved 24 November 2009.
  58. ↑ Nokian Tyres interim report January-March 2011, Nokiantyres.com, 6 May 2011. Retrieved 24 May 2011.
  59. ↑ 59.0 59.1 59.2 History in Brief, Nokian Tyres. Retrieved 24 November 2009.
  60. ↑ Comprehensive offering, inexpensive pricing, Vianor. Retrieved 24 November 2009.
  61. ↑ FAQ, Tire Hotel. Retrieved 12 December 2009.
  62. ↑ 62.0 62.1 62.2 Lua error in package.lua at line 80: module 'strict' not found.
  63. ↑ 63.0 63.1 At Nokian Tyres, RFID Keeps Treads on Track, RFID Journal, 22 May 2008. Retrieved 31 December 2009.
  64. ↑ Vinterns däck i höstens tester, Sydsvenskan, 28 October 2005. Retrieved 12 December 2009.
  65. ↑ 65.0 65.1 Outdoor Testing, Nokian Tires. Retrieved 25 November 2009.
  66. ↑ Nokian to double output at Russian plant by 2011, Tire Business, 15 February 2007. Retrieved 6 January 2010.
  67. ↑ Nokian Tyres completes second stage of Russian tyre factory, Nordic Business Journal, 22 November 2006. Retrieved 24 November 2009.
  68. ↑ Nokian Tyres to build 300 flats for workers at Russian production plant, Forbes, 17 August 2007. Retrieved 6 January 2010.
  69. ↑ Matador to make tyres for Nokian, European Rubber Journal, 1 February 2003. Retrieved 13 December 2009.
  70. ↑ Milestones, PT Gujal Tunggal Tbk Company (Indonesia). Retrieved 16 December 2009.
  71. ↑ Note: Nokian has for a number of years maintained a relationship with Multistrada, an Indonesian tyre producer. See De Klok Holds High Expectations for the New Season, Tire Express, 10 February 2009. Retrieved 16 December 2009. and Result 2004, Nokian Tyre, 11 February 2005. Retrieved 16 December 2009.
  72. ↑ NOKIAN TYRES TO START CONTRACT MANUFACTURING IN CHINA, Europe Intelligence Wire, 28 December 2004. Retrieved 13 December 2009.
  73. ↑ Nokian outsourcing to China, Tire Business, 20 December 2004. Retrieved 13 December 2009.
  74. ↑ 74.0 74.1 Nokian and Michelin Complete Take Off Deal, European Rubber Journal, 1 November 2000. Retrieved 18 December 2009.
  75. ↑ Bridgestone to make heavy truck tires for Nokian; Finnish firm ends off-take deal with Michelin, Rubber and Plastics News, 28 March 2005. Retrieved 18 December 2009.
  76. ↑ N.Renkaat Q2 tops all fcasts, raises 2010 view, Reuters, 5 August 2010. Retrieved 24 August 2010.

External links

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