Finnish tyre manufacturer Nokian Tyres is preparing to build a new passenger car tyre factory in Romania, the company announced on Tuesday.
The facility, which will cost around 650 million euros to build, will start production in stages, with the first tyres to roll out of the factory in the second half of 2024. By 2025, the firm said the factory's annual output will be around six million tyres, with an opportunity for future expansion, according to a statement.
"This investment is a significant strategic decision enabling our future growth. A world-class manufacturing facility in Europe is a key step in getting additional capacity and creating a balanced manufacturing platform as we start building the new Nokian Tyres without Russia," the company's CEO, Jukka Moisio, said in the statement.
After Russia's invasion of Ukraine at the end of February, the company eventually decided to pull out of the country in April.
Before that decision, the firm told analysts in March that it planned to continue its production operations in Russia, despite many of its competitors announcing their intentions to suspend business due to the war. There was a drop in the company's share price following the announcement of those plans.
In Tuesday's statement, the firm said that "due to the war and the subsequent, tightening sanctions it is no longer feasible nor sustainable for Nokian Tyres to continue operations in Russia." It noted that it agreed to sell off its Russian operations in October.
Nokian said the factory will be located in the northwestern city of Oradea and employ about 500 workers. The facility will manufacture larger-sized passenger and SUV tyres for the Central European market.
The company also issued its third-quarter results on Tuesday, with operating profits of 40.7 million euros, compared to 89.1 million euros during the July-September quarter in 2021. Turnover increased by five percent to 466 million euros.