Finland's Nokian Tyres said on Monday that new EU sanctions on Russia were posing significant difficulties for its operations in the country and that it is expediting investment plans for new production capacity in Europe.
The tyre manufacturer has faced criticism for its decision to continue operations in Russia while many other international firms have ceased, or suspended, operations in the country after Russia's invasion of Ukraine began.
Following revelations of suspected war crimes by Russian troops, the EU announced a new round of sanctions against Russia last week.
In a statement issued on Monday, Nokian said that the sanctions prohibit the export of its tyres from Russia to the EU, bans materials imports from the EU to Russia as well as limits transportation between Russia and the EU.
"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," the company said.
Last year around 80 percent of the firm's passenger vehicle tyres were produced in Russia, and half of the raw materials it used in the process were imported to Russia, according to the company.
Expediting European production plans
The statement said Nokian was "expediting its plans to invest in new production capacity in Europe," and reiterated plans to increase production capacity at its plants in Finland and the US state of Tennessee.
"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 statement read.
The company said its heavy vehicle tyres business was not affected by the sanctions as all such products are manufactured in Finland, adding that it had previously stopped exports of its heavy vehicle tyre products to Russia.
"Nokian Tyres has never sold tires to the Russian army, and the Russian Federation is not a customer of Nokian Tyres," Monday's statement read.