Nokian Renkaat
Encyclopedia
Nokian Tyres PLC headquartered in Nokia, Finland
Nokia, Finland
Nokia, Finland is a town and a municipality on the banks of the Nokianvirta River in the region of Pirkanmaa, some west of Tampere. As of it has a population of .-History:...

, produces tyre
Tire
A tire or tyre is a ring-shaped covering that fits around a wheel rim to protect it and enable better vehicle performance by providing a flexible cushion that absorbs shock while keeping the wheel in close contact with the ground...

s for cars, trucks, buses, and heavy-duty equipment. Known for its winter tyres
Snow tires
Snow tires are tires designed for use in winter conditions, such as snow and ice. They are an alternative to the use of snow chains.Snow tires are usually tires with a different rubber composition from all-weather tires...

, 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
Pulp mill
A pulp mill is a manufacturing facility that converts wood chips or other plant fibre source into a thick fibre board which can be shipped to a paper mill for further processing. Pulp can be manufactured using mechanical, semi-chemical or fully chemical methods...

 established in 1865. Car tyre production began in 1932 by Suomen Gummitehdas Oy
Nokian Footwear
Nokian Footwear is a Finnish manufacturer of boots, today part of the Finnish company Berner. Nokian Footwear was founded in 1990, but its history extends back to 1898, when Eduard Polón and a group of other Finnish businessmen decided to establish the company Suomen Gummitehdas Oy in Helsinki...

 (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. The European subsidiary of Japanese tyre company, Bridgestone
Bridgestone
The is a multinational rubber conglomerate founded in 1931 by in the city of Kurume, Fukuoka, Japan. The name Bridgestone comes from a calque translation and transposition of ishibashi, meaning "stone bridge" in Japanese....

, is currently the largest minority shareholder.

History

Early corporate predecessors of Nokian Tyres are the Nokia Aktiebolag (Nokia Company) and Suomen Kumitehdas Oy (Finnish Rubber Works Ltd.). In 1865, mining engineer Fredrik Idestam
Fredrik Idestam
Knut Fredrik Idestam was a Finnish mining engineer and businessman, best known as a founder of Nokia....

 established a groundwood pulp mill
Pulp mill
A pulp mill is a manufacturing facility that converts wood chips or other plant fibre source into a thick fibre board which can be shipped to a paper mill for further processing. Pulp can be manufactured using mechanical, semi-chemical or fully chemical methods...

 on the banks of the Tammerkoski
Tammerkoski
Tammerkoski is a channel of rapids in Tampere, Finland. The city of Tampere is located between two lakes, Näsijärvi and Pyhäjärvi. The difference in altitude between these two is 18 metres and the water flows from Näsijärvi to Pyhäjärvi through the Tammerkoski rapids.The banks of the Tammerkoski...

 rapids in the town of Tampere
Tampere
Tampere is a city in southern Finland. It is the most populous inland city in any of the Nordic countries. The city has a population of , growing to approximately 300,000 people in the conurbation and over 340,000 in the metropolitan area. Tampere is the third most-populous municipality in...

, in southwestern Finland. In 1868, Idestam built a second mill near the town of Nokia, 15 kilometres (9.3 mi) west of Tampere by the Nokianvirta River
Nokianvirta
Nokianvirta is a river of Finland. It flows from the lake Pyhäjärvi near Tampere to the lake Kulovesi, which is a part of a lake system from which the river Kokemäenjoki begins its course towards the Gulf of Bothnia. Nokianvirta is located in Nokia, Finland, the town that gave its name to the Nokia...

, which had better resources for hydroelectric production. In 1871, with the help of his close friend, the statesman Leo Mechelin
Leo Mechelin
Leopold Henrik Stanislaus Mechelin was a Finnish professor, statesman, senator and liberal reformer...

, Idestam renamed and transformed his mills into a share company, founding the Nokia Company.

Suomen Gummitehdas Oy was founded in 1898 and began manufacturing car tyres in 1932. The Hakkapeliitta tyre name was introduced in 1936, and some tyres sold under the Nokian tyre name still use the Hakkapeliitta brand name. Hakkapeliitta
Hakkapeliitta
Hakkapeliitta is a historiographical term used for a Finnish light cavalryman in the service of King Gustavus Adolphus of Sweden during the Thirty Years' War...

 is a (Finnish
Finnish language
Finnish is the language spoken by the majority of the population in Finland Primarily for use by restaurant menus and by ethnic Finns outside Finland. It is one of the two official languages of Finland and an official minority language in Sweden. In Sweden, both standard Finnish and Meänkieli, a...

) historiographical term used for a Finnish light cavalry
Cavalry
Cavalry or horsemen were soldiers or warriors who fought mounted on horseback. Cavalry were historically the third oldest and the most mobile of the combat arms...

man in the service of King Gustavus Adolphus of Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

 during the Thirty Years' War
Thirty Years' War
The Thirty Years' War was fought primarily in what is now Germany, and at various points involved most countries in Europe. It was one of the most destructive conflicts in European history....

 (1618–48). 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
Nokia
Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki...

 Corporation.

Nokian Tyres (which had manufactured tyres under the Nokia brand; Nokian is the genitive
Genitive case
In grammar, genitive is the grammatical case that marks a noun as modifying another noun...

) 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
Helsinki Stock Exchange
The Helsinki Stock Exchange is a stock exchange located in Helsinki, Finland. Since 3 September 2003 it has been part of OMX, referred to as OMX Helsinki . Since NASDAQ's acquisition of OMX in February 2008, the official name of the Helsinki exchange has been NASDAQ OMX Helsinki.- History :The...

 (OMX Helsinki) in 1995. Nokia, which became the largest mobile telephone manufacturer in 1998, 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. This made Bridgestone the largest shareholder, with a 18.9% stake, later diluted to 16.8%. Bridgestone announced that Nokian Tyres would be operated independently, but it would consider complementing the company's product development, testing, and distribution.

Production of bicycle tyres and inner tubes started in 1974 in Lieksa
Lieksa
Lieksa is a town and municipality of Finland.It is located in the province of Eastern Finland and is part of the North Karelia region. The municipality has a population of and covers an area of of which is water...

, Finland. In 2004, Nokian Tyres sold its bicycle tyre business to Suomen Rengastehdas Oy for €3.6 million. This successor company remains one of the few manufacturers of tungsten carbide
Tungsten carbide
Tungsten carbide is an inorganic chemical compound containing equal parts of tungsten and carbon atoms. Colloquially, tungsten carbide is often simply called carbide. In its most basic form, it is a fine gray powder, but it can be pressed and formed into shapes for use in industrial machinery,...

-studded snow tyres for bicycles. Suomen Rengastehdas continues to produce bicycle tyres, including all Nokian-branded bicycle tyres.

Nokian Tyres set up a joint venture, Ordabasy – Nokian Tyres JSC, with Ordabasy Corporation JSC, a multi-industry Kazakh
Kazakhstan
Kazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...

 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. 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. 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.

Financial information

Nokian Tyres' three principal activities are the manufacture of passenger car tyres, heavy commercial tyres, and retail tyre sales. As of 2008, the Company is the most profitable tyre manufacturer in the world, at up to 18% earnings (before taxes and interest) relative to sales, compared to 14% at Bridgestone, 8% at Michelin
Michelin
Michelin is a tyre manufacturer based in Clermont-Ferrand in the Auvergne région of France. It is one of the two largest tyre manufacturers in the world along with Bridgestone. In addition to the Michelin brand, it also owns the BFGoodrich, Kleber, Riken, Kormoran and Uniroyal tyre brands...

, and 9.6% at Continental
Continental AG
Continental AG, internally often called Conti for short, is a worldwide leading German manufacturer of tires, brake systems, vehicle stability control systems, engine injection systems, tachographs and other parts for the automotive and transport industries. The company is based in Hanover, Germany...

.

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. The company had revenue growth of 18% annually in the 2003–2007 period. Nokian Tyres is also publicly traded on the Berlin Stock Exchange. Kim Gran has been the President and Chief Executive Officer since 1 September 2000, having previously served as a Vice President for five years.

Products

Passenger car tyres

Nokian Tyres produces tyres for passenger cars, SUVs, and vans. 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. Nokian Tyres is known for its winter tyres, not to be confused with all-season tyres. Nokian winter tyres have been described as a favourite of critics and have been well received in winter test results by several publications. Nokian also has designed some winter tyre models with low rolling resistance
Low-rolling resistance tires
Low-rolling resistance tires minimize wasted energy as a tire rolls, thereby decreasing required rolling effort — and in the case of automotive applications, improving vehicle fuel efficiency. Approximately 5–15% of the fuel consumed by a typical car may be used to overcome rolling resistance...

, offering lower fuel consumption. 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.

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. In 2006, Nokian Tyres received a commendation in the Finnish round of the European Business Awards for the Environment.

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. 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.

Nokian Tyres does not sell to automobile manufacturers, but instead concentrates on the more profitable consumer tyre replacement and premium snow tyre markets. 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, contributed 34% of the net sales and captured 26% of the Russian winter tyre market. 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. The Hakkapeliitta brand was, at one time, the only Western tyre brand in Russia having entered the market during the Soviet era in 1964. 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.

In 2009, the North American market accounted for over 10% of the company's net sales. 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.

Commercial vehicle tyres

Nokian Tyres manufactures truck and bus tyres sold under the Nokian Hakkapeliitta brand. Steer, traction, and trailer tyres are marketed. Nokian Heavy Tyres Ltd is a manufacturer of special tyres for forestry
Forestry
Forestry is the interdisciplinary profession embracing the science, art, and craft of creating, managing, using, and conserving forests and associated resources in a sustainable manner to meet desired goals, needs, and values for human benefit. Forestry is practiced in plantations and natural stands...

, 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. Nokian Tyres is a world market leader in forestry tyres, which are a key product of the Nokian Heavy Tyres subsidiary. 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. Bar angle is a tyre tread measurement. Smaller bar angles are associated with higher traction at the expense of increased mud accumulation.

Tyre-related products

Nokian Tyres also produces materials for retreading and refurbishing used tyres. Nokian Noktop and Kraiburg
Kraiburg
Kraiburg is a municipality in the district of Mühldorf in Bavaria in Germany....

, an industry competitor, produce most of the retreading materials for the European market. The RoadSnoop Pressure Watch, a tyre pressure monitor for race cars, is also produced by Nokian Tyres.

Bicycle

The Nokian brand of bicycle tire
Bicycle tire
A bicycle tire is a tire that fits on the wheel of a bicycle, unicycle, tricycle, quadracycle, bicycle trailer, or trailer bike. They may also be used on wheelchairs and handcycles, especially for racing...

s, 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, 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", and reflects the tyre chain's image as a tyre specialist for winter conditions.

Vianor is the largest and most extensive tyre franchise in the Nordic countries with approximately 170 company-owned retail outlets and around 800 outlets 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
Vermont
Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...

, New Hampshire
New Hampshire
New Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...

, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

 and Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...

. Countries with only franchised outlets include Ukraine, Estonia, Latvia, Lithuania, Kazakhstan, Armenia, Moldova, Georgia, Belarus, Poland, Germany, Czech Republic, Slovakia and Bulgaria.

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

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.

Nokia, Finland production and testing facilities

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. The original factory was built in 1904, the current one in 1945; it has expanded several times since then. Nokian Tyres has 27 assembly lines at its Finnish plant. 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.

The company has a 30 hectares (74.1 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
Ivalo
Ivalo is a village in Inari Municipality, in Finland's Lapland Province, located on the Ivalo river 20 kilometres to the south of Lake Inari. It has a population of 3,998 and a small airport...

 Proving Grounds in Arctic Lapland. The Ivalo Proving Ground is the only permanent winter tyre testing facility in the world. 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
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...

. Nokian also tests tyres at the Applus+ IDIADA facilities in El Vendrell
El Vendrell
El Vendrell is a town located in Tarragona, Catalonia, Spain, in a wine-growing region. It is wedged between the Mediterranean and the Litoral mountain ranges...

, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...

, and the ATP facilities in Papenburg
Papenburg
Papenburg is a city in the district of Emsland in Lower Saxony, Germany, situated at the river Ems. It is known for its large shipyard, the Meyer-Werft, which specializes in building cruise liners.-Districts:...

, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

.

Vsevolozhsk, Russia factory

Nokian produces approximately 6,000 tyres daily and employs 510 employees at its factory in Vsevolozhsk
Vsevolozhsk
Vsevolozhsk is a town and the administrative center of Vsevolozhsky District of Leningrad Oblast, Russia, located on the Karelian Isthmus east of St. Petersburg. Population: The town's name came from manufacturer Vsevolozhsky...

, Russia near Saint Petersburg
Saint Petersburg
Saint Petersburg is a city and a federal subject of Russia located on the Neva River at the head of the Gulf of Finland on the Baltic Sea...

, and plans to increase manufacturing capacity to 10 million tyres annually by 2011. The factory was established in 2005. In 2006, it expanded its facilities there, adding a mixing department and a 19000 sqm 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. 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.

Contract production of tyres

Nokian Tyres licenses production of its tyres to companies in the United States (Bridgestone, LaVergne, Tennessee plant), Slovakia
Slovakia
The Slovak Republic is a landlocked state in Central Europe. It has a population of over five million and an area of about . Slovakia is bordered by the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south...

 (Matador, Puchov plant), Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...

 (PT Gajah Tunggal Tbk company), and the People's Republic of China (Giti Tire), 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 tires per year. 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. Contract manufacture of these types of heavy tyres was then undertaken by Michelin at its Polish plant in Stomil-Olsztyn from 2000 until 2005, when Nokian began to shift contract manufacture of industrial tyres to Bridgestone's factory in Bilbao
Bilbao
Bilbao ) is a Spanish municipality, capital of the province of Biscay, in the autonomous community of the Basque Country. With a population of 353,187 , it is the largest city of its autonomous community and the tenth largest in Spain...

, Spain and agricultural tyres to Balkrishna Tyres in Bhiwadi
Bhiwadi
-Demographics: India census, Bhiwadi had a population of 33,830. Males constitute 63% of the population and females 37%. Bhiwadi has an average literacy rate of 70%, higher than the national average of 59.5%; with male literacy of 76% and female literacy of 53%...

, India. 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.

External links

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