Highlights

• EUR 650 mn Oradea plant to start commercial production in 2025
   
• EUR 250 million for plant comes in EC-approved state aid and EIB loan 
   
• Nokian sets up new production line for heavy tire inner tubes at Nokia 

Giving sustainability a big push, Finnish firm Nokian Tyres has opened the world’s first full-scale tire factory with zero CO2 emissions in Oradea, Romania, scheduling its commercial production from early 2025.

The pioneering passenger car tire factory, which operates without utilizing any fossil energy, has been completed in over two years. The factory initially aims to ramp up to an annual capacity of 6 million tires, with expansion potential in the future. 

The plant will strengthen Nokian’s capability to serve its customers in Central Europe and beyond and support its growth toward net sales of EUR 2 billion. 

EC keen to lift less-developed regions

Nokian has become one of the largest foreign investors in Romania in recent years, investing nearly EUR 650 million in this project. To finance its sustainable tire manufacturing investment, Nokian Tyres receives state aid from the Romanian Government of around EUR 100 million and an investment loan of EUR 150 million spanning eight years from the European Investment Bank. The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its member states.

The European Commission has approved the Romanian State aid of nearly EUR 100 million under the EU State aid rules. The measure will contribute to the EU's strategic objectives relating to job creation, regional development, and the green transition of the regional economy. 

The EC measure comes after identifying that Europe has always been characterized by significant regional disparities in terms of economic well-being, income, and unemployment. Regional aid aims to support economic development in disadvantaged areas of Europe while ensuring a level playing field between member states.

Making a mark in sustainability

Jukka Moisio, President and CEO of Nokian Tyres, said with the full-scale zero CO2 emission tire factory, Nokian is ready to lead the industry and set the new standard for sustainable tire manufacturing. 

Explaining the zero CO2 emission process, Adrian Kaczmarczyk, SVP, Operation Excellence, Nokian Tyres, said on-site solar power units generate part of the electricity used in the factory. 

“Steam used to cure the tires is generated by innovative electric boilers which use fully CO2 emission-free electricity instead of the usual fossil fuels such as coal or gas. In addition, the tire manufacturing process is very energy efficient as we are only utilizing the most modern technology and machinery. With our new Oradea factory, we are truly demonstrating our commitment to sustainability,” said Adrian Kaczmarczyk. 

Combined built-up area of 100,000 m2

The factory produced its first tire in July 2024, and its inauguration was held on September 19, 2024. The factory will focus on passenger car tire production to be primarily sold in the Central European market. 

The total factory area is around 54 hectares. The facility includes the production unit, a distribution facility for storage and distribution of tires, and mixing, utility and administrative buildings. The combined built-up area totals approximately 100,000 m2. 

The planned headcount of the Oradea factory is about 500 people. By the end of 2024, the number is expected to reach 300, and the process will continue in 2025. 

Nokian Tyres chose Oradea in the northwest of Romania as the location for the new tire factory after a thorough evaluation of over 40 sites in various European countries. Oradea was best in terms of talent availability, business environment, infrastructure, real estate and utilities, operational cost and risks.  

“Oradea is now home to us, and we are committed to be a good neighbor, supporting the community, the regional economy and each member of our team,” said Susanna Tusa, General Director and Vice President of Nokian Tyres Romania.  

The Oradea factory opening was held in the presence of a high-level Romanian government and local authorities, Ambassadors of Finland and Romania, Nokian Tyres’ Board of Directors, Management Team, and around 200 guests.   

In November 2022, Nokian announced the plan to construct a greenfield passenger car tire factory in Romania. This initiative aimed to ensure a steady supply of its products following its exit from Russia.

Inner tubes from Nokia to be out in H1 2025

Meanwhile, Nokian Tyres is investing in a new production line for heavy tire inner tubes at its factory in Nokia, Finland. The first inner tubes made in Nokia are expected to be ready in the first half of 2025.

"The sizes of heavy tires and customer requirements have increased significantly. With the new production line, we want to respond to market needs and serve our customers even better also in terms of inner tubes, rims and finished wheel packages. The new inner tube production line will provide us with the additional capacity needed and is important for a balanced heavy tire product portfolio and growth," said Manu Salmi, EVP, Heavy Tyres and Nokia Factory. 

The inner tubes have previously been manufactured in Lieksa, Finland, where production will end in stages in 2025. 

Nokian Tyres, established in 1988, produces tires for cars, trucks, buses, and heavy-duty equipment. Nokian Tyres' net sales for 2023 were €1,173.6 million, a 13.1% decrease from 2022. However, in the first half of 2024, it improved the net sales to EUR 561 million from EUR 530 million in the first half of 2023.

Nokian Tyres completed its exit from Russia in 2023, which resulted in an 80% loss of its passenger car tire production capacity, leading to negative results. Nokian Tyres is now focusing on sourcing from China and ramping up production at existing Finnish and U.S. sites while expanding to Romania.