* New plant to boost capacity to 20-21 mln tyres
* To invest 240 mln eur into new Russia plant
* Russian car sales growing fast
* Shares up 1.1 pct
(Adds share move, CEO comments, details, background)
By Jussi Rosendahl and Ritsuko Ando
HELSINKI, April 7 Finnish winter tyre specialist
Nokian Renkaat (NRE1V.HE) plans to invest about 240 million
euros ($343 million) into a new car tyre plant in Russia to
boost production and meet growing demand.
A new plant to be built next to the existing facility will
increase its annual car tyre capacity by 5-6 million to 20-21
million tyres during 2012-2014, it said.
"Market outlook has strengthened clearly and we need more
production capacity," Chief Executive Kim Gran said in a
The company said it expects Russian car sales to grow 25-35
percent this year. Nokian Renkaat is already adding new
production lines in its existing Russian factory.
It also said it is considering adding production capacity
for heavy tyres.
Nokian Renkaat, which makes 80 percent of its profit from
winter tyres, has been focusing on the fast growing markets in
Russia, other former Soviet republics and eastern Europe. In
addition to Russia, the company also has a plant in Finland.
The company has also said it is looking closely at the
Chinese market. [ID:nLDE6BC0S1]
Last week the company announced it expected January-March
operating profit of 65-70 million euros on sales of around 278
million, topping analysts' average forecast. The results are due
on May 6.
The company's shares rose 1.1 percent by 0726 GMT on the
Helsinki bourse OMXH.PI, which was down 0.5 percent. The stock
has nearly doubled in value since the beginning of 2010.
(Editing by Hans Peters and Jon Loades-Carter)