The agreement concerning the sale of Nokian bicycle tire business was signed and confirmed yesterday. Also the sale of the factory premises in the town of Lieksa and the conditions related to the deal were accepted. The bicycle tire unit will continue its operations under the new ownership as of December 1, 2004. The total sale price comprising the business operations and the real estate was EUR 3.6 million ($4.8 mm).
Nokian Tyres sold its bicycle tyres business to Suomen Rengastehdas Oy. The buyer will continue to run and develop the bicycle tyre business in the town of Lieksa in Finland.
The new owner will also take over the manufacture of heavy inner tubes and provide contract manufacturing services to Nokian Tyres in this area. Nokian Tyres personnel, a total of 59 persons, working at the Bicycle Tyres profit centre and in heavy inner tubes manufacture will be employed by the new owner under their existing contracts, effective as of 1 December 2004. The buyer, Suomen Rengastehdas Oy, is a subsidiary of Suomen Kumitehdas Oy.
The companies are engaged in the manufacture of bicycle tyres, rubber boots, footwear and other rubber products, and in the reprocessing of rubber. The principal owners of the companies are Mr. Arto Huhtinen and Mrs. Tuire Erkkilä, both previously members of Nokian Jalkineet Oys (Nokian Footwear) management. In 2003, Nokian Bicycle tyres generated net sales of EUR 5.1 million and recorded an operating profit of EUR 0.5 million. The Lieksa plant manufactured 784,000 bicycle tyres as well as inner tubes for heavy tyres in 2003.
