Going the Distance: How Rhea County Landed Nokian Tyres’ First North American Plant
Nokian Tyres, a Finland-based tire company, announced plans in 2017 to invest $360 million to build its first North American plant in Rhea County, Tennessee. The battle for the Nokian Tyres plant, which represents the largest foreign direct investment in Rhea County’s history, took community leaders from Tennessee all the way to Russia and Finland, and involved a major change in legislation.
Nokian Tyres is focused on building the safest tires for all conditions and is considered a global leader in the design and manufacture of premium winter tires. Nokian’s products are made for consumer cars and trucks, and also heavy industrial machinery.
Until 2017, Nokian manufactured all its products in Finland and Russia, but the company has seen major growth in the North American market and recently announced the goal to double sales in North America within five years.
“We already have remarkable markets in Northern Europe and in Russia and the company strategy has been focusing on growth in two areas, Central Europe and North America,” says Tommi Heinonen, Nokian representative.
During the site selection process, Nokian looked at 20 different communities before landing in Tennessee.
“Rail access, labor, availability of energy, and the overall business environment were very important,” Heinonen says, detailing the criteria for the company.
In April 2016, Dennis Tumlin, Rhea Economic and Community Development Executive Director, presented a recently acquired site in Rhea County for the project.
“The site was new and had not been on the market before; it was a combination of seven individual parcels,” Tumlin says.
In September 2016, the two finalist communities were invited to visit both the Nokian headquarters in Finland and their manufacturing operations in Russia.
“We never felt like we had it in the bag,” said Dennis Tumlin, Rhea Economic and Community Development Executive Director.. “We were probably always the underdog. Even after we were selected as one of the final two communities, the company’s team would probably tell you that we were not in the lead.”
To land the project, Rhea County had to overcome two major hurdles.
“Tennessee’s corporate tax structure was an impediment. While we were working with Nokian, Governor Haslam was championing legislation called the IMPROVE Act. The legislation passed and resulted in some corporate tax reductions that had a huge impact on this project,” Tumlin says.
The approved legislation leveled the playing field for Tennessee, but the second major hurdle involved wastewater rates at the municipal level. With the help of a consultant, the community was able to adjust the rates to help manage Nokian’s operating costs.
During the recruitment process, the Nokian team made multiple visits to Rhea County, but one particular visit stood out for the team.
“When we first visited on that site in Tennessee, Dennis had bought and put a set of our tires on his truck,” Heinonen says. “We don’t have a distribution facility there so that showed commitment to us because he was driving there with our tires and proudly showing that.”
The purchase of a set of Nokian specialty tires for a truck went a long way towards impressing the company.
Nokian Tyres broke ground on the Dayton, Tennessee plant in early 2018, with production expected to begin in 2020. The company plans to create at least 400 jobs in Rhea County.
Did You Know?
The community partnered with TVA and utilized VR technology to show Nokian officials what the site will look like when complete.
Nokian Tyres, inventor of the winter tire, achieved the new world record for fastest car on ice, when test driver Janne Laitinen drove at a speed of 208.602 mph (335.713 kilometers per hour) on the ice of the Gulf of Bothnia in freezing winter weather.