Michelin has suspended production in Russia and halted exports to the country, said Reuters.
In 2004, Michelin became the first international tyre company to open its own production in Russia, with sales in the country currently representing 2% of the group's total and 1% of its global passenger car tyre production, Michelin said in a statement.
The group's only plant in Russia, Davydovo, repairs truck tyres and produces up to 2 million new car tyres per year, mainly for the Russian market and some Northern European countries.
"The plant was already working at a very low level since several days. There is a lot of supply difficulties - which means we have disruption of financial flows, and there's a problem of currency instability," the company's spokesperson told Reuters.
Michelin was looking for alternative supply sources in Asia and the Middle East, the spokesperson said, adding the group would continue to pay the wages of the more than 1,000 people it employs in Russia, including 750 at the Davydovo plant.
It had stopped sales of plane tyres and mining tyres following U.S. sanctions, before halting exports completely on Tuesday.
Earlier it was reported that in April 2015, Nizhnekamskneftekhim (NKNKH), a member of TAIF Group, signed a five-year agreement with the tire company Michelin on the supply of synthetic rubber.
Michelin has been in Russia since 1997 and was the first foreign tire manufacturer to open a plant in 2004. Michelin Russia employs approximately 1,000 people, including 750 at the Davydovo plant. This site has a production capacity of 1.5 to 2 million tires per year, mainly for passenger cars. Most of the production is intended for the Russian market and to a lesser extent for certain Northern European countries. Michelin's sales in the country represent 2% of the Group's total sales and 1% of its global passenger car tire production.
mrchub.com