However, the company has dropped plans to set up a joint venture carbon black plant in China. The Sri Lankan plant will have a capacity of 20,000 tonnes per annum and is likely to cost Rs 75 crore, he said.

PCBL has plans to appoint a renowned consultancy firm for the project. "We will select one of the six major international consultancy firms for the Sri Lankan venture," he said.

"The board of the company may discuss the appointment of a consultant for Sri Lankan project at its next meeting," PCBL's managing director Sudhir Sahgal said.

As for PCBL's China foray, Goenka said: "we have signed a memorandum of understanding with a Chinese company. But the Chinese law does not permit to set up such a venture. So, we had no other option but to pull out."

PCBL has already taken over two tyre plants in Sri Lanka-Associated Ceat Pvt Ltd and Kelani Tyres Ltd-and controls 83 per cent of that country's tyre market. Earlier, at the 39th annual general meeting of the company here on Monday, Goenka said the carbon black market had been in a downtrend for the last few years. But it is now showing an uptrend following a boom in the automotive sector. A double digit growth in carbon black market is expected this year.

International prices of carbon back have gone up from $350 per tonne last year to $420. With signs of recovery in South-East Asian economies, the pressure on domestic prices due to cheap imports is likely to be less, he said.

He believes that all these factors will boost domestic and export demand, leading to better capacity use. PCBL's sales have already gone up by 15 per cent in volume terms in last five months. Exports have been expanded to nine new markets to make the total to 24 countries.