"Tyre volume demand is expected to grow by seven to eight per cent during FY18 and FY19 boosted by higher OEM demand and stable replacement demand, the report said.
Carbon black companies were also on expansion mode based on the growth projections for the tyre demand.
Country's largest carbon black producer, Phillips Carbon Black will pump Rs 300 crore for brownfield expansion and evaluating greenfield unit in south India, where new tyre capacity is likely to come up.
Though demand in Q1 of FY18' suffered due to destocking by dealers before GST rollout, this is a short term aberration and volumes should recover in H2 FY18, the ICRA report said.
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