"This is a very exciting project for all of us since successful completion of this project will recognize us as a relatively high-tech steel belted radial tyre manufacturer in the region," Fernando told shareholders in the annual report.
The firm had produced 14,700 metric tonnes of tyres in the year to March 2011.
Fernando said 32 percent of its sales were from export markets and the group was working towards a 40 percent target.
Fernando also complained about imports saying that the results were achieved despite a 50 percent cut in import duty.
Since gaining independence from British rule all kinds of Sri Lankan businesses have got used to earning rents under the protection of import duties at the expense of the poorest of sections of society.
Critics say rent seeking businesses have perfected the art of playing the nationalist card to oppress ordinary citizens and deny them the right to trade freely with fellow human beings across borders using money earned through honest hard work.
Protected businesses, which tend to be inefficient and produce low quality goods cannot win export customers.
However Kelani Tyres, backed with India's CEAT is now competing in export markets successfully.
In the year to March 2012, group export turnover rose to 1.11 billion rupees from 972 million rupees a year earlier. Domestic sales rose to 3.9 billion rupees from 3.3 billion a year earlier.
Group profits rose to 299 million rupees in the year t March 2012 from 260 million a year earlier. The firm reported earnings 3.72 rupees per share.