Asia Carbon Industries, Inc. announced that it will begin converting its three dry production lines to specialty carbon black production lines. The project to be funded by cash from operations is expected to begin on October 1, 2012 and finish in about three months. The total cost is approximately $4 million.

The specialty materials to be produced at the new facilities will generate significantly more revenues as a result of the higher sales prices. In addition, its manufacturing process is significantly cleaner. Specialty carbon black also has a broader range of uses as compared to the more traditional products; these include use as a pigmenting agent, UV stabilizer or conductive agent in a variety of products, such as plastics, toners and printing inks and coating, battery and electrical parts.

The current sales price for specialty carbon black is approximately $2,400 per ton, as compared to approximately $940 per ton for the carbon black now being manufactured at the Company's existing production lines. Each of the Company's dry production lines has an annual production capacity of 12,000 tons, operating at approximately 80% capacity, together the three dry production lines generate approximately $27 million revenue per year at the current price levels. Once the renovation has been completed, the production lines will each have an annual capacity of 6,000 tons, for a total of 18,000 tons of specialty carbon black per year.

Projected revenue from specialty carbon black production at similar operating capacity is anticipated to be approximate $35 million annually. During the production line conversion, the Company will halt production on the existing three production lines. Consequently, management expects revenue for the upcoming fourth quarter may reflect that change.