The company, which is part of the Lanka Ceramics group which includes Lanka Tiles, and is owned by the Ceylon Theatres conglomerate, is benefiting from a construction boom despite a sharp escalation in costs.

Net profit for the nine months ending December 2007 rose 23 percent year-on-year to 263 million rupees.

A construction boom that has been going on for the past five years has increased demand for ceramic tiles.

There has been a slowdown in parts of the construction industry, especially upmarket apartment complexes owing to a saturated market, high interest rates and galloping inflation.

But ceramic manufacturers say demand from residential housing remains strong.

Manufacturers also have been struggling with rising costs, especially energy and wages, which are linked to the country's inflation index.

Company wage costs have gone up with inflation rising sharply in recent months.