Printcare had signed an agreement with CTC in April to take over their entire packaging supplies, which hitherto had been imported, Chairman Merrill Fernando told shareholders in the annual report
Plant and equipment ordered for the project will soon be commissioned in a newly expanded section of Printcare's Kadawatha factory.
Fernando said the tea bag division produced good sales and made a greater contribution to the bottom line.
The firm's net profit increased 66 percent to 81.7 million rupees in the year ended March 31, 2007 with turnover up 11 percent to 21. billion rupees.
Overseas markets continue to grow with new customers and innovative products enhancing the group's position as a supplier of tea bag packaging globally, he said.
The company's carton division continues to face "severe pricing pressure" and resistance by customers to price revisions, necessitated by higher cost of raw material, he added.
It was also gradually overcoming teething problems in the security printing business which was still showing a marginal loss but was starting to contribute to the bottom line.
Fernando said he expects the security printing business to show profits in the current year.