"It was the first time in three decades that Sri Lankans celebrated the festive periods of December and April without the clouds of conflict and celebrate they did & rightly so," Lion Brewery Ceylon told shareholders in the annual report.

"Along with the festivities, the elections in January and April helped increase demand as did tourist arrivals during the winter season.

"Your Company's distribution system coped remarkably well with the sudden shift in demand confirming its agility & flexibility in the face of rapid change."

Sri Lankans celebrates a new year twice; at the beginning of the standard calendar year and in April, which coincides with the start of the traditional solar year.

Sri Lanka also had elections in both January and April. The firm appointed new distributors and introduced a 500 milliliter can, larger than the existing 300 milliliter one, which it said was an 'instant success'.

With the end of a 30-year war the firm was also selling more in the north of the country though distribution costs were higher, Lion said.

The firm said its brewery ran at full capacity in December, March and April.

"The logistics operations during these months were also stretched to the limit," Lion Brewery said. Yet, the Company did manage to meet demand for the most part although there were instances of brand & SKU (stock keeping units) shortages in the market.

"In anticipation of higher volumes in the coming year, the Company has embarked on an immediate expansion program, the first stage of which will be completed in July & the second by October 2010."

Lion says its capacity would grow by 30 percent by the end of this year and expansion plans beyond 2010 are now being drawn up.

Though there was a global slowdown exports had grown 26 percent last year, with Maldives and the United States doing well.

Lion was exporting 17 containers a month to foreign markets and was market leader in Maldives, with the strong hold on tourist resorts.

"Volumes grew well in the US as well notwithstanding the remnants of the financial crisis that still continues to dampen the operating environment there," Lion Brewery said. "The process of expanding distribution to new states continues as does the process of consolidation in exiting territories.

"As at the end of the financial year, the Company's brands were available in 23 states of the US."

The company's joint venture in India with Carlsberg was still in the red but volumes were growing strongly. Its products were available in most states other than Tamil Nadu and volumes had grown 192 percent.

"The Indian beer industry is both competitive & investment intensive & thus a long term perspective is crucial for success," the firm said.

"Those that have the patience & courage to see through the initial phase of operations in India are likely to reap significant rewards in the medium to long term."

Lion Brewery's revenue grew 18 percent to 7.9 billion rupees in the year to March and net profits surged to 640 million from 88.8 million a year before.

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