GLOBAL chemical company ICI yesterday announced an eight per cent hike in quarterly profits but warned that it would keep increasing product prices if cost pressures did not ease.

ICI - which employs more than 500 people in the region, including 350 through its Uniqema division - said transport and raw material costs were likely to spiral higher before Christmas and it would seek to recover them from its customers.

But this was offset by seven per cent growth in paints on the back of solid demand in the UK and Ireland, Germany and Eastern Europe, while National Starch sales were ahead by six per cent.

The news reassured investors that the company was not willing to let costs put a dent in its pre-tax profits, which stood ten per cent higher after the first nine months of the year at £340m.

Between July and September, the company made profits of £133m on the back of sales of £1.53bn - both of which were ahead of market expectations and contributed to ICI shares rising more than five per cent yesterday.

Among its international businesses, ICI said only its Uniqema unit saw sales go into reverse during the third quarter - down by one per cent - as record oil prices took their toll on its utility bills.

Chief executive John McAdam said: "Sales growth has been maintained by ongoing progress in increasing prices to recover raw material cost inflation, despite mixed trading conditions."

Price hikes accounted for four per cent of sales growth over summer and Mr McAdam reported a good finish to the quarter in its paints, Quest fragrances and flavours business and Regional and Industrial division.