To make matters worse, the company, which manufactures parts for refrigerators and air-conditioners, was also shouldering higher costs for raw materials, Suraporn Simakulthorn, its president, told a recent round-table discussion in Bangkok.

"Local people have lower purchasing power due to soaring oil prices," he said. "Last year, they filled their fuel tanks at Bt14 per litre. Now, it's nearly Bt30. And we have to pay a lot more for raw materials."

The price of copper, Kulthorn Kirby's main raw material, has been spiralling. Last month it cost US$8,045 (Bt309,543) per tonne, compared with $3,249 in the corresponding period last year and $2,739 in May 2004.

"Still, we are unable to increase the prices of our products," he said.

The company also suffers from an influx of less expensive competing products from overseas

that enjoy low import tariffs as

a result of free trade pacts. Suraporn said Thailand still had much to do in terms of controlling standards.

"Imported compressors are subject to only 22 industrial standards," he said, "but our products destined for China have to meet 132 requirements."

Tough times started to hit Kulthorn Kirby in 2005. Although its revenue grew to Bt5.8 billion last year from Bt3.9 billion in 2004, its net profit fell heavily from Bt454.8 million to Bt242 million. In the first quarter of this year, the company recorded Bt1.8 billion in revenue and Bt75.48 million in net profit.

In its annual report, the company said free trade agreements represented a risk factor to its operations because imported electronic products are subject to lower import tariffs, while the government is slower to reduce

tariffs on raw materials for local producers.

Achara Deboonme

The Nation