CEO Surin Wongkittiphat insisted yesterday that the company could not comply with the union's demand because of operating losses. He said the company should not provide a bonus payment to employees if it cannot afford to pay dividends for shareholders.

"We are now finding a compromise solution," he said. "As matter of fact, such a demand exists every year. However, the difference is that this year the firm posted a net loss. That's why we cannot afford to pay them the bonus."

He added that the Sara Buri provincial Labour Office was helping to sort out the problem.

Surin said that if the strike

continued, the company would

be forced to cancel purchasing orders from customers, and this would affect its long-term reliability.

He said Union Mosaic Industry faced a net loss because of the economic slowdown, which started late last year due mainly to high oil prices and political uncertainty. These negative factors resulted in a decrease in sales volume. Consequently, the firm was forced to scale down its capacity, which resulted in an increase in production costs.

The company began to post losses in the second quarter.

However, Surin expects performance to turn around next year, generating some profit after the economy stabilises and purchasing orders flow back in.

"Revenue and profit are expected to return, mostly [as a result of orders] from existing customers. Still, revenue and profit next year may not make an aggressive comeback as many consumers suffered from this year's massive flooding," Surin said.

"We'll try every way we can to fill more orders and generate profit," he added.