Surabaya – After days of mass protests by workers demanding better working conditions, the owners and management of a giant electronic and household gods factory in Indonesia Thursday announced it was willing to meet the demand of employees.

An executive of PT Maspion told some 10,000 workers gathered at the company's main plant in Sidoarjo, just south of the East Java province capital of Surabaya, that the company was caving in and had agreed to meet the demands, a witness said.

The official who did not identify himself, said the agreement had been reached between the management and representatives of the local labor union early Thursday following lengthy negotiations.

Most of the workers who had gathered in front of the plant, ready to take to the street again Thursday, dispersed after the annoucement, the witness said. Trucks of police and marines, deployed there since early Thursday, remained on standby, they added.

The company said in a statement that negotiators agreed to raise by 25 percent the daily bonuses given to Maspion workers at its five factories in and around Surabaya to cover escalating prices from 2,000 rupiah per person per day to 2,500 rupiah.

The statement, read to workers, also said the raise, effective April 1, would lift the lowest monthly wage for employees with less than one year's service by 7.3 percent to 220,000 rupiah (about 25 dollars).

The company pointed out that before the raise, the lowest pay for any employee in the Maspion group was already 38 percent higher than the government-set minimum industrial wage.

The decision, the official said, was taken by the company despite its losses due to falling sales amid the country's economic crisis. "We are still committed to sign and implement the agreement in order to provide employement to our employees and also to keep the factory running," the official added.

The protestors had held daily rallies in the past five days, involving up to 20,000 workers from the company's five factories. They also protested at the local parliament in Surabaya and the governor's office.

At least 20 workers were injured Wednesday when soldiers and police fired warning shots and tear gas and mounted a baton charge to stop them entering the city, witnesses said. Five workers were arrested, the Media Indonesia daily reported.