By staff reporter Fu Yanyan

Officials at a southern China tobacco factory say an arson fire allegedly set by a disgruntled security guard cost the company about 300 million yuan.

The damage estimate was released three days after the July 5 fire at the factory co-owned by leading cigarette manufacturers Hongta Group and China National Tobacco Corp. in Haikou, capital of Hainan Province.

It was reportedly the most devastating fire in the history of the island-province.

A factory worker and a firefighter were injured in the incident, Haikou police said, and a 41 year-old man identified as Zhou was detained as the alleged arsonist.

Caijing learned that the blaze damaged two buildings. Millions of yuan in tobacco and cigarettes went up in smoke.

A factory source told Caijing that Zhou was dissatisfied with the factory's wage policy and management. Haikou police say Zhou signed a confession that said “factory cadres earn a lot while workers earn little.”

A large number of factory workers have long been dissatisfied with their wages. One worker said “the factory business has done quite well in recent years, but worker payments have not increased much. Many workers complained to management and the provincial labor union, but there have been no results.”

Media reports said Zhou allegedly hid more than 40 bottles filled with gasoline at the factory and lit the fuel at 3:30 a.m. July 5. He surrendered to police after watching the fire spread.

1 yuan = 14 U.S. cents