Sat, Jul 03, 2004 - Page 10 News List

Piano maker in tune with rising Chinese middle class

A GRAND SCALE Pearl River is now the world's largest piano maker -- producing 280 instruments a day -- and 80 percent are destined for the Chinese market


During the tumultuous years of Mao Zedong's (毛澤東) Cultural Revolution in the 1960s and 1970s, few Chinese dared to buy a piano, which symbolized the West's decadent and bourgeois society.

"We didn't have to stop making them but we can't have sold more than a hundred or so a year back then. Learning the piano was frowned upon," said Tong Zhicheng (童志成), a 63-year old piano maker who is now director general of Pearl River Piano Co (珠江鋼琴).

How times have changed.

Tong said the state-owned firm, based in Guangzhou, is now the world's largest piano maker. Two hundred and eighty pianos a day roll off the production line at Tong's spotless factory, like cars in a Detroit auto plant.

Pearl River's net profit has surged from 14 million yuan (US$1.69 million) in 1992 when Tong took the helm of the unlisted firm, to 164 million yuan last year.

Under his tutelage, it has become a global player in the manufacture of musical instruments, forging a joint venture with rival Yamaha of Japan and buying German brand Ritmuller in 1999.

China's one-child policy has created a culture where parents invest heavily in their children's education -- a boon for piano makers like Pearl River.

"It's not just in developed areas. People like to spend money on their children to improve their educational level. It's a cultural investment," said Tong, seated beneath a picture of former president Jiang Zemin (江澤民) taken during a factory visit.

Chinese piano prodigies Lang Lang (郎朗) and Yundi Li (李雲迪) all started out practicing their scales on a Pearl River piano.

Nearly 80 percent of Pearl River's pianos are sold in China. The firm also exports its low-priced upright and grand pianos to the US and Europe, where the cost of making a piano is six or seven times more than in China.

According to Music Trades magazine, US piano sales had retail value of US$649.35 million last year, down 6.3 percent from 2002 despite a 4 percent increase in the number of pianos sold -- largely due to cheap imports from the likes of Pearl River.

But Tong reckons the China market holds the greatest potential. Under 1 percent of Chinese families have a piano at home, compared with 15 percent to 17 percent in Japan and more in Europe.

For those who can't afford to buy a musical instrument, huge music studios have sprung up in major cities with dozens of private teaching rooms for after-school and weekend classes.

Tong has worked for Pearl River since 1959, three years after a group of organ makers established the firm. The company employs 4,000 people, a relatively lean workforce for a large state-run firm, and invests heavily in technology.

In Hong Kong, a polished mahogany upright piano made under Pearl River's Ritmuller brand sells for as little as US$1,770 compared with US$2,885 for a basic Yamaha model and US$35,650 for a top of the range upright Steinway model.

Tong is adamant that his firm's quality rivals competitors.

Each piano is tuned at least five times before it leaves the factory, where the discordant din of workers tuning pianos was punctuated by the crash of thunder on a humid June afternoon.

The 350,000m2 plant gobbles up some 80,000m3 of wood a year -- enough spruce, pine and maple to cover nine football pitches.

Tong expect sales to grow this year but like other Chinese firms, profits could be hurt by rising material costs and as China moves to rein in its booming economy.

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