Piano maker tunes into China's growing middle class
(Reuters)
Updated: 2004-07-02 11:00

During the tumultuous Cultural Revolution in the 1960s and 1970s, few Chinese dared to buythe a piano, which symbolised  West's decadent and bourgeois society.

Li Yundi [sina] Lang Lang [sina]

"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, a 63-year old piano maker who is now director general of Pearl River Piano Co.

How times have changed.

Tong said the state-owned firm, based in the southern metropolis of 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 ($1.69 million) in 1992 when Tong took the helm of the unlisted firm, to 164 million yuan in 2003.

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, which was 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 of Jiang Zemin taken during a factory visit.

Chinese piano prodigies Lang Lang and Yundi Li all started out practising their scales on a Pearl River piano.

CHEAP

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 United States 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 in 2003, down 6.3 percent from 2002 despite a four 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 one percent of Chinese families have a piano at home, compared with 15 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 a years after 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.

QUALITY

In Hong Kong, a polished mahogany upright piano made under Pearl River's Ritmuller brand sells for as little as $1,770 compared with $2,885 for a basic Yamaha model and $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 350,000 square metre plant gobbles up some 80,000 cubic metres 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.

"I think profits will increase by three to five percent but it's very difficult to evaluate at the moment," said Tong.

Prices began rising in China last year after years of deflation. The firm has to buy strings, polyester and felt from overseas which Tong said is "very expensive."

The firm also grapples with power shortages which are plaguing China's rapidly growing economy. Since April, staff have taken off Friday and Saturday and worked on Sunday instead to conserve electricity.

Tong credits the Chinese piano classic "The Yellow River", a rousing revolutionary concerto composed during Japan's occupation of China, for sparking the country's love affair with the piano.

But Tong, known as the "Piano Man", prefers "Greensleeves" and can play a shaky rendition of the melodic English folk song.

"I taught myself that a poor man has to be bright," he said with a smile.

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