Companies
Violinmaker fine tuning future
By Karen Yip and Chen Limin (China Daily)
Updated: 2010-08-05 10:01
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XIQIAO, Jiangsu - Taixing Fengling Musical Instruments Co Ltd, one of the world's largest violin producers, is fine-tuning its expansion and succession plans. Company Chairman Li Shu is currently mulling three different possibilities including an initial public offering (IPO), a stake sale, or entering into some kind of merger and acquisition, said Li Shu.
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An employee of Feng Ling Musical Instruments Co hangs violins to dry in Xiqiao town, Taixing city, Jiangsu province. [Photo/China Daily] |
The industry veteran is interested in exploring merger and acquisition opportunities with his peers to strengthen Fengling's market share and to improve further on the technical quality of its musical instruments, he told China Daily in an exclusive interview.
Li said he would want to remain a controlling shareholder in Fengling if a suitable party offers to purchase a stake in his company.
"I'm over 60 years old now. I want to transfer my work to a reliable, professional management team," he said. His two sons and a daughter are currently helping him run the business.
Fengling makes violins, guitars, cellos, upright basses, mandolins and the "Chinese two string violin", or erhu, for the export market under its own trademark and also acts as an original equipment manufacturer.
Fengling claims to have 28 percent of the world's violin market share, with annual production of 450,000 violins.
Revenue for the first half of this year climbed 33 percent year-on-year to $22.14 million and is expected to hit $44.28 million this year.
Last year's revenue stood at 259 million yuan ($38.23 million). The export market accounts for 90 percent of Fengling's revenue and its products are available in 60 countries.
Barring any unforeseen circumstances, Liu said the timeframe for the listing of Fengling would be next year.
The company's rivals have also made offers to purchase Fengling but all were rejected.
"The offering price or the financial details were not attractive enough," he said.
Proceeds from the IPO would be used to expand Fengling's business with the establishment of retail stores, music training facilities, and venturing into a new business segment.
"I'm open to acquiring a business that is not music related but with a sound financial record," Li said.
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Li grew up dirt poor in a farming family not far from where his factory sits today, within the Taixing city area of Jiangsu province.
In 1971, after graduating from high school, he joined the Fengling assembly line, eventually rising into managerial roles.
In 1980, with the violin industry in flux, the government reorganized the factory and made the energetic Li its director.
In 2001, he bought the company from the local government.