Piano maker Kawai lets Hong Kong partner take leading stake
Japanese company sees China as growth market
HAMAMATSU, Japan -- A Hong Kong-based musical instrument company has agreed to become the top shareholder of Kawai Musical Instruments Manufacturing, in a move aimed at deepening their partnership, the Japanese company announced Thursday.
Parsons Music will acquire 896,600 shares, or 9.94%, in Kawai. It manufactures and sells pianos and other musical instruments in China and Hong Kong, with 39 group companies as well as a network of 92 directly owned shops. Parsons is a leading retailer of musical instruments in China.
Kawai and Parsons are already partners in piano production and sales in the Chinese market. Under a consignment arrangement, Parsons currently manufactures and sells Kawai instruments and also offers after-sales service. Some 80% of its piano sales are Kawai brand.
The latest agreement marks a step toward bringing their partnership to new levels in such areas as consignment production of electronic pianos, music education and training of piano tuners.
With its inroads into overseas markets far behind rival Yamaha's, Kawai has been primarily a domestic player. Roughly two-thirds of its sales come from the Japanese market, where the growth outlook is limited. Its group sales are stuck in the 60-70 billion yen ($530-618 million) range.
The elevated partnership with Parsons suggests that Kawai is eyeing the Chinese market as a prime growth opportunity.
Kawai is headquartered in Hamamatsu, Shizuoka Prefecture. In 2016, it bought $16.5 million worth of convertible bonds issued by a Parsons sales subsidiary.