Playing a different tune(2)

Sun Guangyou, who makes bottom and side plates for violins, was one of the entrepreneurs who relocated his factory from Harbin city in Heilongjiang province to Wuqiang last year.

He says that though it was easier to access necessary raw materials like wood in Harbin, the huge transportation costs made the whole business unviable. "Finished products had to be shipped frequently from Harbin to my customers, who were mostly in Hebei and southern provinces," Sun says.

"When I heard about the industrial park in Wuqiang, I decided to move in, so that I could be closer to my customers," he says, adding that his more-than-eight-year association with Jinyin Group was another motivator to move shop.

Unlike the huge costs involved in shipping finished products, the transportation costs for raw materials is relatively lower, Sun says. "Besides, when the zone is complete, I expect to team up with more companies to cut the raw material shipment costs."

Like Sun, many other companies have also set their sights on being part of the industrial cluster that is slowly taking shape in Wuqiang.

"There are other advantages like geographical location and climate that make Wuqiang an ideal manufacturing location," says Que Jianhua, manager of Hebei Third Brother Musical Instrument Co Ltd, which recently moved its manufacturing from Zhejiang to Wu-qiang.

The county's proximity to the Huanghua and Tianjin ports also makes it an attractive location for companies reliant on exports. Huanghua port, a major port in Hebei province, is 140 kilometers from Wuqiang, while Tianjin is about 220 km.

Dry weather is another factor that makes Wuqiang a better destination than the humid areas in eastern and southern provinces such as Guangzhou for companies, Que says.

"Musical instruments, like guitars, are susceptible to moisture during the manufacturing and shipping process. Dampness would lead to physical distortions and loss of market value," he says.

Preferential policies like rent exemptions have also helped manufacturers like Que. "The rent I paid in Zhejiang province was about 1.2 million yuan every year. It is much lower here."

With several upstream firms like Sun's panel-making factory zeroing in on the new economic zone, it is also proving to be big business for e-commerce companies.

Liu Guang and his partners have been running an e-commerce website that sells musical instruments from a warehouse in Wuqiang since 2011. According to Liu, adequate stocks and the ability to offer lower prices have kept his business ticking. "Our sales have grown from 1 million yuan in 2011 to 6 million yuan last year," he says.

The burgeoning interest in musical instrument manufacturing has also drawn several Western companies to Wuqiang. To date, there are three big Western musical instrument companies in Wuqiang that have invested about $729 million.

Among them, the under-construction project from GEWA, a large German company founded in 1925, is the biggest. The company plans to invest 1.56 billion yuan to build factories in the zone, which can produce 200,000 sets of drums, 150,000 sets of electronic drums, 100,000 guitars and other products every year.

"The project will allow the company to provide products for 150 companies in China, and the annual output value will be about 3 billion yuan," Yu Shaofeng, the management committee deputy director, says. "The output value this year is expected to be about 500 million yuan."

The first phase of the project started pilot production last year, and the entire project is expected to be complete by 2015.

However, there are also signs that like the rest of China, Wuqiang is also looking to move up the value chain by shifting to high-end products. Chen Xuekong, the manager from the Jinyin Group, says that most of the products manufactured in the county are low-end products, more suited for training process.