Firm Strikes Right Chord With Guitars : Trends: The revival of acoustic music is driving foreign producer’s sales to a supplier in the U.S.

Thousands of miles from America’s nightclubs and recording studios, a small Finnish company is cashing in on rock music’s latest revival: the acoustic guitar.

Last year, the Landola company sold 10,000 guitars to Peavey Electronics Corp. of Meridian, Miss. And Landola wants to remain Peavey’s sole supplier of acoustic guitars, which had their first heyday in the 1960s.

By 1998, this small company in northwest Finland expects to reach an annual production of 60,000 guitars, with 90% going to Peavey.

“You can sell more cat food than guitars in the world, but I’m not complaining,” says Caj-Ola Hoglund, Landola’s managing director in Pedersore, a village 285 miles north of Helsinki. “We’re expanding fast, thanks to Peavey.”

Landola is a rare success story in Finland, where the worst recession in 50 years has created 17% unemployment and led to thousands of bankruptcies, particularly among small businesses.

Five years ago, Landola was struggling with 20 employees making a few hundred cheap, nylon-string guitars a month. Now, its 56 workers monthly churn out 1,500 quality, steel-string, acoustic guitars that sell faster than the company can make them.

“We were lucky,” said Hoglund. “You know, the right place at the right time.”

He recalls a groundbreaking visit to New York in December, 1993--with 12 guitars under his arm.

“It was a real sweat. Taxi drivers, bellboys and doormen couldn’t believe their eyes,” Hoglund laughs. “I gave astronomical tips.”

That visit convinced Peavey, and from then on it was sweet music all the way to the bank.

“The Landola’s a damn fine guitar,” said Hartley Peavey, chief executive officer of Peavey Electronics Corp. “We could sell many more,” he said, speaking by telephone from Mississippi.

Landola’s success has been boosted by a revival of acoustic guitar music in the United States, partly influenced by MTV’s popular “Unplugged” series of acoustic sessions by rock stars.

“Acoustic music is really booming,” Bill Flanagan, editor of Musician magazine, said in a telephone interview from New York.

“A guitar player likes to have the option of playing by himself,” Flanagan said. “That means almost always playing acoustics.”

About 500,000 guitars are sold annually in the United States, two-thirds of them acoustic.

“All major artists now want an unplugged album,” Peavey said. “It’s good news for us.”

He declined to discuss sales figures but said his company retails Landola guitars under the Peavey name for about $500 each, the price of a “good quality” guitar.

This year, Landola is expected to triple turnover to $3.3 million. When its factory expands to 90 workers by 1998, turnover is projected to hit $14 million.

Landola guitars are handmade from European Alpine spruce, a denser and stronger wood than the Sitka spruce found in America. “The Landola has such a good tone. The Alpine spruce has a marvelous ring to it,” Peavey said.

Hoglund believes Landola would do well even without Peavey. “Sure, Peavey is important, but I’m certain we would’ve found markets elsewhere.”

In Finland, about half the 10,000 acoustic guitars sold annually are Landolas. About 5% of the company’s output goes to Europe, mainly the other Nordic countries.

Selling guitars keeps Hoglund busy. “I like listening to the blues, but I don’t get much of a chance to do that.”

And, he has a little secret:

“I don’t play the guitar.”