South Korea’s Lotte Cinema is planning to invest up to $30m in construction of six cinemas, designed for 30 digital cinema screens, in Russia’sFar East region by 2013.
New cinemas are expected to be opened in largest cities of the region, such as Vladivostok, Khabarovsk and Blagoveshchensk. Payback period of the project is estimated in 6-8 years.
Earlier this year Song Kwang-Ik, head of Lotte Cinema, announced the company’s plans to expand into new markets, including Russia. Sources close to Lotte Cinema said the company plans to start recruiting staff for its Russian cinemas at the beginning of next year.
In addition to Far East, by 2015, Lotte Cinema is considering expanding into central Russia (including Moscow and St. Petersburg), where the company plans to open up to five cinemas, designed for 12-20 screens. However those plans will depend on the profitability of the Far Eastern sites.
Russian analysts believe that Lotte Cinema has a good shot at success. At present none of Russia’s largest cinema chains have a strong presence in such a remote region as the Far East, due to lack of modern retail centres, which are usually considered as an ideal location for multiplexes.
At the beginning of July 2010 there were 49 cinemas with 80 screens, of which only 30 were digital screens, compared to neighboring Siberia’s 270 and 56 respectively (according to Nevafilm Research).
In 2002 the US National Amusements Company established its Rising Star Media, which developed a local Kinostar de Lux cinema chain (3.3% market share).