With 60% of its 84 million population below the age of 30, Vietnam offers huge potential to international exhibitors. But the biggest challenge is galvanising the audience into film-going.

Vietnam's cinema business has been held back by piracy, poor facilities and the late arrival of titles into the market. 'Young couples would never automatically think of movie-going for the weekend,' says veteran US exhibitor J Edward 'Ted' Shugrue.

Shugrue is the man trying to convince them, by introducing the multiplex to Vietnamese audiences. He first considered moving into Vietnam in the late 1990s as president of the US's Loews Cineplex. But plans did not get off the ground as the company's other international ventures materialised and flourished - Yelmo Cineplex became Spain's most profitable circuit and Korea's Megabox Cineplex became the world's most successful in terms of cinema attendance.

In hindsight, Shugrue admits 'it would have been too early. Now it's a much better time as Vietnam is following China's fast development. With enough investment in real estate, locations (such as shopping malls) are beginning to be built. It's very difficult to do freestanding buildings because land ownership is not easy to achieve. We'd rather sublet.'

After leaving Loews, Shugrue finally moved into Vietnam two years ago with MegaStar Media, a joint venture between Shugrue's Envoy Media Partners (which owns 80%) and local publishing group, Phuong Nam (20%). At the time, the emerging Vietnamese market was served by only 90 screens.

MegaStar has opened four cinemas, totalling 30 screens, since the launch of its first in the capital Hanoi in April 2006, making it Vietnam's largest cinema chain. The Hanoi eight-screen multiplex, with 1,100 seats, has also become the country's highest-grossing cinema.

To run a successful cinema business, Shugrue - who was president of Columbia TriStar in the US for a decade - believes you must have a concurrent distribution business. To this end, MegaStar handles UIP, Disney and Sony titles in Vietnam.

The titles distributed by MegaStar and released in both its own and other cinemas grossed close to $4m in the first 16 months of operation.

The top earners were the second and third Pirates Of The Caribbean films and Spider-Man 3, which each raked in around $360,000 apiece, followed by Mission: Impossible III and Mr Bean's Holiday.

'The studios are willing to work with us as they can see the untapped potential here,' says Shugrue. 'But one can only put so many potatoes in a four-pound bag - a major title can only go out in no more than 15 first-run theatres. We'll continue to develop and grow the business.'

MegaStar has two more multiplexes under construction, and another four are in the final stage of negotiations. By 2008, its number of sites will be doubled to eight and its screens to around 60.

The company works closely with the government over censorship and, where necessary, edits titles with the studio's permission. No-goes include anti-Communist themes, pubic hair and what are classified as dubious moral values (Wedding Crashers was banned as a result).