HO CHI MINH CITY -- CJ CGV Vietnam, a subsidiary of South Korea's CJ Group, opened its 50th cinema in Vietnam on Thursday in Ho Chi Minh City, expanding its screening facilities in the country to 313 studios and 42,800 seats.
The South Korean investor said it planned to invest some $200 million in the next four years to upgrade and expand its screening system in Vietnam, including in second tier cities and remote areas.
CJ CGV Vietnam started operating cinemas in Vietnam six years ago after acquiring MegaStar, the country's largest cinema chain at the time, for $73.6 million. The South Korean group's local arm is now Vietnam's largest film distributor and cinema operator and posted 1.8 trillion dong ($79 million) in revenue last year, up 3.3% year-on-year, and 93 billion dong in profit, which was almost triple the level the previous year.
Dong Won Kwak, general director of CJ CGV Vietnam, said that the local the local entertainment market's high annual growth rate, which has been estimated at more than 20%, offered huge potential for investors and justified the company's investment, which is far higher than its annual profits.
Related businesses are vying with each other to find the best ways to maximize cinema talent and other resources to develop the local movie market, including arranging film-making workshops and investing in movie projects.
CJ CGV Vietnam expects to open between 12 and 15 new cinemas a year, at a cost of $4 to $7 million each.
In May, the biggest cinema operator in Vietnam also opened its ScreenX immersive technology studios in Hanoi and Ho Chi Minh City, the first such facilities in Vietnam.
The technology, developed by CJ CGV, offers a 270-degree cinematic experience and has been used at more than 100 theaters in Korea, China, the U.S., Thailand, Indonesia and Turkey.
CJ CGV Vietnam is testing some other technologies for large screens, and expects to introduce new services in Hanoi and Ho Chi Minh City in the next few months, as a part of its total investment of $70 million into Vietnam's screening market this year.
Dong Won Kwak told reporters at the launch of the new facility that with a population twice the size of South Korea's, and the increasing popularity of cinema-going, Vietnam has a lot of development potential over the next decade.
The Vietnamese box office, with some 140 cinemas, generated revenue of $130 million last year, and expects to increase this to around $200 million next year. A local survey showed than 55% of Vietnamese people go to the cinema at least once a month, and spend an average of $4.04 per person.
The market is currently dominated by foreign enterprises including South Korea's CJ CGV Vietnam with 43% share, compatriot Lotte (30%), and Indonesia's Platinum Cineplex (10%). The two local operators, Galaxy and BHD Star Cineplex, have 9% and 6% respectively.
However, Platinum Cineplex closed its three most profitable facilities in Hanoi in the first quarter, due to disagreements with Vingroup, the owner of the cinema buildings, which is likely to result in a drop in the company's market share and revenue this year.