LONDON — South Africa’s premier exhib, Ster-Kinekor, is expanding into Europe with a plan to build 30 multiplexes over the next three years. The move represents a $150 million investment and is the company’s first major foray outside its home turf.
Seven sites are already confirmed. Two 16-screeners — one in the greater London area and one in Dublin — have been greenlighted and are skedded for completion by July 1999, with an additional four multis planned for Britain.
Ster-Kinekor’s international operations will be headed up by managing director Mike Ross, who will be based in London.
Ster-Kinekor has also formed a nonexclusive strategic alliance with British property developer Stannifer for complexes in and outside the U.K.
The other markets Ster-Kinekor is targeting are Poland, the Czech Republic, Hungary and Greece. A 13-screen plex is set to be built in Warsaw, as well as an eight-screener in Lodz (both due October 1998).
Another 10 Polish sites are under consideration.
In the Czech Republic, a 12-screener is confirmed for the eastern city of Brno (due October 1999) with a possible four additional multis in the cards.
The company also has plans for a 13-screener in Budapest, which is described as being in “advanced negotiation.”
In Greece, where Ster-Kinekor first initiated operations a year ago, the company has a joint venture with the local distrib Digital Multiplex. A 10-screen site is a go for Athens, as is an eight-screener in Thessaloniki. Both will be completed by October 1998.
Ster-Kinekor’s international division, Ster-Kinekor Europe, is majority-owned by South Africa’s largest listed entertainment and leisure group, Kersaf Investments.
Ster-Kinekor’s controlling owner in South Africa is the media group Primedia, which bought 80% of Ster-Kinekor’s South African operations late last July for $323 million. Kersaf retained majority control of the international operations.
Although plexing is in its infancy in Eastern Europe and Greece, the U.K. is already well-developed. Ross, however, points to new research indicating that the U.K. is capable of absorbing an additional 2,000 screens.
The company is still determining what cinema brand its overseas business will use. While the name Ster-Kinekor will probably be retained on the continent, the U.K. market demands a more accessible brand. “Star” is an option under consideration (“ster” means “star” in Afrikaans).
Ross admits that establishing the brand with consumers will be difficult in the face of big name rivals such as Virgin and Warner Village, but he says he is working toward making Ster-Kinekor “the first-choice brand for developers across Europe.”
In South Africa, the company holds 75% of the exhib market, distributes Fox, Columbia and Disney, and has 50% of the distrib market. In total, it owns 58 multis in the country, many of which are state-of-the-art, and many of which have been visited by European developers.
The decision to step out internationally was prompted by the current saturation of the South African market, which is limited by economic realities. Although the country’s population is 38 million, only 8 million people can afford to go the movies.