•    HOME   
•    NEWS   
•    BUSINESS   
•    INTERNATIONAL   
•    TECH   
•    SPORTS   
•    LIFE & TIMES   
•    OPINION   
•    MY JAKARTA   
•    BLOGS   
•    EYEWITNESS   

Lotte Cinema may have expressed interest opening up theaters in 100 locations across Indonesia, but the South Korean operator still has a long way to go before realizing that, officials said on Tuesday.

Lotte Cinema, a unit of South Korean conglomerate Lotte Group, has expressed interest in entering several district and municipalities in the country in the past year, said Syamsul Lussa, from the Ministry of Tourism and Creative Economy.

“Lotte sees the business opportunity there, especially when they consider our demographic,” Syamsul said.

A population of about 240 million with growing purchasing power is a magnet for foreign investors, experts have said.

Lotte has been aggressive in entering the Indonesian market. Starting with chewing gum products that have been produced domestically since 1994 in a partnership with cigarette maker Gudang Garam, it followed in 2008 with its hypermarket chain LotteMart buying Supermarket Makro, which had 19 branches at the time.

In November 2010, Lotteria, a burger shop chain, signed a partnership to open branches in the country.

However, Lotte Cinema still has much to do before even beginning to build its first movie theater here, Syamsul said.

Under the 2010 Presidential Regulation on Negative Investment, foreign investors wishing to enter “art performing facilities” are only allowed to have a 67 percent stake.

“It means that the regulation does not allow Lotte Cinema to enter as a full-fledged Korean company. If they want to enter now, they have to be happy with owning part of the business and not the whole capital,” Syamsul said, adding that Lotte had to look for a local partner first.

The Investment Coordinating Board (BKPM) said in early December that the film industry could be removed from its negative investment list, opening it to foreign direct investment, but no timetable has been given.

The Tourism and Creative Industry Ministry also wants to open up the country’s movie screening industry to foreign companies, but only gradually.

Syamsul warned that under the World Trade Organization’s Central Product Classification code on goods and services, the country had until 2020 before it had to open the cinema sector to foreign investment.

Lotte Shopping in Seoul, the parent company of Lotte Cinema, did not respond to inquiries from the Jakarta Globe.

Indonesia’s cinema industry, with approximately 200 cinemas  boasting some 670 screens, has two key players, industry giant 21 Cineplex and relative newcomer Blitz Megaplex.

Blitz Megaplex marketing head Dian Sunardi Munaf welcomed the news as good for customers, “so that they have many choices of enjoying a movie.”