Sakae Sushi to open in Moscow

DOUGLAS FOO, founder and chief executive of Apex-Pal International, has been doing his homework and laying the groundwork in the past three years to start a sushi chain in Russia. His efforts are about to bear fruit.

Mr Foo expects to open his first Sakae Sushi restaurant, already a household name in Singapore, in Moscow next year. He expects to pump in $1 million to get two to three outlets off the ground first.

'It's not an easy market, partly because of its language,' Mr Foo says over lunch at Hibiki, a high-end Japanese restaurant his company owned. 'You got to be more patient with Russia.' And that's all the more so when a business licence takes six months or more for the Russian authorities to approve.

When Mr Foo first set foot in Moscow in 2003, he was impressed by the development and fast pace of life in the Russian capital. 'It was very much alive,' he says. Every year since then, Mr Foo has visited Russia.

He got to know the demography, the people and, in particular, the restaurant scene in the country. 'There was and still is no proper Japanese restaurant.' That was the clincher.

Also, Russians in Moscow, which boasts the third largest number of billionaires after America and Germany, are big spenders. 'They won't blink an eye when blowing US$100 on a meal. It's normal for them.'

Several Singapore businessmen with a presence in Russia have approached Mr Foo to set up shop there - and he is still talking to some of them and a few Russian government-linked companies about cutting a joint venture deal. Teaming up with the right partner who is familiar with the terrain, according to him, is critical.

'You can't over-emphasised this. It's almost a make or break requirement. Securing a good partner is important for most markets, but it's especially so for Russia.'

Unless one is prepared to uproot and move full time to Russia, Mr Foo says a Singapore business cannot go solo there. You need a Russian partner to hand-hold you in a fluid business environment where rules, licences and policies are still evolving, according to him.

But what's really holding Mr Foo back for now is to find a good location to open his restaurant. High cost - and prices are high in Moscow - is not a concern because, as Mr Foo says, he can always charge a high price to cover the cost. With the quick pace of development in the Russian capital, Mr Foo says there is simply not enough supply to meet demand.

He has already started hiring key staff for his restaurants, sending them to Singapore for training. 'The Russians are very adaptable. Many of them speak English and it is easier to get Russians to come here to learn and go back to manage, than for us to send Singaporeans there to manage.'

He is keen to move into the Russian market early to gain a first-mover advantage and reap the 'super-normal' profits found in a country's early stages of economic development. Perhaps even more significant, Mr Foo wants to use Russia as a stepping stone to break into the emerging markets of in Eastern Europe. 'Once you get into Russia, you can move around quite easily in the former Soviet states,' he says