MOSCOW – Yum Brands Inc. (YUM), parent of KFC, Pizza Hut and Taco Bell fast-food chains, and Russia's Rostik's said on Friday they were teaming up to invest about $100 million in a joint venture.
Rostik's (search), whose red and yellow signs of a chicken brandishing a knife and fork are a common sight around Moscow, belongs to Rosinter Restaurants (search), which owns or operates numerous restaurants including the Patio and Planet Sushi brands.
"We expect to invest close to $100 million over the next five years to support the development of some 300 co-branded Rostik's-KFC restaurants," Rostislav Ordovsky-Tanaevsky Blanco, chairman and CEO of Rostik Restaurants Ltd., told a news conference before the signing ceremony.
He said $30 million in loans and guarantees would be provided by Yum Brands to support the new venture.
Rostik's manages 80 restaurants in Russia and the CIS, while Yum Brands has 12 licensed KFC restaurants in Moscow and St. Petersburg.
Under the agreement, Rostik Restaurants will retain day-to-day operational management, and Yum Brands will provide strategic support through its experience in managing international fast-food brands.
Foreign firms are keen to gain access to Russia's 140 million consumers, who have more spare cash to spend as incomes rise.
"Russia is a great place to do business. We are in the right place at the right time," said David Novak, chairman and CEO of Yum Brands.
Ordovsky-Tanaevsky Blanco denied local media reports that Rostik Restaurants wanted to sell its business. "We are not selling our business. We're developing it," he said.
Recent investors in the Russian consumer goods market have included British electronics retailer Dixons, which signed an option to buy fast-growing Eldorado Group by 2011 for a fixed sum of $1.9 billion, and Ketchup maker H.J. Heinz Co. (HNZ).