North Korean Economy Watch

UPDATE 6 (October 15, 2010): The restaurant has opened a second branch in the Kaeson Youth Park.  This Voice of America article reports on the restaurant’s popularity and offers a bunch of other information that I do not necessarily see at accurate.

UPDATE 5 (November 29):  The origins of the project were featured in a recent article in the Straits Times:

It began two years ago when Mr Quek, managing director of the Aetna Group, which deals in metal and minerals, was approached by his North Korean business partners to invest in the country.

His company has been trading with the North Koreans in steel and minerals for more than 25 years.

Mr Quek then roped in his business friend Mr Tan, whom he had met eight years ago in Shanghai.

Together, they set up Sinpyong International to invest in North Korea.

Asked if he was worried about investing in North Korea, Mr Tan admitted that he prepared himself mentally for red tape.

Initially, the two men mulled over business ideas such as opening a supermarket. But after market research, they were drawn to the idea of a fast-food restaurant.

‘There was nothing like that there at that time. It was probably the only country in the world that doesn’t have fast food,’ said Mr Tan.

Despite neither of them having any experience in the fast-food business, the pair quickly got down to work.

They roped in a third person, Mr Patrick Soh – who holds the franchise in several Asian countries for Waffletown USA – to help them set up the operation and train the local staff in Pyongyang.

Waffletown USA is not a big regional player and it currently has only two franchise outlets in Singapore, in Balmoral Plaza and in Ngee Ann Polytechnic.

Samtaesong, however, is not a Waffletown franchise, Mr Quek stressed. ‘We borrowed the concept and menu, and tapped Mr Soh’s expertise, but it’s not a Waffletown franchise,’ he said.

Early this year, a four-man team from North Korea discreetly came to Singapore to sample the fare at the Balmoral Plaza outlet in Bukit Timah.

‘They tried the food and especially liked the waffle, burgers and fried chicken,’ said Mr Soh, 56, beaming.

Mr Quek said the restaurant’s site was picked by his North Korean business partners. Located in the heart of Pyongyang, it is next to a subway station and within walking distance of various universities and foreign embassies.

In November last year, the Singaporean partners began making trips to North Korea to set up the 246 sq m restaurant. It occupies one floor in a twostorey building and can seat about 80 people.

Furniture, styled after fast-food joints in Singapore, was shipped in from China.

Kitchen equipment and ingredients, such as the seasoning for the fried chicken and the waffle mix, were flown in from Singapore.

The beef and the chicken are sourced in North Korea, while a local factory supplies the burger buns and patties according to Mr Soh’s recipe.

In all, Mr Quek and Mr Tan spent about US$200,000 (S$276,500) to set up the shop.

Mr Soh let on that the menu was modified to appeal to North Korean tastebuds. For instance, the side dish coleslaw was substituted with kimchi, the

spicy pickled cabbage popular among Koreans. The burgers also come with more vegetables.

‘They don’t like the idea of junk food, so we made the menu more healthy,’ Mr Soh said.

Local draught beer is also served along with soft drinks like Coke.

The restaurant has 14 staff members, mostly young women, who don colourful aprons while flipping burgers and cooking french fries.will promote tourism in northeast Asia.

Download a PDF of the Straits Times article here.

Read previous posts about this restaurant below:

UPDATE 4 (October 13): Samtaesong is looking to expand:

“There is a potential to develop this business over there,” said Patrick Soh, who is bullish on the prospects of fast food in the isolated Stalinist state better known for famines than deep-fried delights.

Soh, 56, holds the franchise in several Asian countries for Waffletown USA, a relatively obscure brand in the region compared to the likes of McDonald’s, KFC, Pizza Hut and Burger King, but he has big ambitions.

The first branch of Samtaesong (“three big stars”), as Waffletown is known in North Korea, started operating in May after Soh’s company got the first license awarded to a foreign fast food outlet.

Burgers, called “minced beef and bread” to mask their American association, are the biggest attraction at the eatery, which also sells fries, crispy Belgian waffles, fried chicken and — the latest addition — hotdogs.

“It is not only the locals who enjoy the food. Even the foreigners like the food,” Soh told AFP in an interview at a Singapore outlet of Waffletown.

Soh will make his fourth trip to Pyongyang this month to explore the feasibility of opening a second outlet there.

If all goes smoothly, it should be up and running in early 2010, said Soh, who is not deterred by problems like power outages and the unavailability of some items in Pyongyang.

His North Korean adventure started when he was approached last year by a Singaporean investor, who broached the idea of setting up a Waffletown franchise in Pyongyang.

Soh declined to name the investor or say how much it cost to open the Pyongyang eatery, saying his main role was to set up the operation and train local staff to run Samtaesong.

A North Korean delegation paid a visit to Singapore early this year to sample the fare at a Waffletown outlet.

“They came and tried the food and liked the waffle, burgers and fried chicken,” Soh said over coffee at the outlet, located in an upmarket neighborhood near Singapore’s Orchard Road shopping belt.

“They find that we have a bit more variety than other typical burger chains and that we don’t sell junk food,” he said.

Soh made his first trip to Pyongyang in November last year, taking four days to survey the site and see whether the fast food concept was workable in one of the world’s few remaining communist states.

He was pleased to learn that the site was in a choice location in downtown Pyongyang, right next to a subway station and within walking distance of various universities.

He went back to Pyongyang in December to begin preparatory work for the opening of the eatery, from arranging the layout of the restaurant to listing the kitchen equipment and ingredients that needed to brought in.

The seasoning for the chicken and the waffle mix are among items imported from Singapore but other ingredients like beef and the chicken itself are sourced locally, with suppliers using his recipes for the burger buns and patties, Soh said.

The eatery buys soft drinks from shops that cater to the diplomatic community and resells the beverages in paper cups.

Local worker are very intelligent and eager to learn, Soh said.

“I don’t need to spend much time to train them. I take about two, three days and they have a grasp of the work.”

Since Samtaesong opened its doors in May, customers, including foreign students from China and Russia, have been streaming into the 246-square-metre (2,647 square foot) outlet, he said.

“The locals come in and know the food that they want to order,” said Soh.

Prices are set in euros, but US dollars are accepted as payment.

A “minced beef and bread” costs 1.20-1.70 euros (1.77 to 2.50 dollars) and about 300 are sold each day, said Soh.

The most expensive item on the menu is the crispy fried chicken at slightly under three euros.

Read the full story below:
‘Minced beef and bread’ a hit in North Korean fast food joint
AFP
Bernice Han
10/11/2009

UPDATE 3 (Otober 12):  “Samtaesong” translates into English as “Three big stars.”  This name probably probably refers to the “Three stars of Paektu” which is a title which collectively refers to Kim Il-sung, Kim Jong-suk, and Kim Jong-il.UPDATE 2 (August 28):  KCNA reports business is good!

Fast-food Restaurant in Pyongyang
Pyongyang, August 28  — The Samthaesong Soft Drink Restaurant located in Moranbong District, Pyongyang is crowded with Korean and foreign customers.

It serves more than 20 kinds of dishes including burgers, waffles, French fries and crispy fried chicken along with soft drinks.

It was opened at the beginning of June last. Most of the tables are arranged by the semicircle windowed wall so that the customers can take food, looking out the street through windows.

It instantly cooks and serves dishes to the customers as they demand.

Manager Ko Jong Ok told KCNA that the restaurant will make world-famous foods with local raw materials to the taste of the Korean people.

UPDATE 1 (July 26): rough translation of the Choson Sinbo article in the comments.

The Choson Sinbo tells us this week that a new “fast-food” restaurant opened in Pyongyang last May.  This story was subsequently picked up by the global media.

The restaurant is called “Samtaeseong Restaurant,” and according to the Associated Press:

The Singaporean company, which the newspaper did not name, provided training to restaurant staff and supplied equipment.

The restaurant’s interior appears to be styled after fast-food joints the world over, but the menu is careful not to call its signature fare a hamburger — lest it give the impression North Koreans had embraced the American icon.

But this is not the government’s first foray into foreign food. In March, the Choson Sinbo, widely considered a mouthpiece for the North Korean government, reported that Kim — a noted gourmand — had ordered the opening of the country’s first Italian restaurant. The chefs there were trained in Italy and food made with imported ingredients was served.

The minced beef and bread at the new fast-food restaurant costs only $1.70, the newspaper said, but that would eat up more than half of the average North Korean’s daily income. South Korea’s central bank put last year’s average per capita income at $1,065.

The restaurant also offers kimchi — Korean pickled cabbage — as well as waffles and draft beer. It plans to add croissants and hot dogs to its menu in the coming months but with Korean names, and will open another branch in the capital soon, according to the newspaper.

Photos of the restaurant:

         

Further info:

1. My amazing translator (G) has added a rough translation of the Choson Sinbo article in the comment section below.

2. Here is the location of the new restaurant (in Wikimapia)

3. Here is the location of the previously opened Italian Restaurant (in Wikimapia).

4. More from the Daily NK.

Read the full article here:
Report: NKorea Opens 1st Fast-Food Restaurant
Associated Press
7/25/2009

This entry was posted on Tuesday, December 1st, 2009 at 8:20 am and is filed under Food, Foreign direct investment, Joint Ventures, Restaurants, Singapore. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.