Modern Montessori International (MMI) is planting preschools across the world, and it's not child's play.
MMI's chairman and CEO, T Chandroo, told The Business Times that the company's bold expansion plans - especially in emerging markets like Vietnam, Myanmar and Cambodia - could one day take the group to a stockmarket listing in London.
"I think there's a good chance for me to look at a listing in three years . . . In fact, I've been approached by people from the UK to have MMI listed in London. So if I list it, it will most likely be (there)," revealed Dr Chandroo in an hour-long interview recently.
While three years is still some time away, the scent of a possible listing is indicative of the potential MMI sees in the global preschool market - particularly in this region.
"Just look at the demographics in Vietnam," said Dr Chandroo, who noted that 70 per cent of the country's 100 million-strong population are under the age of 35.
"These people are young, educated, doing well, and either already have kids or are planning to have them. The potential is huge."
Even though MMI's high-end childcare offerings are unlikely to reach the mass market, he estimates that Vietnam's major cities - which MMI is targeting - have a preschool market potential of about US$50-100 million a year.
To capture its share of that pie, MMI has bought 20,000 square feet of land to build a preschool in Binh Duong, a rapidly growing province north of Ho Chi Minh City, where two Vietnam Singapore Industrial Parks are located.
The three-storey facility marks MMI's first foray into Vietnam, and will open in October next year.
Dr Chandroo says the company will start to see returns on its S$2 million investment in 4-5 years, after the centre hits its maximum capacity of 400 children.
"Singapore is a very small market and you have to work with a lot of limitations - for example, the manpower crunch that's going on right now. We have to look overseas because revenue has got to come from elsewhere," said Dr Chandroo.
MMI is one of Singapore's largest commercial operators, with 28 centres here. It has about 100 preschools and teacher training centres worldwide in 14 other countries, including Hong Kong, Egypt and India.
Dr Chandroo is setting his sights on Myanmar and Cambodia next, as part of his plan to build up MMI's regional revenue streams before a possible listing in three years.
Much of the draw for an expansion into emerging markets comes from the "significant" cost savings to be had. "Staff costs are very high (in Singapore). Over there, we could save up to 50 per cent on that front," said Dr Chandroo.
"Rent here has also gone up, and leases aren't too long-term. After about nine years, you have to look for a new place."
In contrast, MMI's lease for its Binh Duong school will last for 35 years. The longer time frame makes it easier for Dr Chandroo to dream big - he plans to offer primary and secondary school education in Vietnam further down the road.
But for a service-oriented business like preschool education, overseas expansion also brings more nuanced challenges.
"Setting up a preschool is so different from setting up a factory. For a factory, you just find a piece of land, put up a building, buy a piece of machinery, and run it. With preschools, you're dealing with kids, so the human touch is important," noted Dr Chandroo.
One concern is finding - and later, retaining - skilled teachers and administrators from within local populations. To ensure that uniform standards are upheld across borders, MMI plants a team of Singapore staff in its new centres for the first year or so, to build up capacity and train local teachers.
In Binh Duong, Dr Chandroo also expects "teething problems" in areas like cash management: "In Singapore, the finance part is easy, because everything is through Nets. (In Vietnam), there is no such thing - it's really a cash society. So cash handling could be a nightmare, and we have to make sure that everything is properly accounted for."
At present, the MMI group has a headcount of 500 staff in Singapore, and another 500 abroad. It sees a yearly turnover of more than US$35 million; 20 per cent of this comes from overseas markets.
"We want to grow that percentage to at least 40 per cent," said Dr Chandroo. "Our global revenue, our headcount - that's all going to increase."
Having been in the preschool business for over 20 years, Dr Chandroo believes the conditions are now right for an aggressive expansion into the region.
"I think 20 years ago, this part of the world - including Singapore - just wasn't so aware of the importance of early childhood education.
"I wouldn't use the world 'lucrative' to describe the potential out there, because it can be misinterpreted as exploitation, or making a quick buck. But I think if you provide good service and quality education, people are willing to pay. And that's different from 20 years ago."