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BW Businessworld

Brush With Realty

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One hour from Mumbai, then a 20-minute ride on the Mumbai-Pune Expressway from Panvel, exit at the Khalapur toll plaza and then 3 kilometers down a village road. In the middle of nowhere, nestling at the bottom of a set of virgin hills, is a flash of colour, roller coasters and gigantic amusement machines. ‘Welcome to Imagica’, say huge signboards. It is Manmohan Shetty’s latest venture: a theme park.

The Imagica headquarters, a close resemblance to Disneyland’s Cinderella castle, looms large on a hill and provides the backdrop for the park. There are elements of Disneyland everywhere. Painters are still giving the final touches to a huge façade of Snow White and the Seven Dwarfs. Rubble dots the campus. But Adlabs Entertainment’s Director Kapil Bagla insists the park is ready for commercial opening in a few days: “If we don’t get the kids this summer, we will lose another year.” (Since that meeting, the park has opened.)

It’s been a long and hectic journey for the film producer and multiplex exhibitor. Two weeks after the Ambani brothers split in mid-2005, Shetty sold his 66 per cent share in the highly profitable Adlabs for Rs 337 crore to Anil Ambani. The treasure trove included India’s largest film processing facility and a 51 screen multiplex chain. While Ambani went on to rebrand Adlabs as ‘Reliance Media Works’, Shetty set up Walkwater Media as a film production and content venture. Somewhere along the way, Shetty decided film production was not for him and set out to bring theme parks to India.

Changing Gear
For long, Shetty avoided the media glare. He teamed up with Shekhar Kapur, dabbled with television content, and even produced a few movies. Some — Raajneeti and Tere Bin Laden both released in 2010 — did quite well. Then he turned to building a theme park. He kept it under wraps. With Imagica up and running, Shetty is ready to retrace his steps and talk about how it all happened. Sitting in an air-conditioned makeshift cabin at the edge of the theme park, Shetty says that he had, for long, seen a business opportunity in theme parks. “I proposed diversifying into theme parks in 2005 after Anil Ambani took over Adlabs. But the board declined. Their focus then was on growing multiplexes and producing movies.”

NO DRAMA: Manmohan Shetty is no longer interested in the moviemaking business

Shetty left the Anil Ambani board after the two-year handover period came to an end in 2008. In the meantime, he had set up Walkwater Media to finance films and other entertainment content. But his experience was disappointing. “By then the recession had set in, and there was just no money,” he laments. More than that, film production had become unviable over the years with exhibitors demanding a lion’s share of the box-office income. “Look at Ramesh Sippy. He couldn’t release his latest Nautanki Saala, because multiplexes wanted 52 per cent in the opening week. The three multiplex chains are the new mafia. If I don’t have five films for release, they won’t look at me. They don’t need me anymore. Ajay Devgn and SRK are the new producers. They have enough moneybags to back them.” He concedes that an arid financial climate drove him out of the film industry. “If I had raised Rs 100 crore for my next film, perhaps I would not be sitting at this theme park,” Shetty says wistfully. Then he adds: “After 40 years in films, I don’t want to be in that industry anymore.”

By 2009, the land had been identified in and around Sangdewadi village, off the Mumbai-Pune Expressway. About 300 acres were acquired from farmers and aggregated bit by bit, and funding and permissions were secured. The initial  PwC report put the project cost at Rs 4,500 crore, Shetty discloses. This was considered over-the-top and later brought down to Rs 2,200 crore. That too was found excessive by banks. It was finally trimmed to Rs 1,650 crore. Union Bank was the lead financier and the debt and equity (Shetty’s) ratio was fixed at 2:1.

“The project includes the main theme park spread over 90 acres; the yet-to-be-built water world on 25 acres, and a 300-room hotel for those intending longer holidays. The water world will come once we get a few PE partners,” says Shetty. The theme park will also open up opportunities for developing real estate and resorts on the surplus land, once the theme park gets going, he adds.

Going International
Imagica has two things going for it: speedy execution, and the international experience that the promoters want to bring in. Sitting in their makeshift cabins and tents, the Shetty family has personally driven the first phase of the project to completion in two years. Shetty, between visiting and learning from Disneyland in Paris and Universal in Singapore, has spent most of his hours trudging the site, and personally supervising construction operations. Daughters Pooja and Aarti, too, have been hands-on in operations and creatives. “We have been doing ‘microbiology’ with the project,” jokes Shetty.  “The first 20 crore was invested in building our own water treatment and sewage plant and a power sub-station. We have not seen a single official at the site. We have had no infrastructure support from the government. Seeing its response, the tourism ministry might as well wind up,” he complains. Imagica has even had to develop an elevated lake to harvest rainwater for the project.

Shetty calls Imagica the country’s first true-blue theme park. There are carnivals with a roller coaster and the giant wheel; and there are large amusement parks like Worlds of Wonder in Noida that have more rides and restaurants. But a theme park gets its character from the ‘attractions’ and rides that bring stories to life. For this, the Shetty has teamed up with international firms that create the hardware and technology for these themes. On the busy site, we met up with David Sisio from Sally Corporation of the US who is putting the last nuts and bolts into place for ‘Alibaba and the 40 Thieves’. A half a kilometre ride on simulated ‘camel cars’ takes one through deserts and Arabian markets; and the rider scores points by downing ‘thieves’ who spring and shoot at him from all sides. Alibaba is obviously a modification of Disneyland’s ‘Pirates of the Caribbean’; it has all the thrills and the safety standards too.

Similarly, Amsterdam-based E2M is doing a theme ride, ‘Mister India’ — a thinly disguised modification of Disneyland’s ‘Indiana Jones’. Meanwhile, Swiss firm BNM is setting up India’s largest roller coaster. There are some spine-chilling horror shows too, such as The Curse of Salimgarh (yet to be commissioned). One such blood-curdling experience has been promised by Contour Corp of the US that has the turnkey contract to set up Wrath of the Gods. 

Besides the

21 rides spread over 80 acres of undulating landscape, the park also offers five restaurants, including the American-style diner ‘Red Bonnet’ and the ‘Armada’ bar built as a pirate ship overlooking a lake. “The consultants told us we were crazy doing the food ourselves,” says Pooja, on site in her summer best. “When we did not go to Disney to do the park, why should we go to a McDonald to get our burgers right,” she says. 

Will It Work?
The Shettys have sunk in Rs 1,100 crore into the project, and they are hoping the crowds will come. But everybody is not as gung-ho about theme parks as a lucrative business. Some also question whether $305 million, the project cost of Imagica, is good enough to make it an international experience. Shetty concedes that Universal in Singapore had invested $1.2 billion.

But Shetty’s enthusiasm is not shared by theme park pioneer Walt Disney Company. Speaking to BW in Mumbai about the market in India, Andy Bird, president of Disney International, said: “Let me for the record clarify: we have no plans for a Disneyland in India. Not now, not later.” He said the level of purchasing power required to run as complex an operation as a theme park did not justify such a huge investment.

 “There isn’t a business like a theme park. It is very complex. People in their thousands don’t stop coming. It is very capital intensive.” Bird pointed out that Disney’s latest and sixth outpost expected to open in 2015 (Disneyland Shanghai planned over 963 acres and 3 times the size of Hong Kong Disneyland) was sucking in investments of $5 billion — excluding infrastructure costs. Hong Kong Disneyland currently handles 8 million visitors annually and can go up to 10 million. Esselworld, in Mumbai’s north west suburb of Gorai, draws in 2.5 million a year with a ticket price of Rs 700. Adlabs Entertainment, that owns Imagica, with an average Rs 1,400 per entry, is targeting 3 million; but Shetty figures 2 million visitors a year will make the Indian park viable.

Adlabs has also acquired 60 acres in Hyderabad from a local developer and will soon be announcing its plans of opening a theme park near the city’s new airport. Goa, with a large tourist population, is next on the radar. 

However, Kapil Bagla, director of Adlabs, agrees that it is a tough environment. Governments elsewhere are either equity partners in theme parks or offer infrastructure support. A special train station was built for Disneyland Paris, while the government is a partner in the Shanghai project. “In our case, we still have no approval for improving the access roads even though we have offered to spend the money,” says Bagla.

Despite all this, Shetty is optimistic. “China’s Shenzhen supports 5 theme parks and all are doing well. It is a question of culture. In India it’s a matter of time before things go the same way,” he says.


(This story was published in BW | Businessworld Issue Dated 17-06-2013)