COMMUNITY BASED LIVELIHOODS RECOVERY PROGRAM (CBLRP) FOR EARTHQUAKE AFFECTED AREAS OF AZAD JAMMU AND KASHMIR AND

NWFP

CBLRP-UNIDO

INVESTMENT OPPORTUNITY PROFILE FOR AMUSEMENT PARK IN NWFP

SEPTEMBER 2007

SUBMITTED TO AYESHA KHAN CHIEF TECHNICAL ADVISOR Community Based Livelihood Recovery Program (CBLRP) United National industrial Development Organization (UNIDO)

BY Sardar Shahid Farid Chartered Accountant

Disclaimer

All material included in this document is based on data/information gathered from various sources and certain assumption. Due care and diligence has been taken to compile this document. The document may contain human, mechanical error or non accuracy of the information at the source. No liability for error, or omission or unintentional misrepresentation will be accepted. We reserve the right to make correction and changes wherever desired in this document or its subsequent versions.

1.

PROJECT EXECUTIVE SUMMARY

1.1

PROJECT BRIEF The proposed project presents an investment opportunity in setting up an Amusement Park/Joy Land. The main service to be provided is joy rides and a pleasant atmosphere to the people visiting this facility. In order to attract a cross section of the population, a combination of eleven (11) different rides have been assumed in this document. This combination can however, vary according to the final site selection and amount of investment with the individual investor. In addition to joy rides, food and beverage stalls, advertisement sites, and car parking are other sources of revenue for this particular unit, however we have not accounted for them in our study. The project is proposed to be located at Manshera or in its surrounding giving easy access to the visitors. The target market is the population of the surrounding areas and the tourist. The region has access to all public amenities including water, electricity and telecommunication facilities. Capacity of the amusement park is calculated to be 27,864 virtual (tickets/rides) per day. The sale at 100% capacity utilization is Rs 27.5 Million. The project should be ready for operation in 06 months.

1.2

FINANCIAL SUMMARY Sales Gross Profit Margin Payback period Net Profit Margin before tax Internal Rate of Return
Joint Venture Loan Market access Sub contracting Buy back arrangement Equipment purchase

Rs 27,520,000 per annum 55% 2.61 Years 46% 48%

Management expertise Technical expertise Marketing expertise Technology transfer Joint R&D Other :-

Foreign collaboration sought

Studies Available

Feasibility study Other Specify

Project description

Date:

25 October, 2007

2.

PROJECT RATIONALE The opportunity of setting up the Amusement Park can be linked with the gap of amusement facilities existing in different areas of Pakistan, total population of a specific area requiring recreational activities and the spending capability of people in that area. According to Population Census reports & Bureau of Statistics (2004-2005), the total population of Pakistan is 18.64 million with 26 divisions and 104 districts. Out of these 104 districts, 53 districts have population under 1 million, 28 districts have population ranging between 1-2 million, another 16 districts have 3-4 million population, and only 2 districts have a population of over 5 million. This population however, includes both urban as well as rural areas. There are however, 11 districts in the country that has over 1 million urban populations. There are various amusement options available at various levels in the country. These can be grouped into Indoor and Outdoor categories. Indoor options comprise of Cable, Video Games (Play Station), DVD, VCD, etc. Outdoor can be classified as Parks, Zoos, Joy lands, etc. However, looking at the outdoor recreational activities, there are very few outdoor amusement parks in the country. This provides an opportunity for any investor that can design and implement a well researched amusement park in any major city of the country. Availability of local rides is the second factor that makes investment in this sector economically viable. Local fabrication and design ensures that repair, maintenance and operational expertise are readily available at a competitive price. Any entrepreneur can either source the readily available local rides or can also design and custom fabricate its own rides from the local rides manufacturers. Branding/perception of the park (right mix of advertisement and promotion) of the park are very delicate job. The security of the park as well as the safety of the rides has to be up to the standard. In future provision of related facilities e.g. Mini zoo and/or Mini Park can be operated to earn the extra profit. There are also some points to considered and appropriate measures taken to deal with them e.g local customs and traditions, and non-availability of modern machinery in local market at cheaper rates.

3.

MARKET OPPORTUNITY Amusement Parks / Joy Lands fall under the Tourism Sector in Pakistan, which has recently been given the status of Industry . The Amusement Park/Joy Land is a facility that provides outdoor physical entertainment to people and therefore has a variety of competing factors. Some of the direct or indirect competing activities include cable, TV, Internet cafes, Internet or video gaming centers, water parks, cinemas and indoor as well as outdoor amusement parks. However, indoor and outdoor amusement centers are the major direct competing factors. Amusement park facilities in the country are still at a very primitive
2

stage with only a handful of competing private sector. In addition, to private Joy Lands in organized sector, every district in the country has its own public parks with few rides installed. These parks are normally contractual and charge highly subsidized ride rates. In addition to these, in most of the cantonment areas of the country, cantonment establishments are also renting out public land for establishment of amusement facilities. These are both competing forces as well as also provides business opportunities if, any investor can enter into a nation wide contractual arrangements with local or cantonment governments. It is therefore, expected that any investor entering into this sector, and should be able to mobilize a large number of visitors to the facility. The project aims to target a diverse range of visitors to its facilities. The mix of rides will ultimately determine the kind of guests who will visit the park. The proposed ride mix is a balance of rides with various thrill factors, and should be able to target population along the entire continuum of age group. The basic age classification of the target group is children, school going children and adults. A 13% annual increase in the number of visitors in expected for the proposed facility. 4. BUSINESS PLAN Latest state of the art amusement equipment is to be introduced. The best services will be provided. The project will define much of its own values as there is no competitor in the market. Possibilities are to be explored in future for similar entertainment and amusement facilities. The growth trend is vital for the success of the amusement park, thus appropriate marketing and promotional activities will be under taken. 4.1 PRODUCT SALES
Revenue: Joy Rides

Average Duration of Rides in Minutes Loading-Off Loading Time for Each Ride in Minutes Total No. of Rides per Hours Virtual Capacity of the Amusement Park Visitors per Day (At 5% of Virtual Capacity) Average No. of Visitors Expected Per Annum

3 7 6 46,440 2,322 835,920

Revenue: Others facilities

Monthly Average Rentals per Esq. in Rs

50
3

Total Area of Signboard in Sq ft Monthly Rentals of Signboards in Sq ft. in Rs Visitors Entrance Fee in Rs Average Fee for Rides in Rs Vehicle Parking Fees in Rs
Annual Sales

1,000 4 10 60 10
27,520,000

4.2 RAW MATERIALS The main requirement is that of electricity, this is readily available. Also other supplies such as water and store and spares are available at low prices.
SERVICES

This is mainly service industry. The customers would come to spend their leisure time with their families. They will be provided quality, security and safety during their stay at the amusement park. 4.3 DISTRIBUTION CHANNELS Marketing and branding of this amusement park will play a key role in the mobilization of targeted number of customers. Major marketing options include, site advertisement, cable ads and handbills among other traditional marketing channels. Marketing budget and strategy would be based on the change in the number and type of visitors to the park overtime. Before launch of the project, it is recommended that a research for understanding the dynamics of the targeted market should also be carried out, to designing the products as well the promotional strategy.

4.4 HUMAN RESOURCE REQUIRMENTS

The following requirement of staff along with their levels and monthly salary is foreseen for this project:

4.6 PROJECT FINANCIALS OPERATIONAL DATA

Growth Rates per year Annual Increase in Visitors Entrance Fee 5% Annual Increase in Vehicle Parking Fee. 5% Annual Increase of Monthly Rentals 10% Annual Increase in Visitors Entrance Fee. 5% %Age Annual Increase in No. of Visitors. 13%
FIXED COST

The fixed cost is expected to be Rs 44.914 Million as described below. Amount Rs (000) Land Building & Civil Works Plant & Machinery Tools, Equipment, Computers & Telephones Electric Installations Vehicles, Furniture & Security System Contingencies Deferred & Pre-Operating Cost Interest During Construction
Total Fixed Cost

13,800 8,586 14,675 331 4,196 758 571 1,427 570

44,914

WORKING CAPITAL

The investment in the initial working capital is of Rs 100,000

OVERHEAD COSTS

In the first year following overhead cost are estimated. Administration Expenses Utility expenses Traveling Office Vehicle and running Office stationary Insurance expenses Miscellaneous expenses Total 354,400 228,292 124,000 102,800 14,800 186,491 14,965 1,025,748