This article by Jennifer Tan appeared in SGX's kopi-C: the Company brew series, and is republished with permission
For self-starter Sim Choo Kheng, frustration usually breeds opportunities.
Nearly three decades ago, feeling like a square peg in round hole and grappling with workplace politics, the entrepreneur realised that he had to be his own boss, whatever the cost.
“Being creative, stubborn and fiercely individualistic, and wanting to do things my way without compromise – it was basically a recipe for career disaster.”
-- Sim Choo Kheng
Deciding to strike out on his own, Sim, the founder and Chief Executive Officer of SGX-listed theme park developer and operator Sim Leisure Group Ltd, raised capital – to the tune of RM14,000 – by selling his car.
With his expertise in the leisure industry, he began offering management consulting services to theme park operators.
“That turned out to be the best decision I ever made. Sometimes, to succeed in life, you need to create a do-or-die situation, where there is no option to turn back, only move forward,” he added.
Nonetheless, it proved to be a tumultous ride. “It wasn’t what I expected,” Sim admitted.
“I failed miserably in the first few years, and was forced to look for other jobs to supplement my income. But 27 years later, as a result of this difficult journey, I have learnt how fight the odds and emerge a winner.”
Over the years, he propagated the "Sim Leisure" brand through his involvement in more than 100 key projects worldwide, including Lost Paradise of Dilmun in Bahrain, Ski Egypt in Cairo, Legoland in Denmark and Malaysia, Universal Studios in Singapore, Aquapolis in Bulgaria, Motiongate Park in Dubai, and Yas Waterworld in Abu Dhabi.
Listed on SGX Catalist in March 2019, Sim Leisure Group showcases its own ESCAPE theme park brand in Penang that consists of three structures – Adventureplay, Waterplay, and Gravityplay – built over the span of seven years across 29 acres.
Adventureplay features climbing, jumping and swinging activities that mimic childhood mischief in a natural setting. Waterplay games reflect how children of yesteryear frolicked in rivers and played in streams.
|Gravityplay, which opened last November, rediscovers the adrenaline rush from downhill rides through a forest. It also currently holds the Guinness World Record for the longest inner tube water slide measuring 1,111 metres. These components reflect outdoor play essential to childhood development.
Chairlift to the start of the 1.1 km water slide. Photo: Company
In 2019, the ESCAPE theme park welcomed approximately 205,000 visitors, up from 185,000 in 2018 and 112,000 in 2017. It has also been awarded the TripAdvisor Certificate of Excellence every year between 2014 and 2019, and was consistently ranked No. 1 Theme Park in Malaysia by TripAdvisor.
“When you talk about theme parks, it conjures up images of rollercoasters, cotton candy, and conventional movie-based entertainment,” Sim said. “This has become an accepted formula that’s being exported to Europe and Asia.”
However, an environmentally friendly Sim Leisure theme park offers no movie spinoffs or mechanical rides. Instead, there are climbing zones, obstacle courses, zip lines and waterslides.
“It’s based on happy memories of my childhood, when I was growing up in the kampong, climbing trees and swimming in the river,” Sim said.
Reconnect with nature
“Our generation has gone for broke in the way we live – many kids, as well as adults, are deprived of real play time. We need to reconnect with nature, engage in healthy outdoor activity, and return to the basics.”
-- Sim Choo Kheng
To Sim, fun is measured in laughter and smiles per hour. “When we visit a theme park, we pay to feel good and be happy. Our ESCAPE theme parks are designed to maximise the fun quotient for our customers and raise their endorphin levels.”
The ESCAPE concept is focused on optimising enjoyment through low-tech, creative, play-centric attractions, which translates into lower investment outlay and operating overheads. This innovative business model disrupts the longstanding industry convention of hefty royalties and overpriced attractions.
“Fun doesn’t demand an astronomical price tag,” he pointed out. “The entire ESCAPE theme park in Penang requires capex of approximately S$20 million – which is a fraction of the cost of a conventional theme park – and fixed monthly opex of S$300,000, regardless of number of visitors.”
For the year ended 31 December 2019, Sim Leisure Group reported a 5% year-over-year rise in revenue to a record RM21.9 million. Excluding one-off IPO-related and other listing expenses, the Group’s core net profit – generated purely from its theme park operations – declined 3% to RM5.5 million.
The Group plans to unveil ESCAPE Challenge, an indoor sports recreational centre at Petaling Jaya’s Paradigm Mall (image below), possibly later this year. The indoor version required a lower investment commitment of S$1 million.
“There are huge opportunities for indoor theme parks in malls – many retail landlords are struggling with stagnating sales, and are seeking fresh attractions to pull in the crowds,” Sim said.
“Malls are also evolving into lifestyle, rather than purely retail, destinations for families to spend quality time together, which dovetails with the objective of our theme parks.”
Beyond Malaysia, Sim is eyeing Southeast Asia, China and South Asia. “Although Penang is a small island with a population of 1.8 million, we are profitable. How will this concept perform if we export it to larger markets like Guangzhou, Singapore or Jakarta?” he pointed out.
“With an entry price of S$40 per head, we’re selling a product that the masses can well afford.”
In February, the Group signed an agreement with Sri Lanka-listed Elpitiya Plantations – an associate of Sri Lankan blue-chip conglomerate Aitken Spence – to develop and operate theme parks in the island nation under the ESCAPE brand.
“I see tremendous opportunity in Sri Lanka, which is unspoilt, green, and has a population of more than 20 million,” he added. “China is another target market – it has a large middle-class population with high disposable incomes. The potential is immense.”
Last month, Sim Leisure Group inked an agreement with China’s Guangzhou Daxin Water Park Equipment to monetise its brand in the theme park industry. The partnership allows the Chinese company the right to use the “Sim Leisure” brand to secure contracts for design and construction of theme parks in China and the ASEAN region, in return for a 5% royalty payment to the Group’s 60%-owned subsidiary, Sim Leisure Creative.
Right now, the biggest challenge facing the Group is COVID-19. “It’s a problem that’s not unique to us – everyone will have to bite the bullet and run this marathon without shoes. Life will not be easy in the near term,” he noted.
But Sim firmly believes in making lemonade with life’s lemons – the Group is using the downtime to spruce up its outdoor theme park. “Our maintenance teams have been very busy with upgrades – we’ve not had the opportunity to carry out this kind of improvement works over the last seven years.”
He is confident demand will bounce back once lockdowns ease. “ESCAPE is more of a sports and recreational concept than a tourism product – we rely more on the domestic market as 80% of our visitors are locals.”
The resulting economic crunch from COVID-19 could also be a blessing in disguise. “It means less competition in the industry, as parks that are not properly managed will have to shut down.”
It would also offer a reality check for investors and operators. “After a crisis, investors tend to be more cognisant of the value of money. After the 2009 Global Financial Crisis, I remember being awarded more contracts to build such low-capex theme parks,” Sim noted.
“When money becomes a problem, people turn frugal – they get real.”
Nevertheless, it remains an uphill battle convincing bankers and potential investors that the ESCAPE concept is viable, and the next big thing – all because many associate theme parks with Western mega-budget brands.
“Most people have a conventional mindset and a list of boxes to be ticked, constantly comparing us to movie-based theme parks. We’ve been misunderstood for too long,” Sim noted.
While frustrating, the upside is that the Group retains its first-mover advantage. “We’re way ahead of our peers, who are still exploring big-capex parks and intellectual property assets from the West. A competitor building a multi-billion-dollar theme park is not a threat to us – we belong to a different genre altogether,” he said.
“At the end of the day, it’s all about a viable operating model and staying ahead of competitors.”
In the meantime, Sim continues to dream big. “Many people think life is a journey. For me, my life has a destiny, which is to build ESCAPE into the most successful theme park brand in the world.”
The 54-year-old hopes his three sons, aged 13, 23 and 26, will pick up the torch eventually. The two older boys are involved in Sim Leisure Group’s marketing and park operations respectively, while his wife, Silviya Georgieva Georgieva, is an Executive Director.
Sim’s mantra to his children is: Always question, and look beyond the surface.
“Young people can be very passive and unquestioning – I don’t want my kids growing up with that kind of attitude,” he said.
“The world is full of conformists and conventional thinkers. But if you develop an inquiring mind and analytical skills, you’ll be able to stand out from the crowd – and shine.”
Sim Leisure Group Ltd
Catalist-listed Sim Leisure Group is a developer and operator of theme parks. The Group operates three ESCAPE theme parks in Penang, Malaysia, catering to both local and foreign visitors. They are ESCAPE Adventureplay, an outdoor adventure theme park, ESCAPE Waterplay, Penang's first water park, and ESCAPE Gravityplay, which features a chairlift and two downhill karting tracks. The latter also holds the current Guinness World Record for the longest inner tube water slide measuring 1,111 metres.
The company website is: www.escape.my.
Click here for the company's StockFacts page.
For the full year ended 31 December 2019 financial results, click here.
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kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.
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