Galicia may be an autonomous state tucked away in the north-west corner of Spain, but that is not stopping a new breed of local film-makers from bursting onto the global scene by working with international film-makers on bigger budget productions.

New companies such as Perro Verde and Vaca Films, as well as the more established Dygra Films and Bren Entertainment, are seeking out co-production partners across Europe and the Americas for their latest projects, and not just on animations, for which the region has already earned an impressive reputation.

'There is a maturity in Galicia with local producers realising the international market is definitely available and we are a good co-production partner,' says Manuel Cristobal, founder of Perro Verde Films, which is working with Antonio Banderas' Green Moon Productions on animated feature The Missing Lynx and Angel de la Cruz's live-action feature Los Muertos Van Deprisa, which is being distributed by Disney in Spain (see production sidebar, p23).

Emma Lustres, head of Vaca Films, says: 'Our objective has always been to co-produce with international partners because it opens the local market and we can export our projects, as well as Spanish cinema, a lot more easily. Galicia already has a tradition of film-making with skilled technicians and very good actors who are becoming more and more known on the international scene, such as Luis Tosar, who is the lead in Cell 211 (a prison drama co-produced with France's La Fabrique 2).'

To assist local producers with their international goals, the Galician Audiovisual Consortium (GAC), an organisation funded by the local government, recently set up three new co-production funds.

The first is a $4.9m risk capital fund, run in partnership with regional savings bank Caixa Galicia, known as Sempre Cinema Producions, which provides completion investment for co-productions. Each project can access up to $800,000, but must have a strong association with the region (such as a Galician producer and crew and some shooting or posting in the territory). However, there is some flexibility: international producers can potentially qualify if they set up a Galician office. Projects to have taken advantage of this fund so far include Perro Verde's Los Muertos and Jose Luis Cuerda's The Blind Sunflowers, which shot in Galicia last year. Sunflowers is being backed by Producciones A Modino and Canal Plus, among others, and was recently released in Spain by Alta Films.

The second fund, Raices, is worth $800,000 and is a partnership between the Galician consortium, Catalonia, Andalusia and Argentina's Incaa film Institute. The fund invests around $200,000 in each project, but to access it, international producers must have co-production equity from all three sources (Incaa, Catalonia, Galicia and Andalusia) and a distribution deal in the participating territories.

The third fund was unveiled at last year's San Sebastian International Film Festival, and sees the GAC working with Brazil's National Cinema Agency, Ancine, to promote co-productions between Spain and Brazil. Two projects have taken advantage of the fund already: Sex Of Angels, by Galician director Xavier Villaverde, and Brazilian director Alberto Graca's erotic romance drama Absence, a co-production between Brazil's MPC & Asociados and Filmes do Tejo, and Galicia's Ficcion Producciones. Both projects will receive $203,000 (EUR130,000).

'Of course we want to support local productions, but more recently we have been trying to support more international co-productions. We don't want to just support Galician films for Galicians only,' says Ignacio 'Nacho' Varela, director general of the Galician Audiovisual Consortium. 'With the Raices fund we expect to support about two or three co-productions a year, and with Sempre Cinema there should be between six and 10 each year.'

'There are a lot of Galician immigrants in South America, and so it makes sense to do projects with them,' says Vaca's Lustres, who has already worked with Mexico's Buenaventura Producciones on last year's film La Zona, which sold well internationally. Lustres is now working with Argentina's Patagonik Films on Retornos.

A new studio

But despite such promising steps, the GAC's Varela is aware there is a crisis in Spanish cinema right now and Galicia is very much immersed in it. 'We are not a separate island,' he says. 'There are very few fictional commercial international co-productions that shoot here. We have had some success with films such as (Alejandro Amenabar's) The Sea Inside and Fernando Leon De Aranoa's Mondays In The Sun. But others, such as El Nino De Barro, a co-production between Spain's Iroko Films and Argentina's Patagonik, have not fared so well.'

Some local producers have pushed for a studio to be built to bolster film production in the region and to match the might of Ciudad De La Luz in Andalusia. 'We, as producers, have been fighting for this for some time,' says Fernanda Del Nido of Tic Tac Producciones, which is shooting the Franco drama Flores Tristes in Galicia.

But not everyone agrees. 'It is very difficult to invest public money in a studio because you have to not only make a profit from productions shooting there, but sustain it long term,' says Varela. 'We already have production facilities and locations to accommodate co-productions, but to build a studio would be a risky venture.'

Instead, Varela insists, 'We need to strengthen the relationships between distributors and exhibitors to make sure the right films get shown in the cinemas. We need to support the proper talent, and limit the support for small-scale films that clearly aren't going to make any money.'

Other film-makers agree. 'When the percentage of Spanish productions (and co-productions) making an impact at the local box office is only 7.4%, while in France it is more than 40%, you know there is a problem and something should be done,' says Galicia-based writer-director Angel de la Cruz. 'We should be more critical of our own work.' De la Cruz's credits include the animated feature, The Living Forest, which took more than $6m worldwide on its release in 2001. His new project is the live-action Los Muertes Van Deprisa. 'We need to demonstrate that Galicia can consistently produce successful commercial films.'

Part of the problem in Galicia is that both the Nationalist Party and the Socialist Party have organisations that control the funding and support of the local audiovisual industry.

'While the Socialists are keen to see more international co-productions being made, the Nationalists are desperate to support local productions to nurture local talent. But they are backing films that aren't going to be distributed,' claims Varela.

Dygra Films' president and founder Manolo Gomez insists, 'For the past 10 years, the sector has been demanding for there to be only one unique organisation to oversee financing, formation and promotion.'

Lustres adds: 'There needs to be co-ordination from all the agents in the sector. At the moment broadcasters go one way, the department of culture another way, and the General Directive of Communications a different route as well. There is complete disarray in terms of administrative autonomy and there isn't a common policy or clear guidelines for producers.'

Gomez is also not convinced the funding available is enough. 'For example, our latest project Spirit Of The Forest was $12.3m (EUR8.5m), but the most we can expect from local funds is about 15% of that. We then have to think about the return on investment, which probably needs to be a minimum of 50%. But as the budget increases, the percentage must do as well. This is why there aren't many companies in Spain that can conquer the international scene because there isn't enough investment.'

Innovate, innovate, innovate

So what do Galician film-makers believe is the key to producing a box office hit' Gomez insists that in addition to having enough money to make the project, you 'need to be innovative'. Dygra Films has announced it will be releasing its next five films in 3D, starting with Spirit Of The Forest. 'We believe 3D animation is a value-added product that opens a new window of opportunity for distribution, especially to a younger audience, not just in Spain, but internationally.'

For Lustres, it is important 'to have an attractive film, with money and the know-how to sell it. Unfortunately, 98% of Spanish films are the opposite.'

Varela insists all Galicia needs 'is one local title that breaks through at the worldwide box office, which will then, hopefully, open the floodgates.'

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