Spain's DeAPlaneta and Italy's Mikado, both backed by Italian publishing giant DeAgostini, have joined with veteran Argentinean producer Oscar Kramer to form new Argentina-based production company KDM films.

With Kramer as president and CEO, KDM aims to make two or three Spanish-language films per year on budgets ranging from Euro 1m-4m. Occasional English-language projects could go as high as Euro 12-15m.

International sales agents will be attached on a film-by-film basis although one US major has expressed interest in getting involved as regional or international distributor, according to DeA Planeta GM Agustin Mezquida. Future moves could see KDM entering distribution in Argentina as well.

"Argentina is attractive for two reasons: the scope of the talent and the low cost of producing there," Mezquida says. "This is not a fleeting speculation, we are not going there because Argentina is in fashion," adds Roberto Cicutto, Mikado's co-founder alongside Luigi Musini. "We share tastes and interests," Kramer adds.

KDM will be run as an independent entity, meaning films will not necessarily be co-produced or distributed locally by the founding partners. DeA Planeta's local production unit may nonetheless come on board one of the first, Tesela co-production Bohemian Soul (Alma De Bohemio) from director Adolfo Aristarain (Common Places).

Other first projects include Le Chien, Carlos Sorin's follow-up to festival hit Minimal Stories (Historias Minimas), and newcomer Guillermo Grillo's Ghost Of Buenos Aires (Fantasma De Buenos Aires).

An English-language project from Sally Potter (Orlando) based on a story by Jorge Luis Borges is in development with the UK's Adventure Pictures.