The 2001 animated feature The Living Forest marked a before and after in Spanish animation. Europe's first 3D computer animation, it was seen by more than a million viewers across the continent. Its success helped producer Dygra Films finance its $8m (EUR6.1m) Midsummer Dream, and grow its company with an eye to opening associated studios abroad. Dygra is in production on the 3D follow-up, The Spirit Of The Forest, for a 2007 release.

Since The Living Forest, Spanish animation has rocketed. The northwestern region of Galicia is home to both Dygra and Filmax-backed animation studio Bren Entertainment. Bren - which offers CGI production services to international clients and has introduced groundbreaking long-distance production-management software - was behind 2003 hit El Cid, The Legend and last year's Argentinian co-production The Hairy Tooth Fairy. Bren is currently working on Don Quixote take-off Donkey Xote and orphanage tale Nocturna, both for release this year.

"The Spanish system for financing films works well and can be capitalised on to make animated features," says Manuel Cristobal, executive producer and international sales chief on The Living Forest and co-founder of new sales consortium 6 Sales and start-up production outfit Perro Verde Films. "Spain also boasts important animation studios that offer competitive quality and prices," Cristobal adds. These include Granada-based Kandor Graphics, which is co-producing $6.5m (EUR5m) CGI family adventure Missing Lynx with Perro Verde for directors Manuel Sicilia and Raul Garcia (The Lion King, Aladdin). Meanwhile, Madrid-based Illion Animation Studios is producing the estimated $52m (EUR40m) Planet One, about an alien planet invaded by humans, with US partner Worldwide Biggies and scriptwriter Joe Stillman (Shrek).

Perro Verde's slate also includes adult-targeted puppet animation Zombie Western with Danish partner Happy Flyfish, in development for a Halloween 2008 release, and quirky low-budget Going Nuts, which features animated peanuts, in post-production for release this year.

"Animation is in hot demand right now," confirms sales agent Massimo Saidel of Latido Films, which is handling Continental Films' De Profundis, crafted around hand-painted drawings with a summer release, and Animal Crisis, billed as the first feature-length film made entirely in Flash animation. "Whereas people sometimes overlook the variety in Spanish cinema, they are coming to appreciate Spanish animation thanks precisely to its variety, quality and originality," insists Saidel.