Hong Kong'sMandarin Entertainment is setting up a joint venture with China's HengdianGroup to build a film processing and post-production facility at Hengdian FilmCity in Zhejiang province near Shanghai.

The US$14.5m(RMB120m) facility will provide a full range of post-production servicesincluding film processing and duplication, editing, sound mixing, subtitlingand special effects. Spread over 100 acres, the development will also houserestaurants, shops, offices and serviced apartments to ensure a comfortableliving environment for people working at the site.

Mandarin will holda 49% stake in the joint venture - Mandarin Film & Television Production Co- while Hengdian will own 30% and property developer Zhejiang Mandarin (a jointventure between Mandarin and mainland partners) will hold the remaining 21%.

The joint ventureis the first of its kind in the PRC where until recently post-productionfacilities were off-limits to foreign investors. According to Mandarin chairmanRaymond Wong, it also provides much-needed infrastructure for the mainland'sfast-growing film and TV production industries. "At present there's very littlecompetition in the post-production sector," says Wong. "This development willencourage people to invest and upgrade existing facilities."

Mandarin expects tobreak ground on the new facility next month and to open for business nextsummer. Managers will be brought in from Hong Kong and Taiwan in the earlystages, but the new venture is also planning to recruit and train local techniciansand staff.

Hengdian Group'sactivities span several industries including electronics, pharmaceuticals andhi-tech agriculture. The company became involved in the film business in 1995when it agreed to help Chinese director Xie Jin build sets for historical epicThe Opium War.

Dubbed the "ChineseHollywood", Hengdian Film City now boasts around 13 outdoor sets and has playedhost to big-budget productions such as Zhang Yimou's Hero and Chen Kaige's upcoming fantasy epic The Promise.

Mandarin isinvolved in film production and distribution and is also Hong Kong's largestfilm processor with a market share of around 60%. The company is also settingup a joint venture with Shanghai-based garments manufacturer City Glory toco-produce TV series on the mainland.