South Korean major Cinema Service has successfully carried out a merger with its parent company, Locus Holdings, at the same time completing a major internal restructure to facilitate the construction of its own studio and its entry into the exhibition sector.

Construction of a new studio complex in Paju is expected to begin this month, with Cinema Service becoming the first Korean company to build its own major studio. Previously, the industry has largely made use of the Seoul Studio Complex, constructed in 1997 by the Korean Film Commission.

In addition, having long maintained a close relationship with the Seoul Theater chain, Cinema Service expects to unveil its own cinema circuit by the end of this year. With rival distributors CJ Entertainment and the newly-formed Showbox enjoying a competitive advantage due to their state-of-the-art multiplexes, Cinema Service's entry is expected to create further competition in the rapidly-evolving market.

Furthermore, the company has announced the launch of its own DVD distribution arm, following CJ Entertainment's entry into the market in late 2001. Cinema Service expects to release its first title in May with CEO Kang Woo-suk's $15m hit Public Enemy, to be followed by such titles as Volcano High and Two Cops.

With the completion of these initiatives, Cinema Service will have the ability to control nearly all aspects of filmmaking, from investment and production through to marketing, exhibition, and video releases.

Last year, Cinema Service captured an industry-leading 22.6% market share with a total of 24 films released (14 local, 10 imported).