Major South Korean arthouse distributor Sponge Entertainment is launching international sales at the European Film Market (EFM) with Panorama title Beautiful - directed by Kim Ki-duk protege Juhn Jaihong - and Cannes and Berlin director Zhang Lu's upcoming Chungking.

'We're leaving the bigger films like Lee Yoon-ki's My Dear Enemy or Zhang Lu's Iri with Cineclick, but we have decided to sell our smaller titles ourselves,' says Sponge CEO David Cho.

'Korean film sales, which were heavily dependent on the Japan market, have shrunken massively, but in the midst of all this we've seen that established auteur directors like Kim Ki-duk still hold their own in European markets. Zhang Lu has also sold solidly to France and Spain,' he said of the Korean-Chinese director of Desert Dream and Grain In Ear.

'The problem is that sales agents need to focus on the Japan market for a bigger portion of sales, and it's harder for them to take care of smaller titles - the results aren't so good, so we might as well do the sales ourselves,' he said.

As one of Korea 's most prolific arthouse importer/distributors, Sponge is known for its successful long-run, limited releases of imported films such as The Science Of Sleep or La Maison De Himiko.

The company is also increasingly investing in local films for distribution, such as Kim Ki-duk's Time and Breath, and most recently Jeon Soo-il's Venice title With The Girl of Black Soil.

Sponge also now has three directly-run Spongehouse cinemas in major areas in Seoul - Myungdong, Gwanghwamun and Apkujung - and also operates third-party cinemas in the provinces.

Sponge will be setting up shop with other South Korean sales agents in the Korean Film Council (KOFIC)'s umbrella stand at EFM.