With its low costs, diverse landscapes and proximity to Los Angeles, Mexico has long been a popular production destination. 'It has always been one of the favourite locations for Hollywood,' says production manager Anna Roth.

One of the biggest names in the local industry, Roth has 30 years' experience, with credits including Titanic and Mel Gibson's Apocalypto. Since James Cameron shot Titanic at Fox Studios Baja, international production has been on the rise: Man On Fire, The Mexican, Kill Bill: Vol 2, Traffic, The Legend Of Zorro and Pearl Harbor all filmed in Mexico.

While no major studio projects are yet confirmed to shoot in Mexico this year, MGM recently wrapped Nick Lyon's Species IV, which shot for six weeks in Mexico City. Projects mooted to be shooting in 2007 include La Banda, a film currently in prep produced by Salma Hayek - who also stars - and Rick Schwartz; and Andrucha Waddington's $40m Spanish-language epic Conquistador, to which Antonio Banderas is attached; and Steven Soderbergh's Che Guevara film Guerrilla.

'Each year Mexico receives between $40m and $150m from foreign productions,' says Hugo Villa Smythe, sub director of the Film Production Support Department of the Mexican Film Institute. 'Of course this varies depending on the size of the features. Mel Gibson's Apocalypto, for example, brought in between $35m and $40m alone.'

The experience built up from working on big-budget international productions is one of the reasons that Mexico remains attractive. 'In Mexico the crews were extremely friendly, professional and wanted to help. I would shoot there again in a heartbeat,' says Callum Greene, executive producer of Pete Travis' $40m Vantage Point.

Location, location for variety of landscapes
The locations available are also a strong draw. Mexico offers a wide variety of landscapes including forests, deserts, beaches, jungles, small local towns and colonial buildings. 'Mexico can host any kind of project, any size, any budget,' asserts Arturo Del Rio, a partner with his brother Ricardo of Art In Motion, a production service company based in Mexico City.

The Del Rio brothers are members of the new generation of Mexican producers looking to work with international filmmakers. They have just wrapped Vantage Point, which is set in Salamanca, Spain, but Columbia Pictures chose to shoot in Mexico instead.

'We convinced them that Mexico was the best location. In eight weeks we built the entire square of Salamanca ... In Salamanca it would have been a nightmare,' explains Del Rio. The film, currently in post-production, had a 10-week shoot with 500 crew working on it each day and included between 1,000 and 3,000 extras.

Del Rio says Mexico compares favourably to European countries and Canada, its strongest competitors, and is cheaper. 'Money lasts more in Mexico and the currency exchange helps too,' he insists.

Mexico's close proximity to the US is also an important advantage: the expenses are less, and the travel time too. LA to Mexico City is only a three-hour flight, and costs just $350 for a round trip. 'Sometimes we don't even fly. The material comes from the US in big trailers. The customs is not an issue for film productions either. There are specific steps to follow and that is it. The only thing you need is security for the convoys in case you are robbed on the road,' explains Del Rio.

The red tape has also got a lot easier after years of corruption. The situation changed in 2000 when the PRI (Institutional Revolutionary Party) lost the general election for the first time in 71 years.

'New people, professional and not political, were put in charge of the government institutions and agencies. No more kickbacks like in the 1990s,' says Del Rio.

Limited local government support
Local government support for international film-makers varies substantially in each state. 'After Apocalypto, some states are becoming very supportive, such as Guerrero or Durango,' explains Mariano Carranco, production manager of Jieho Lee's The Air I Breathe.

But at present, tax incentives for foreign production companies do not exist. 'It would be much better to have tax incentives. This would make more productions look towards Mexico,' adds Carranco.

The local industry is hoping low costs and the experience of Mexico's crews will be enough for now. 'There are very good technicians. They are used to Hollywood projects and they know how to use equipment that is not available in Mexico,' says Roth.

Generally, fees are quite high considering the territory's cost of living, but cheaper compared with other countries. 'Most of our teams are fully Mexican,' says Del Rio. 'We try to promote our people, our heads of departments. They are very qualified.

'We fought hard for Xavier Perez Grobet as a DoP on Paramount's Nacho Libre. For Vantage Point, only a few of the crew were Americans. Even the special effects were done by a Mexican.'

Producers do not need to get script clearance and do not have to worry about the language either, even if not everybody speaks English. 'If (the Mexican crew) can't follow a conversation in English completely, they do understand perfectly the technical words,' says Roth.

Limited capacity to handle major shoots simultaneously
Security concerns are also more of a prejudice than a reality. Mel Gibson, for example, shot Apocalypto without special security. The film, shot in Veracruz and Oaxaca, had 400 people working for the make-up and costume departments and 700 extras. 'We spent six weeks for the casting; half of the actors were amateur. We had 400 people as a crew in the jungle,' says Roth.

Most international producers, though, do not post in Mexico since local laboratories do not yet meet international standards. Casting is also still at an amateur level. 'The agency system is not developed, the actors are called directly by the casting director. And it is difficult to find people with European characteristics,' says Roth.

Mexico also has a limited capacity for handling several major shoots simultaneously. Roth, Del Rio and Smythe all agree that only about four or five productions worth more than $30m can shoot at the same time, on top of the local projects. That situation is unlikely to change as there are no new studios or laboratories in the pipeline.