Loews Cineplex and Spanish partner Yelmo Films have announced they will pump a Euros 60m (pts9.98bn) loan into the construction of eight new multiplexes for Yelmo Cineplex, their joint exhibition venture in Spain.

The capital injection will supplement current cash flow and Loews' initial contribution to the venture on its 1998 launch, which was an unrevealed amount equal to the cash equivalent of the value, net of debt, of Yelmo's existing theater assets. At the time Yelmo operated 13 cinemas with 108 screens.

With a current estate comprising 35 theaters and 267 screens, the venture now operates Spain's second largest exhibition circuit behind CAEC, a local three-way venture between Lauren Films, Cines Abaco and Cinebox. Yet it has fallen short of initial aspirations to construct 20 multiplexes and a minimum of 175 new screens by 2001, having inaugurated just five new multiplexes with a total of 43 screens since 1998. The company blames the shortcoming on delays in obtaining licenses for construction of the shopping centers where their complexes are located.

Cinema construction in Spain is waning in general, with some suggesting that the market may be reaching saturation. Despite phenomenal growth in the mid-1990s of an average of more than one new screen per day, expansion of the exhibition sector slowed to just 162 new screens in 2000. As of September 15 of this year government statistics showed 3,503 screens in Spain, two less than at year's end in 2000.

Nevertheless Spain still represents an attractive location for theater builders in a turbulent global market. A recent pan-European study reported that Spaniards go to the cinema on average 3.4 times per year, more often than other countries in Europe except Icelanders, and overall ticket sales in 2000 reached Euros 536m (pts89bn). Ster Century, Warner Lusomundo Sogecable, AMC and Kinepolis are just some of the multinationals with plans to continue developing in Spain.

Yelmo Cineplex says it foresees investments of up to Euros 100m in eight new multiplexes by 2003. All of the cinemas will be built in urban hubs of Spain's autonomous regions, the country's key exhibition markets.