Despite a challenging economic climate, a raft of new film companies are suddenly launching in Mexico - all hoping to hit the big time with their new projects.

Many have been spurred on by the kind of success seen by local blockbuster El Crimen Del Padre Amaro.

The new outfits are also aware that Mexico is a fertile territory for film; the country ranks fifth in the world in terms of admissions and boasts the largest screen count (3,000+) in the region.

Among the ambitious new players is Indi Films, launched by Juan Carlos Blanco who runs one of Mexico's leading advertising companies, Blanco y Associados.

Blanco has at least three films in pre production, Malverde, El Legado and La Noche Del Pirata. He is also co producing Leopoldo Laborde's 3 D animated adventure epic Empire Of The Gods.

Laborde and his producing partner Roberto Trujillo are also developing two other projects, an untitled drama and a science fiction drama titled Mensajero Del Tercer Dia, under the banner of their production company Utopia 7.

Partners Salvador de la Fuente, Gustavo Angel and Erwin Neumayer, whose Hari Kiri Films produced Columbia Tri Star Mexico's first foray into Mexican production, dark comedy Sin Ton Ni Sonia, have plans to launch a new (still un-named) film company in the near future.

"We plan to produce three mainstream films a year, with the same broad appeal as Sin Ton Ni Sonia," said de la Fuente. Among their upcoming projects are musical comedy Jaleo Real, dark comedy Seguros, caustic political thriller Asesino Solitario and kids film La Formula Secreta De Doctor Funes. "We hope to continue our relationship with Columbia TriStar Mexico either as co producing partners and/or distributors of our films," he added.

Another new production house - albeit headed by a veteran player - is Mano Prods, set up by Matthias Ehrenberg who also heads Titan, the co-producer of Mexican blockbuster Sex, Shame & Tears.

Ehrenberg hopes to produce four to five films a year through the Mano banner. His most high profile project is Rosario Tijeras, based on the best-selling novel by hot new Colombian author Jorge Franco Ramos.

It is poised to become a pan-Latin American production given its cast of Colombian, Mexican and Peruvian actors. Argentina's Marcelo Figueras who wrote Kamchatka and Burnt Money, is drafting the screenplay.

"There are certainly a lot of projects brewing - but how many will be made and released is the question," says Ehrenberg. Inna Payan, director general of Sex, Shame & Tears co producer Argos Cine agrees: "We've had to scale back our production plans because of the current market conditions."

The truth is that there have been few changes in effect that will help boost Mexico's film production. Earnings from a controversial one peso levy on box office tickets have been frozen by injunctions from distributors who object to the initiative.

The revenue - expected to reach at least $14m (Pesos 150m) a year - is meant to fill the coffers of two film funds run by state-backed Mexican film institute Imcine. Imcine director Alfredo Joskowicz is working to unblock the additional earnings collected by the Mexico's Internal Revenue Service since January.

Meanwhile, Imcine has proposed a three per cent tax rebate to individuals or companies who invest in local film production.

To exacerbate matters, "television networks pay miserable fees under dire conditions for Mexican movies," says producer Fernando Camara. "However, they have been paying better for local blockbusters," he adds. In addition, p & a spend needed to launch a homegrown film has risen to $100,000. "Nowadays, local films need to attract up to one million admissions before their producers start recovering their p& a and seeing a profit," says producer/director Ernesto Rimoch.

Budgets normally range between $1m to $2m, although there have been a few exceptions. Altavista has earmarked $6.5m for an interesting project based on the novel Pasado Pendiente by Hector Aguilera about the beginnings of the drug trade in Mexico. With a working title of Poppy (Amapola) producers Miguel Necoechea and Francisco Gonzalez Compean are scouting for an international cast and locations in Mexico and the US.

Compean, who used to head Altavista, has formed his own production company, but is overseeing various Altavista projects including a 3D-animation feature.

A leaner Altavista (Amores Perros), which used to back 100% of a film's budget, is now looking to share costs with other companies. "It tends to put up only 25% to 30% of a budget now, " says Rimoch.

Televisa-backed Videocine has become its partner of choice in several projects. The film arm of Mexico's top broadcaster has become the strongest producer in the country, backing high profile projects including Ladies Night, the first film made by new BVI-Admira joint venture Miravista, and Nicotina, a black comedy starring Diego Luna by new production company Cacerola Films.

High on Videocine's slate are Sergio Arau's Un Dia Sin Mexicanos and Beto Gomez' Pink Fists (Punos Rosas), both of which will shoot on location in the US this May.