Flanders film was not quite in the doldrums when Pierre Drouot took over as managing director of the Flanders Audio-Visual Fund (VAF) in November 2005.

Nonetheless, to outsiders, it was clear Flemish cinema was not prospering either. Few films from the Belgium region of Flanders achieved any visibility at all on the international festival circuit. Despite one or two notable successes, such as Eric Van Looy's The Alzheimer Case (aka The Memory Of A Killer) in late 2003, local movies were not doing spectacular business at the local box office either. There was a widespread perception that Flemish movies were conservative. Where were the mavericks'

Two years on, the picture looks rosier. One of Belgium's leading producers, Peter Bouckaert of MMG, says: "There is a new era, a new wind blowing."

Admissions figures broke records in 2007. By mid-December, around 1,165,000 cinema-goers had been to see a locally produced film in Flanders (these figures eclipsed the 2003 records). Five titles attracted more than 100,000 cinema-goers this year. Ben X by Nic Balthazar had posted close to 260,000 admissions, followed by local comedy A Chicken Is No Dog by Dominique Deruddere (219,721). Other box office successes are Missing by Jan Verheyen (more than 190,000), A Perfect Match by Miel Van Hoogenbemt (119,097) and children's adventure Plop And The Penguin by Dennis Bots (around 120,000).

Flemish movies have also been making an impression internationally. In 2006, Peter Brosens and Jessica Woodworth's Mongolian-set Khadak won the Lion of the Future award in Venice. In 2007, Balthazar's Ben X was the surprise package at the Montreal festival, winning the audience award, the Ecumenical Prize and sharing the main prize, the Prize of the Americas. Following this spectacular debut, Ben X went on to win the grand prize, the Black Pearl, at the Abu Dhabi Middle East International Film Festival, and is selected for Generations at the Berlinale. It is also Belgium's foreign-language Oscar entry - an achievement for a debut feature from a director best known as a TV presenter and film critic. Also last year, the Karakatsanis brothers' quirky road movie Small Gods screened in Venice's Critics' Week, while Koen Mortier's Clockwork Orange-like debut feature Ex Drummer premiered this time last year in Rotterdam's Tiger competition and went on to sell widely.

There are great expectations about young auteur Fien Troch. Her first feature, Someone Else's Happiness (2005), was praised widely on the festival circuit and was chosen as Belgium's foreign-language Oscar candidate for that year. Now, Troch, the daughter of editor Ludo Troch, is at work on her second feature, The Unspoken.

As if to underline the growing curiosity about film from Flanders in the international market, more Flemish projects are being chosen for events such as Rotterdam's co-production market, CineMart, and the Berlinale Co-Production Market. This year in Rotterdam, Mortier will be presenting his second feature, 22nd Of May. His drama about a security guard will take its place in CineMart alongside Vanja D'Alcantara's The Steppes. Meanwhile, Christophe Van Rompaey's Blanco has been selected for the Berlinale equivalent. Produced by CCP's Eurydice Gysel (known for her work on Ex Drummer), this is an adaptation of Peter Terrin's novel about a man who loses his wife in a carjacking (Van Rompaey's first feature, Aanrijding In Moscou, is to premiere this spring).

Young talent is flourishing in short film formats. When Nathalie Teirlinck's short Anemone was selected for competition in Locarno in the summer of 2007, she was able to capitalise on the success. Teirlinck went on to win one of the two $88,000 (EUR60,000) VAF Wildcards handed out each year to film school graduates on the basis of their graduation film (VAF hands out a further three $59,000 Wildcards a year to documentary film-makers). She was also selected for the 2007 Berlinale Talent Campus.

Another new talent, Nicolas Provost, will be screening his new short, Plot Point, in Rotterdam and Sundance having already won the prize for best European film at the Vendome Short Film Festival. Provost is now preparing his first feature, The Invader (a 2007 CineMart project).

A criticism of film-making in Flanders has been that radicalism is in short supply. This explains the decision in late 2007 to set up a new scheme targeting offbeat talent. The FilmLab will invest $1.2m (EUR800,000) in supporting adventurous new film projects. This will include seed money for expensive ones as well as funding for lower budget films. 'No guts, no glory' is the slogan being touted for the new scheme.

The government in Flanders also recently upped the VAF's budget for documentaries from $1.5m (EUR1m) a year to $2.6m (EUR1.8m). VAF will partner with commercial broadcaster VTM on the new documentary initiative, which will run along similar lines to the Faits Divers scheme for dramatic features. In recent years, this has yielded local successes, The Only One, Tangier and Love Belongs To Everyone.

It is clear local film-makers have benefited from the Belgian tax-shelter system. There is evidence of increasing variety in the kinds of movies being made in Flanders. Mainstream dramas such as Miel Van Hoogenbemt's A Perfect Match, starring the veteran Jan Decleir, are still being produced but so are edgy and iconoclastic movies such as Small Gods and Ex Drummer. Meanwhile, young directors such as Felix Van Groeningen are making strong, character-driven dramas such as With Friends Like These, about five friends whose lives are going in very different directions (both Small Gods and With Friends Like These have been chosen for the main programme of the Rotterdam International Film Festival).

It may be too early to talk about a Flemish new wave but the wealth of films being made suggests the local industry is at last on the up.