As it turned 12 this year, the Pusan International Film Festival (Piff) started to exhibit growing pains. But the burgeoning South Korean festival, with its mandate to discover and support Asian cinema, is still widely recognised as the premiere event in Asia - putting it in the rankings that follow Cannes, Venice and Berlin as must-attend events.

With or without all its new events and initiatives, including the sophomore Asian Film Market, the festival's forte remains its ability to bring together high-profile industry players and up-and-coming creative talent.

Piff was off to a rainy start on October 4, with a star-studded red carpet and an epic war film/human drama Assembly directed by China's Feng Xiaogang. The heads of the Cannes and Sundance festivals, Thierry Fremaux and Geoffrey Gilmore, as well as Berlinale Forum head Christoph Terhechte - all Piff regulars - attended and took part in a South Korean tour with legendary composer Ennio Morricone, who reportedly left the festival early after maladroit procedural guidance at the ceremony.

Close on the heels of his departure, the local press took its gloves off this year, criticising what they called the festival's unskilled and immature procedures and services. While relatively well organised, the festival has a high turnover of lower ranking inexperienced staffers. These enthusiastic volunteers are rigorously trained but perhaps a little too overzealous at times, as was noted by ticket holders who were barred from screenings for arriving two minutes late.

Nonetheless, Piff proved it is still highly popular with audiences. The event saw its highest attendance in 12 years - 198,603 admissions, with a 75.8% occupancy rate. The opening, closing (Evangelion 1.0: You Are (Not) Alone) and Midnight Passion screenings were sell-outs.

All 11 films in the New Currents competition were either world or international premieres. While no single film stood out, Aditya Assarat's New Currents winner Wonderful Town enjoyed a popular consensus.

With an abundance of corporate sponsorship for awards, Piff named three winners in the New Currents section. Along with Wonderful Town, Guang Hao Jin's China-Korea co-production Life Track and Seng Tat Liew's Malaysian film Flower In The Pocket each took home $30,000. The first two of these were also recipients of Piff's inaugural Asian Cinema Fund post-production grants.

For its part, the second Asian Film Market is still finding its feet. While the market was well attended and produced a handful of deals (including four sales from Korea's CJ Entertainment to Germany's Splendid), most participants agreed it was relatively quiet. Although the same number of companies attended as last year, there were fewer sales offices spread over four floors of the Grand Hotel. A shortage of buzz films in the festival also added to the slightly subdued atmosphere this year.

Most sellers say the real value of the market was in starting negotiations they hoped to conclude at upcoming events. 'We've got potential buyers from four territories for (Wilson Yip's $10m thriller) Painted Skin and will follow up at the American Film Market,' says Freddie Ho, distribution manager at Hong Kong's Salon Films.

Pusan's organisers are constantly innovating with new programmes around the market such as Co-production PRO, launched this year. It is pitched as a mainstream version of 10-year-old projects market Pusan Promotion Plan (PPP), and talent showcase Star Summit Asia, now in its second year, which afforded shining photo-call opportunities (see p12-13).

But the question is whether Pusan really needs a formal market at such a busy time of year. For most industry folk, the main draw of Pusan is still the festival and PPP rather than the sales offices. 'PPP is great for meetings on your own project, but you also get to meet with other directors in Pusan,' says Hong Kong producer Terence Chang.

Travel fatigue and a lack of interesting new product, as territories such as Hong Kong and Korea rationalise their output, may work against the Pusan market. But at the closing ceremony, Piff director Kim Dong-ho and market director Park Kwang-su were both adamant the Asian Film Market is here to stay.

One curve ball they were probably not expecting is the rumour the Tokyo International Film Festival, and accompanying Tiffcom market, might shift to a pre-Pusan slot which would likely affect Pusan's ability to attract the international industry and new films. However, Tiffcom execs attending Pusan said, while a date change had been considered, the event would stick to its late October dates in 2008.

But whatever direction the Asian Film Market takes, there is no doubt Pusan stands head and shoulders above Asia's other festivals and will continue to draw an international crowd.

Jason Gray and Silvia Wong contributed to this report