The exhibition sector in Russia is set to grow once again this year driven by a box office that has been increasing by 80% a year over the past two or three years according to figures released by the Russian Ministry of Culture.

While most of the action has been in Moscow and St Petersburg exhibitors are now also looking at the regions where competition is less fierce than in Moscow.

The government backed Roskinoprokat (The Russian Cinema Exhibition) has announced plans to establish a local network by refurbishing about 1000 old state cinemas across Russia. The focus will be on sites in small provincial cities with 100 to150 seats that will include digital projection.

Russia now has 70 cinemas and 450 modern screens but it remains one of the most under-screened countries in Europe with only 0.5 screens per 100,000 compared to between 5 and 9 screens per 100,000 in Western Europe according to a survey by Russian exhibitor Investkinoproyekt.

Latest to enter the race to screen Russia is Cinema Park, which opened a $5m, nine screen multiplex in a Moscow shopping center in January. Cinema Park which has ambitious plans to open 12 multiplexes across Russia in the next three years is 80% owned by Prof-Media, a subsidiary of Vladimir Potanin's Interros holding, and 20% owned by Nikita Mikhalkov's Three T Studios.

With a box office that reached more than $200m last year and some surveys predicting the figure will rise to more than $500m in the next three years, major international exhibition players like Warner Brothers have been eyeing the Russian market but so far the only foreign exhibitor to enter the fray is National Amusements which opened an 11 screen multiplex in a joint venture with Paul Heth's Rising Star Media last year.

Rising Star is slated to open a second 12 screen multiplex in a northern Moscow mall in December of this year. By 2007 Rising Star plans to have 60 screens across Russia.