Sony Pictures Entertainment has appointed Iona de Macedo head of its newly-launched Spanish production operation, Columbia Films Producciones Espanolas, and is looking to raise production levels in other local markets such as the UK.

De Macedo will relocate to Madrid from the studio's Brazilian arm, where she served as vice president of production for Columbia TriStar International Television for Latin America, excluding Mexico.

The division's five-year plan envisages building up to producing three titles annually, made on budgets similar to the average for domestic Spanish films. As in other local markets where the studio has a production presence such as Brazil, Germany and Asia, films will be made primarily for the local market but may also be distributed overseas.

Explaining the move at the San Sebastian International Film Festival, Gareth Wigan, vice chairman, Columbia TriStar Motion Picture Group, cited Sony titles such as Not One Less, a Chinese film without stars which was released in 30 countries.

Wigan said that Sony could allow local film-makers to develop material in more depth and give co-producers a share of any profits because the studio provided its own capital. "The producers of four out of seven of the local language films that we have released in the past two years have already received cheques for their share of the profits of these films and there is more to come," he said.

Wigan also confirmed that the studio is considering a partnership with UK producer Barnaby Thompson and Ealing Studios, the historic British studio which Thompson co-owns through his production company Fragile Films.

While still only at idea stage, the investment would allow Sony to raise its local production activities after plans for a studio facility in Scotland with Sean Connery fell through. "It is one of the ideas that we are exploring," Wigan said. "We would like to do more films."

Columbia is also looking at ramping up production activities with Ska Films, the production company of Guy Ritchie and Matthew Vaughn, through which it boarded Snatch as a negative pick-up. Wigan said the studio "effectively" has a first-look deal with Ska and is releasing its next film, Swept Away, world-wide excluding Italy.

The studio is also looking at a long-term arrangement in the UK with tax-driven financier Grosvenor Park.

The announcement - accompanied by a flotilla of Sony executives from Los Angeles, Asia and Germany - was the highest-profile industry event at San Sebastian, which has otherwise been a lacklustre affair so far. With the festival inevitably feeling the impact of the terrorist attacks in the US, Harvey Keitel has been the only US star to visit the Spanish town, supporting searing concentration camp drama The Grey Zone. "This is a difficult time for Americans as you can imagine," Keitel told reporters. "The Grey Zone is an important film to address, and where I can go to address it, I will."

Critics have judged the line-up as equally lacklustre. Most disappointing so far seems to have been English-language Spanish sci-fi Stranded. Complete with lines such as "I'm a geologist, that's why I keep my feet on the ground," it met with hoots of derision at Monday's press screening.