Hengdian sees growth in partners

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SHANGHAI – Liu Zhijiang, president Hengdian World Studio, said Thursday that his company – operator of the biggest film and TV back lot in the world - has grown profits 20% on average over the last five years.

In an exclusive interview with The Hollywood Reporter, Liu did not reveal actual earnings for the private firm a few hours from Shanghai, but pointed to its recent tie-up with other international content producers as evidence of its reputation for cost savings.

Hengdian is where Jackie Chan and Jet Li shot "The Forbidden Kingdom" -- an Apr. 18 U.S. release from Lionsgate -- and Liu said the studio sees hosting the production of 100 hours of television drama a year and 10 movies over the next three to five years.

To start out on this goal, Hengdian will begin a new partnership with Salon Films of Hong Kong, announced by Salon chairman Fred Wang last week at the Hong Kong International Film Festival.

"The first project will probably be a TV series, since Salon told us they have got some scripts," said Liu, whose 18 historic sets include a replica of Beijing’s Forbidden City. "We don't know the title and subject yet."

Hengdian offers complete film shooting services--from crew selection and extras casting, to prop and accommodations--but Liu said its real boast was about labor costs.

"If filming in Hengdian, the cost will be less than half that of the U.S. or Hong Kong," he said.

The Hengdian, Salon partnership will be finalized next month, Liu said. "In April, Salon will also introduce to us its three existing partners under the alliance agreement, including Singapore's Media Corp Raintree Picture, and Japan's Yoshimoto Kogyo," Liu said.

Wang of Salon said last week that partners also include investment fund Access Asia of the Cayman Islands.

Liu said he expects the partnership to bring in overseas producers with an interest in the Chinese market.

Liu said Hengdian will help its foreign partners get official approval for new TV or film projects, helping them avoid the trouble faced recently by the Weinstein Company when it had to relocate the Joan Chen, John Cusack movie "Shanghai" to Thailand and England after China denied it shooting permits.

"We can consult with experts and relevant officials in advance," Liu said. "That’s why foreign film companies need a Chinese partner."

In return, Salon and the other partners will supply modern film technology to Hengdian, some on loan and some permanent. "Currently, we don’t have any plan on purchasing new filming equipment by ourselves," Liu said.

A joint-venture digital filmmaking center also will also be part of the agreement, which will supply filmmakers with post-production services.

Hengdian sets have traditionally been offered to production companies for free, with profits coming from other revenue streams.

"Thanks to the reputation brought by the films shooting here, the most profit is from tourism and hospitality income," Liu said, adding that in the future, the company plans "to get some revenues from this digital center and post-production services as well."

Hengdian belongs to the privately held Hengdian Group. Since opening in 1996, over 500 films and TV series have been filmed there, including Ang Lee's international breakout hit "Crouching Tiger, Hidden Dragon."

- Alex Dai contributed to this report
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