MUMBAI: Hyderabad-based Color Chips (India) Ltd is planning to invest Rs 350 million in setting up an animation production centre at Visakhapatnam in Andhra Pradesh as part of its expansion plans.

The company has already acquired three acres of land and in the first phase will develop 40,000 sq. ft. of space which will house 350-450 people. An area of 100,000 sq. ft. will be finally developed with a 1,000-seater facility.

"The first phase will require an investment of Rs 100 million and should be completed by 2007-end. We expect to set up the 100,000 sq. ft. facility by 2009 and plan to invest a further Rs 250 million for this," Color Chips chairman and managing director Sudhish Rambhotla tells Indiantelevision.com. The centre will be mainly used to provide high-end graphic solutions, special effects, 2D and 3D animation production and also house an animation-training facility.

The company has fresh orders worth $18.5 million which it will execute within three years. This is in addition to the $1.5 million contract it has recently announced with Australia-based Albert Tross Productions for providing animation and creative services for a series of 26 episodes.

"We can't reveal the name of the companies we have just signed up with. The $18.5 million contract will include our share in the global rights. We will be doing animation and graphics for the movies," says Rambhotla.

By setting up a new facility in Visakhapatnam, Color Chips will spread out geographically and tap talent from the neighbouring states of West Bengal and Orissa, adds Rambhotla. The company already has a facility in Hyderabad.

Color Chips plans to raise up to $10 million through FCCBs (foreign currency convertible bonds). The company is getting into motion pictures business and has lined up two movies for production at an estimated cost of Rs 150 million. While Krishna will be an animation film, Mukhbiir is a live action film. "We expect to release Krishna in early 2007 and the second film later in the same year," says Rambhotla.