HONG KONG - Shanghai Hippo Animation, a leading Chinese cartoon producer, has struck two feature film production deals with Australian firms. It will also launch a $50 million production fund.

The deals with Vue Group and with ZAC Films were announced by the West Australia Culture and Arts Minister John Day and by the state's industry support agency ScreenWest.

"An elite team of 25 Australian creative animators will be employed, trained and developed at the Vue Group offices, which is located in Bunbury [near Perth, West Australia]. At full capacity this group will grow to 50 people making Bunbury a creative center for animation able to compete on an international level," said Day in a statement.

The deal with Vue will see Vue and Hippo co-produce a slate of films including "The Adventures of Marco Polo," "The Rabbit 2," and "Farm House 81: Perfect Friends." All three productions will be in English and then sub titled in Chinese to make them appealing to Chinese audiences. The combined production budget for the three films is expected to exceed $57m.

ZAC Films will co-produce at least three animated feature films with Hippo between 2014-2016, set as "Jungle Master 2," a sequel to the animated feature "Jungle Master" that Hippo produced and released in 2013, "Deep Sea," a family friendly adventure comedy being co-developed by both companies; and "The Awesomes," a project developed at ZAC's sister company ZAC Creative team and the Awesome Arts Festival.

Hippo, headed by Kerr Xu, is a ten year-old animation firm best known for its "Animen" and "Animen 2" features.

Hippo intends to launch its own private Western Australia/China Film Fund which will co-finance films. According to the ministry, the fund start with $10 million initially, with a target of $50 million. It will invest in projects from development through to production.

Chinese firms Toonmax Media, Hunan Aniworld Cartoon and Kuan Capital are also party to the deal with Vue.

Day estimated that in the second year of the VUE deal some $5 million in local production value will be added to the creative industries economy of South West Australia and that this will increase to $10 million in 2014/2015. He said it will also provide on-going employment and help to retain skilled workers.

"We might also look into some other potential live action and animation combined together," Xu told Australian media. Merchandizing and theme parks are also a possibility. "We are two hungry animals and we can combine our film-making forces together and look into international territory, and it might change the industry completely."

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