Digital whales? We can do that: flooded with talent and armed with hot computers, Mexican animators want your business.

In the new Mexican romantic comedy Ladies' Night. starring Ana Claudia Talancon, the live action occasionally jumps to sequences featuring digitally animated versions of the characters' alter egos. It's the kind of high-end visual effects work that nut long ago would have been contracted to companies in the United States. But the movie, co produced by Disney's Buena Vista Films and Mexico's Argos Productions, used Ollin Studio, a Mexico City post-production company.

"There is a perception that Mexico is not up-to-date" technology-wise, says Alejandro Diego, CEO of Ollin. "But it's quite the contrary."

Until a few years ago, when it came to refining color, images and sound, even Mexican filmmakers and advertising agencies chose foreign post-production companies, Now. armed with the latest equipment and a new generation of high-tech workers to operate it. post production companies in Mexico are reclaiming the local market and looking beyond their herders to sell their services.

Diego estimates Ollin gets about 35% of Mexico's post production work, specializing in storyboard art, modeling, animation, texturing and illumination to create effects such as a digitally animated whale for a Banamex commercial and a dancing roll of bubble-gum-scented toilet paper for a Regio Kids commercial. Many of Ollin's workers are in their 20s and 30s.

Luis Lopez, 25, is a producer for a studio called Dos38 that has hired Ollin to do post-production work. Lopez says that the growing number of technology-related majors offered at Mexican universities has helped grow lifts kind of talent in Mexico. "In the past few years, a new generation of creative types arrived, brilliant people who bring a new kind of creativity" Lopez says. "And the market started to change."

A high Level of technology in post-production houses is essential for the advertising industry, says Gustavo Duenas, a creative director at the Mexico City office of the advertising firm FCB Worldwide. "Fifty percent of the quality of an ad is the idea and 50% is the production and postproduction says Duenas, whose company creates ads for S.C. Johnson, Grupo Modelo, Banorte, General Motors and Fujifilm.

In the past three years, FCB Mexico has slowly decreased dependence on foreign post production companies, Duenas says. "We still send work out of the country, but each year less and less." he says. "There will continue to be a certain percentage we send (out of Mexico), because there is always a delay for new technology to arrive in Mexico."

In the past few years, a big competitor for Mexican post-production has been Argentina, where a historic financial crisis forced prices of such work to dip to a third of Mexico's costs. Industry insiders estimate that about 30% of Mexico's post-production business has gone to Argentina since 2001.

Mauricio Menendez, CEO of New Art Digital, figures his company does nearly 40% of Mexico's post-production work. He has lost clients to Argentina in the past few years. "It would be stupid to say that it hasn't affected us," Menendez says. "However. eight of 10 of our clients that have left to work [in Argentina] have come back to us. and we didn't offer them more than quality services with cutting-edge technology."

As Ollin Studio executives look to the future, they hope to serve not only Mexican clients, but to export their services to the United States, Europe and Latin America. "This work can be done anywhere now," Alvaro Hernandez, executive producer at Ollin, says. "I think people are slurring to see Mexico not just as a cheaper option but as a better option. It's a country of artists with a strong artistic culture, and we incorporate that in our work."

The market has shrunk in the past two years as companies react to the economic slump by slashing advertising budgets, causing several of Mexico's post-production companies to close. But those that have survived are eager to show filmmakers and advertising agencies in Mexico and around the world what Mexico has to offer.

It's the brains behind the machines that, have developed the industry in Mexico, post-production chiefs say. As Argentina has recovered--and raised prices--the chance to show off has only increased.

Corrie MacLaggan * Mexico city