A £2m South Wales start-up film company is competing head to head with the big guns of Hollywood in a highly specialist sector of movie production.

Dragon DI (Digital Intermediate) is the only company of its type in the world to concentrate solely on the niche market of digital intermediate film production.

The business, set up by a Newport-born man, will ultimately take space at the £350m Valleywood Dragon International Film Studios complex at Llanilid. It aims to become a magnet for the world's lucrative film restoration post-production business.

Digital intermediate is the post production of feature films which now replaces the chemical and optical film treatment processes which have existed in the past.

Dragon DI's Newport-born managing director Tony Ray said: "What we have developed in South Wales is enormously exciting. We have brought something to Wales which is unique in the world and people in the industry are being forced to sit up and take notice. "By being based in Wales we can offer a service the equal of anything in Soho or Hollywood but without the inflated costs associated with these places. We are already creating quite a stir."

Dragon DI, which has built its studios inside the former Sony manufacturing plant at Pencoed, Bridgend, plans to create some 30 highly skilled jobs over the next three years. Dragon DI, faced with stiff international competition, turned to former Newport designers Stills to create everything from its trademark to its signage and website.

Stills managing director Chris Carpenter said: "Dragon DI is unique and with that in mind we crafted a unique brand visual identity which properly identifies the business as a major player in the dynamic world of film production. "They are a high profile company, with no equal in Wales, who are competing for business globally with companies in places such as London and Los Angeles." Tony Ray, who returned to South Wales after 20 years working in design, film and media in London, said: "We were immediately impressed with the enthusiasm and interest Stills had for the project. "They were able to demonstrate that they had the skill and knowledge to do the job and we are very impressed with the work they have produced."

Dragon DI's offices were recently officially opened by world famous cinematographer and two times Oscar winner Jack Cardiff.

Tony Ray is pictured above with Jack Cardiff