DreamWorks Animation SKG Inc., creator of the hit "Shrek" films, is bulking up in a big way.
The company this week will begin an $85-million project to expand its 13-acre Glendale studio, adding 100,000 square feet of new production space and more than 500 jobs in the next two years.
DreamWorks is growing quickly at a time when many other Los Angeles-area film companies are cutting back in the face of a sputtering economy and a slowdown in film production, delays partly caused by difficult contract talks between studios and Hollywood's biggest actors union.
The new construction largely reflects the company's ambitious entry into 3-D filmmaking, as well as the enduring popularity of family-oriented computer-animated films.
"The business is flourishing and there is a good reason for [DreamWorks] to be hiring so many people," said Ron Diamond, co-founder of Animation World Network, an animation publishing group. "This is a very positive time for animators."
Although some independently produced animated movies have misfired, the leading studios continue to reap big rewards from such films and the merchandising revenue they bring in. Walt Disney Co.'s Pixar Animation Studios scored another hit this summer with "Wall-E," which has grossed more than $212 million domestically.
DreamWorks' "Kung Fu Panda" has become its second-most successful film behind "Shrek 2," grossing more than $560 million worldwide.
Calling the "Kung Fu Panda" box-office take "a significant achievement," Wedbush Morgan Securities last week raised its third-quarter earnings estimates for the company. DreamWorks shares, which closed Friday at $31.04, have climbed more than 20% this year after falling 13% last year.
The studio, which typically produces two or three animated movies a year, has seven films in production, including "Monsters vs. Aliens," set for release in March and a sequel to "Madagascar" due out in November. The company also is in talks to produce a sequel to "Kung Fu Panda."
"We drew the right straw," DreamWorks Animation Chief Executive Jeffrey Katzenberg said. "We're in the one part of the entertainment business that just continues to show tremendous growth, in the international market in particular."
With a growing pipeline of movies, the company needs more space to support a workforce that has grown by several hundred in recent years. The company now employs 1,700, including more than 400 at its PDI/DreamWorks facility in Northern California.
