HONG KONG – IMAX and UA Cinemas Monday announced plans to build a second IMAX theatre in the territory. The new large format theater will be part of a five-screen, 900 seat multiplex within the iSQUARE commercial and retail development in Kowloon planned to open by end 2009.

The new screen at iSQUARE will be the first in Hong Kong to utilize the recently unveiled IMAX DIGITAL projection system, rather than the film based MPX system that has been used to date. System allows multiple uses including projection of live venue events.

Exhibitor UA Cinemas said it also expects the digital projection system to deliver lower costs. Instead of large format film prints costing some $22,000 each it will screen from hard drives costing around $1,000.

The move is a further push for IMAX into the emerging large format, “super premium” cinema service sector in Greater China and comes as cinema operators in Hong Kong struggle to diversify their services in an crowded exhibition market.

In the last year IMAX also inked a 10 screen contract with China’s Wanda group and a 5 screen China contract with another US offshoot Lark Entertainment. When completed, by the end of 2012, they will lift total number of IMAX screens in Greater China to 43 by the end of 2012. Some 26 of those will be in commercial setups and the rest in museums and educational facilities.

IMAX believes there is still more room for expansion. “We think there is room for another 2 to 3 IMAX screens in Hong Kong, if located strategically around the territory,” Don Savant, MD for Asia Pacific for IMAX, said.

IMAX films released have generated outstanding per-screen averages in Hong Kong. 2007’s “Beowulf” grossed $49,000 in its first four days in the first UA IMAX theater in Hong Kong, a phenomenon considering its 200 seat capacity.