The makings of a robust industrial base have long been in place in Cyprus.
The Country has a deep pool of well-educated human capital, sophisticated infrastructure, and a strategic location with high connectivity that makes it the ideal springboard for European manufacturers keen to expand into the markets of the East and vice versa. The government has placed strong emphasis on further developing the manufacturing and industrial sector. Incentives are already in place for investments in fixed assets and industrial equipment, while innovation projects in the industry are supported by state funding to promote results-oriented research.
Cyprus has a vision to create a robust, flexible and technologically advanced industry through the gradual implementation of a new National Industrial Strategy Policy for 2019-2030. Its mission is to develop more high-value-added innovative products and services that will contribute to the competitiveness of Cyprus, and increase industrial productivity by strengthening the industrial ecosystem and investing in sustainability, innovation, digitalization, infrastructure and skills.
The Ministry of Energy, Commerce and Industry (MECI) has finalized its new strategy, which echoes the EU’s renewed industrial policy that highlights digital transformation and envisions smart factories increasingly powered by renewable energy producing high value-added and ‘green’ products – a formula that has already been embraced by Cyprus’ leading manufacturers to compete globally. Access to finance and export markets will be improved, along with new tax and other incentives to attract foreign direct investment in high-tech and knowledge-based industries. The strategy will incentivize greater use and development of renewable energy resources (RES). Installing new, clean energy-powered heating and cooling systems in factories will be a priority.
With the government committed to meeting 13% of Cyprus’ energy needs with RES by 2020, the clean energy industry is ripe for foreign investment.
The island aims to become a hub for solar innovation, technology transfer and startups. Photovoltaic parks are a growth area ready for more investment. The national strategy is also proceeding with a techno-economic study for industrial sustainable management of waste and assessing the capacity to generate electricity from better waste management in industrial zones. In addition, the study will examine the possibility of installing treatment plants for wastewater from food and wastewater industries. The results of the study will eventually create new grant schemes and other incentives for industries and SMEs to promote and make use of cyclical economy technologies, applications and standards.
The high proportion of small-to-medium-sized (SME) manufacturing enterprises means that companies have the flexibility both to respond quickly to changes in customer requirements and to adopt new production techniques. The highly educated Cypriot labor force – the island’s trump card – means that new technical skills can be rapidly assimilated, facilitating fast turn-around times.