Cyprus businesses pessimistic
in overseas plans
Nearly two thirds of Cypriot
businesses do not want to expand overseas
and of those who do, more than half want to
embark in safe trade, avoiding adventures
into high-risk investments and challenges, a
corporate survey has found.
In a telephone poll of 2,000 business
executives in companies employing at least
people conducted in January and commissioned
by the World Trade Centre Cyprus, CMR
Cypronetwork Market Research concluded that
only one in five or 21% have overseas
operations or are actively involved in
foreign markets.
Of those, 58% have trade cooperation with
local enterprises, 27% operate trough
exclusive agencies and only 15% have
independent operations, including
franchising and joint ventures.
Most of the Cypriot businesses have a
presence in Greece (48%), followed by the
U.K. (35%), Germany (17%), France (14%),
Lebanon (13%) and Romania (13%).
Other business destinations include Sweden
(12%), Austria, Belgium, Italy, Bulgaria and
Russia (11%).
Greece is more popular among trade and
services companies, while the U.K. for
industrial and trade companies.
As regards exports, 29% had trades worth
less than CYP 100,000 (EUR 172,000), 7% had
exports of CYP 100,000-250,000 (up to EUR
430,000), 5% had CYP 250,000-500,000 (up to
EUR 860,000) and 16% booked deals worth over
CYP 500,000 (EUR 860,000). However, a
worrying 43% did not respond to this
question at all.
Only 32% of the 21% that have already
established foreign business activities are
interested in further overseas business,
which suggests that Cypriot business people
are hesitant to enter new markets or take
risks overseas.
The pessimism continues as of those who do
not have any overseas presence, 73% are not
at all interested in doing any business
abroad. Only 6% are keen to enter foreign
markets, with the remaining 21% as yet
unsure what they want to do.
At least the ones who are interested to go
overseas are very keen to do business within
the next six months (39%) or 7-12 months
(22%), with a further 22% looking at a
medium-to-long-term plan of one to two
years. Of these most are interested in
services, industry and trade. Construction
is the most popular segment of those who
plan to expand over the next year or two.
As regards the challenges, the biggest
concern is human resources or the labour
force (32%), followed by a lack of knowledge
of foreign markets (24%) and insufficient
capital (19%).
Looking overseas, all of the other 26 EU
member states are target countries for
overseas expansion with Greece leading the
pack attracting 38% of those interested,
followed by the U.K. (32%), Romania (28%),
Bulgaria (26%) and Germany (20%), with the
Baltic states and Luxembourg attracting
12-13% interest.
Among Middle East opportunities, only 10% of
respondent to the CMR survey said they would
be interested in Lebanon, followed by Jordan
(7%), Saudi Arabia (6%) and the UAE (6%).
Russia was at the bottom of the list with
5%, while responses for Africa, Asia, the
Americas and Australasia did not register in
the survey.
In preparation for overseas expansion, some
65% said they were ready to increase their
output to meet foreign demand.
According to the survey, 67% consider
quality of service to be their best traits
of whom 81% are from the industrial sector.
A further 34% believe that know-how is an
advantage (of whom 71% are in the
construction sector), while 26% claim they
have a price advantage that will help them
break into new markets. ‘Value for money’
only accounts for 3% of the respondents’
opinion of themselves.
Market research (41%) is by far the most
sought-after service most enterprises
believe they need in order to enter new
markets, followed by financial support (28%)
export planning (21%) and promotion (14%).