Cyprus manufacturing employs approximately 40,000 workers and contributes around 10% to GDP despite lacking heavy industry such as steel production or automotive manufacturing, according to industry data.
The sector has developed specialised capabilities in food production, pharmaceuticals, chemicals, plastics and emerging materials technologies, with halloumi PDO and pharmaceutical preparations forming export pillars valued above €600 million annually.
Michalis Antoniou, Director General of the Cyprus Employers and Industrialists Federation (OEB), explained that Cyprus lacks capital-intensive heavy industry primarily due to limited market size restricting economies of scale, insufficient natural resources and geographic location affecting transport costs and competitiveness.
“Cypriot industry has managed to develop dynamically in other sectors and maintains valuable production units with significant contribution,” Antoniou stated in a recent interview.
Cyprus operates food and beverage industries, construction materials production, chemicals and plastics manufacturing, alongside emerging sectors utilising specialised technology and expertise, according to OEB data.
The defence industry produces dual-use products supporting national defence and security, whilst biotechnology applications focus primarily on healthcare. Circular economy initiatives and advanced materials manufacturing represent additional growth areas.
Antoniou reported significant recent investments across multiple manufacturing sectors from domestic and foreign sources, confirmed through industry acquisitions, foreign-interest facility installations and substantial interest in Energy Ministry grant schemes for manufacturing.
Government grants worth tens of millions of euros have supported industrial investment programmes covering new equipment, machinery and infrastructure purchases through ministry funding schemes.
OEB recently submitted proposals to the Energy Ministry for the new National Industrial Policy 2025-2030, awaiting Cabinet approval shortly.
The federation identifies industry challenges including skilled worker shortages, education-industry skills mismatches, energy costs, administrative burden and excessive regulatory obligations whilst maintaining potential exists for further sector strengthening.
“There are possibilities for further industrial sector enhancement to unlock tremendous potential, improve our industrial product competitiveness, and legitimately claim expanded GDP contribution,” Antoniou stated.
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