“Cyprus needs headquartering,” insists Cyfield Group CEO George Chrysochos, who runs one of the largest development, construction and contracting companies in the country. “That is the way forward, as we emerge from the Covid-19 crisis and its economic consequences.”
“We need to make Cyprus like Luxembourg or Liechtenstein, a place where companies can find the talent, the support, and the legal and economic climate they need for their decision-making centre.”
Chrysochos notes that we have a good busines culture, low taxes and many attractions. “But we need to offer a greater talent pool, an active and digitally connected bureaucracy, and better-connected technology. We need to get these companies to make Cyprus their home with real local innovation.”
Cyfield is one of these innovators, moving fast and integrating new areas of activity as well as entering financial services.
Vertical integration and controlled supply chain
Although real estate and construction are in decline, Chrysochos, who spent some time at McKinsey before coming back to Cyprus, has developed strategies for diversification and the supply chain strategy that have kept his company in the black through the recent challenges.
The company contracts for infrastructure of all types, including roads, dams public and private buildings, high rises, marine projects, and sewage systems.
“Cyprus is small place. In order to be a contractor in Cyprus, you have to be able to do all sorts of projects; you have to be mobile, agile and flexible. In real estate, in development, in construction, activity is cyclical. So when one sector is in decline, the other sectors keep you busy and profitable.”
“This is why we are vertically integrated, with the entire supply chain associated with construction under our control, so that we can take any job, of any type, at any time,” he explains. “Otherwise, you cannot survive in these businesses on this island.”
Cyfield is also active in Greece, where it is building entirely new luxury apartment buildings, and in Egypt. But Cyprus is the main focus of its operations.
In Cyprus, construction and development have both been declining since the end of 2019, with the citizenship scheme issues and the pandemic reducing demand, according to Chrysochos.
“But local need for ‘bread and butter’ housing is still sufficiently strong, as is foreign interest in Cyprus villas,” he continues. “It’s not that demand has decreased; it has simply been postponed and it is re-emerging now. If you need a home, you buy one, assuming you have a job and can get a mortgage. Perhaps you delay for a month or two, due to current conditions, but eventually you make the purchase.”
Still, while the market is slower than usual, Chrysochos has led his company into new types of activity.
“We saw this decline coming, and so we have expanded into government contracting. We have 250 million worth of contracts which we will finish over the next two years,” Chrysochos says.
The company is building a gas-fired power plant at Vasilikos, which will provide cheaper electricity for the area.
The shares in this plant have been placed in a fund which is regulated by Cysec. Investors can buy shares in the fund, with the security that it is backed by the best regulation, and be assured of regular dividend revenue from a utility, he says.
“And we have another fund. We’ve securitised rental income from the many office buildings we have built, and that very secure revenue stream is available to those who take shares in the fund,” Chrysochos points out.
Chrysochos and his family have built this large, diversified conglomerate up from scratch – it was started by his father after he returned from studies in the US in 1990. He started with development, then got into construction, and finally contracting.
Today the company, on its traditional wing, has three asphalt plants, a concrete batching plant, factories for precast concrete products such as large diameter pipes and manholes, paving stones and building blocks, and quarries delivering high quality limestone aggregates, as well as another plant for ready-mixed concrete.