Lebanese drinks giant chooses Cyprus for EU expansion

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Kassatly Group Holding, a major player in the regional beverage sector, will expand to Cyprus next year, boosting its manufacturing and exports while putting the island on the radar of other major players.

Following success in attracting fintech and high-tech investments, Invest Cyprus welcomed a key player in the regional beverage industry to the island.

Lebanese drinks giant Kassatly announced that it had started work on a new plant in Cyprus as part of ambitious plans to transform the brand from a regional powerhouse to a global player.

Kassalty said its ‘mega plant’ would be built in Ypsonas, Limassol, operating under the company’s local entity Boutique Beverage Bottling International Ltd.

In addition, the company said it aims to make Cyprus its home within a year, creating more than 100 new jobs.

The plant should be fully operational by the end of 2023 to propel the company into the European market.

Kassalty attributed its decision to move to ‘business-friendly’ Cyprus’ favourable tax regime and services provided to foreign investors.

“The tax incentives in Cyprus are attractive, but it is the geographical advantages to Europe, Africa, the Gulf countries and the Americas, which are most appealing to us and, most importantly, having Mediterranean and European seals on our products, something coveted by consumers worldwide,” company founder Akram Kassatly said.

He said the team’s input, advice, and professionalism at the national investment promotion agency, Invest Cyprus, made the experience pain-free.

“Invest Cyprus played a huge role in our decision to make Cyprus our base,” said Akram Kassalty.

Invest Cyprus Chief Executive Officer George Campanellas said it was always “a pleasure” to accommodate companies searching for new markets in Europe and beyond.

“We are delighted to be able to provide the kind of platform that an ambitious company like Kassatly Group needs to fulfil its global aspirations”.

Officials sources told the Financial Mirror that Kassalty’s Cyprus move would allow for easy access to the EU markets.

“This is a huge venture for the company, but one with benefits for both Kassatly and Cyprus’ economy,” said the source.

Apart from the 100 jobs created at the plant, the company has bought land, which it will develop, creating more local hires.

“Furthermore, they will use local resources, boosting the local economy.

“The state will also see revenues from taxes flowing to its coffers, while exports are also boosted.”

Kassalty chose Ypsonas as it is close to the Limassol port, meaning that transportation costs would be low.

“Nevertheless, there will be a need for a fleet of trucks and drivers, creating even more jobs.”

Cyprus’ higher labour costs, compared to Lebanon, combined with the higher water and electricity rates, were offset by the favourable tax regime.

The company’s plans also include installing RES projects, which are expected to reduce energy costs.

“But at the end of the day, we need to note that this is an expansion move, with Cyprus being the most obvious option, offering the opportunity to trade with the EU without hefty taxes.”

Other manufacturing firms are expected to follow Kassalty to Cyprus.

Kassatly sprang to life in 1974 with a bottled fruit syrup called Jallab.

A revolutionary product at the time, the Beirut-based company quickly built on this success with several new beverages, including liqueurs, award-winning wines, a mix of alcoholic and non-alcoholic party drinks, and the successful 2014 Beirut Beer project