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Cyprus Duty-Free Complex Targets Retail Trade

Sales: Privately operated merchandise mart, to open this summer, will provide a huge exhibition hall and a bonded warehouse.

May 30, 1996|From Reuters

NICOSIA, Cyprus — A shopper's dream is nearing completion in Cyprus--thousands of square feet of duty-free shopping.

But the imposing new building of mirrors and sandstone on the outskirts of the capital, Nicosia, is off-limits for dawdling window shoppers.

Project managers of the International Merchandising Centre have opted to keep the masses out of the exhibition hall that is scheduled to open its doors to a select clientele this summer.

The center and its backers have instead targeted the upscale professional who will be able to inspect duty-free goods, clinch a transaction and then ship the goods back home with the minimum of fuss.

The building is a permanent exhibition space with extensive storage facilities where tenants will be able to sell their goods to customers handpicked by the center for credit-worthiness.

It is geared toward buyers in a region extending from Poland to Yemen and Saudi Arabia, and managers of the center say its tenants will be able to penetrate difficult markets such as Russia.

"There are many people who want to start business with Russia but are scared of dealing with the Russians because of the Mafia and of the poor banking system," center director Antis Demetriades said in an interview.

"Through IMC they will test the Russian market, the Eastern bloc market or even the Middle East market. This will open doors to business opportunities," he said.

Only approved clients, tenants and their staff will be allowed access to what is described as the route to a market of 750 million consumers in more than 45 countries.

At a cost of $30 million, managers say it is one of the most expensive privately funded projects ever undertaken on the island, a unique addition in the region to boost Cyprus' already established position as a business and services center.

Funded by the Arab Bank, Cyprus Development Bank and center Chief Executive Andreas Kaisis, the complex is scheduled to remain open all year round.

"The response has been tremendous," says Demetriades. "There is a lot of interest from the Middle East and the importance of IMC to the region is highlighted by the involvement of Arab Bank as financiers of the project."

The center will earn a 1% commission on sales and receive income from leasing. Managers are optimistic that, provided everything goes according to plan, the center will be profitable in the first year of operation.

"Traders will use the IMC as a permanent showroom for their products, which they can sell duty free," said IMC Deputy General Manager Costas Antoniades.

"That is one side of the coin. The other side is for us to find members [buyers], and this is why we are organizing a large number of [marketing] campaigns."

Organizers say the center will enable buyers to supply retail outlets with optimal management of time and money, buying a wide range of items during one visit, and without quantity restrictions. Warehouse stocks will be controlled by a centralized computer system.

"Goods stored will be free of customs duty in a bonded warehouse under the control of the customs office, so all products in the warehouses will go directly to the country where the buyer is," Antoniades said.

Twenty thousand square yards of exhibition space covering four floors will be rented out to tenants. Demetriades and Antoniades said 40% of available exhibition space has already been booked, but he expects more to be snapped up as the launch date approaches.

"People will usually book one month in advance before the opening of the center. . . . A lot of people are waiting for the last minute," he said.

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