ASELSAN has Joint Production Targets with Dependable and Reputable Local Organisations and Companies by way of Technology Transfer

Defence Turkey: It is noted that ASELSAN achieved a phenomenal success in 2012. Within this context, what are the figures in terms of production, investment and R&D activities?

Within the scope of the ATAK, MILGEM and JEMUS contracts, the deliveries of the products, the production of which are completed, were realized in 2012. The last five lots of the Pedestal Mounted Stingers - as Turkey’s first national air defence system- were delivered and the project was concluded successfully. ASELSAN has been carrying out a total of 270 projects at its R&D centres.

Our premises at Gölbaşı that will carry out activities in the areas of Radar, Electronic Warfare and Intelligence Systems was largely completed in 2012 and relocation activities will take place during the first quarter of 2014.

While the field of activities of our Kazakhstan ASELSAN Engineering (KAE) company established in Kazakhstan is expanding day-by-day, a new company was established in Jordan under the name "ASELSAN Middle East." Our joint venture company "IGG-ASELSAN Integrated Systems", which has been performing activities in the UAE, continues the production of Remote Controlled Stabilized Machine Gun Platform (STAMP) and Remote Controlled Stabilized Naval Gun System (STOP).

A total of 1,930 engineers are employed at four R&D centres of ASELSAN and within Teknokent location. Every year, ASELSAN finances the R&D expenditures from its equity capital, which are nearly 7% of its turnover.

Defence Turkey: How do you assess ASELSAN’s export activities in 2012?

ASELSAN, as the pioneer and leading Turkish company in the defence industry, should achieve similar success in overseas markets in order to continue its steady growth. Targeting only on the domestic market has been one of the significant barriers for the development and expansion of defence industry companies.

From this perspective, we, as ASELSAN, have identified overseas markets as our new target as from 2013 and in the last few years we started to harvest the fruits of this planned work. Considering the fact that the overseas success is achieved through direct sales as well as cooperation with supplier countries and platform producing companies, substantial efforts were made in particular after 2010 and as a result of this, significant success was achieved in export as a local producer in 2012 by establishing partnerships in Jordan, UAE and Kazakhstan.

In 2012, the successful conclusion of the studies performed for the purpose of using ASELSAN products in the platforms produced by international land platform producers should be evaluated as a standalone success story and as a stepping stone for the sector.

Within this scope, 2012 has been a successful year in terms of localisation in potential markets and in conducting cooperation studies with platform producers as a system supplier. This success has proven the appropriateness of our strategy.

Aside from total turnover, ASELSAN has used all of its efforts for increasing its export activities and has entered into a total struggle, so to speak, in order to achieve success in this field.

In this way, despite the fact that the economic crisis took place in the world economy in 2012 has had a negative effect on the countries’ defence supply budgets and has led to a more aggressive policy implementations by the leading countries in the global defence industry, ASELSAN realized 265% increase in exports compared to the previous year with a total volume of 174 million USD in 2012.

Based on the forecast that the effects of the economic crisis will continue in the period ahead, we are determined to continue the same rigorous work in 2013 and beyond.

Defence Turkey: Could you please inform us on ASELSAN’s export-oriented products and capabilities?

In the defence industry, especially in the defence industry exports, another very important issue is the necessity of possessing the capability to design and produce indigenous products and systems aside from offering competitive products and systems to the end user in terms of price and quality.

In cases where this necessity is not fulfilled and indigenous technology is not available, the restrictions placed by the licensees and/or the governments of such licensees play a decisive role in the exportation of products produced under license to third countries.

As I explained previously, ASELSAN allocates approximately 7% of its turnover from its equity capital directly to R&D activities each year and has the flexibility to offer its own indigenous products and systems to the use of overseas customers only with the permission of the relevant authorities of the Republic of Turkey, irrespective of any export permissions and restrictions of other countries.

Due to the importance attached to R&D and therefore the development of indigenous products and systems since its establishment, ASELSAN has become a position to compete in the international defence industry and since 2006, has maintained its position amongst top 100 defence industry companies in the world as a pioneer Turkish company by constantly setting a higher standard. It is a pleasure for us to see TAI together with ASELSAN in the list announced in 2012. The further increase in the number of Turkish defence industry companies in this list will contribute to the recognition of the Turkish defence industry in overseas markets.

Defence Turkey: Could you please enlighten us on the projects and programmes that ASELSAN is conducting with other countries’ Armed Forces?

As you know, the defence has its own distinctive mechanism and processes. It is not a sector which has important national and international permit applications and where the projects realized with end users can be explicitly declared. Within this respect, despite the fact that it is not possible to give detailed information on every project that we carry out, we have significant collaborations with countries such as Jordan, UAE, Kazakhstan, Azerbaijan, Uruguay, Pakistan and Saudi Arabia in the fields of Military Communications, Electro-Optic Systems and Stabilised Gun Platforms.

Defence Turkey: ASELSAN has realised deliveries to the Royal Netherlands Army within the scope of the 18 Stinger Launching System Project. What could you tell us regarding the feedbacks you received after the deliveries and what is the latest status of the Project?

Within the scope of the contract signed in 2005 regarding the requirements of the Royal Netherlands Army, the delivery of 18 Stinger Launching Systems and the related Logistic Support Equipment were completed in 2008. Despite the very tight delivery schedule of the KMS Netherlands Project, it was completed in time and the systems were delivered as per the plan with the devoted and prudent efforts of ASELSAN teams. With this project, ASELSAN acquired an important reference in the sales of its products in overseas markets and made a significant contribution in the recognition of our company in the international arena. With the project, the first exportation of an advanced gun system to Europe was realised.

In the meetings held during the project cycle and during test activities, the end user (Royal Netherlands Army) and the procurement authority (Defence Material Organisation – DMO) expressed their satisfaction and appreciation at every turn relating to the performance and the results achieved by ASELSAN.

At the delivery and handover ceremony of the 18 Stinger Systems by the procurement authority (DMO) to the end user authority, Rear Admiral Visser - President of DMO used the following words in his speech:

"… this system is absolutely very modern and has unique specifications. It complies with the functional requirements in full (even more) and in respect to performance the system can challenge every other Stinger Weapon Platforms on the world."

Within the scope of the Project, the delivery of which was completed in 2008, four-year Maintenance and Repair contract was signed on 25 December 2008 and completed in 2012 and the second four-year Maintenance and Repair contract is at the signing stage. Within the contract coverage, activities regarding Engineering Support, Configuration Management, End-of-Life Material Management, Document Management, Unit Level Maintenance and Repair Training and Maintenance and Repair are being carried out.

Defence Turkey: What are your plans for the coming year within the framework of marketing activities relating to exports and overseas platforms?

In the coming period, we plan to continue our policies, which we believe we have been implementing successfully so far regarding the localisation in potential markets and collaboration with national and international platform producers towards third countries. With the support of our strength in engineering, each and every development that we achieved on indigenous products and systems will open up new horizons and markets for us and with appropriate and correct strategies, we will continue to obtain significant successes in these markets. We aim to continue and increase the volume of overseas contracts, which was recorded as 200 million plus USD annually during 2011 and 2012, in the coming period as well.

Defence Turkey: What are ASELSAN’s targets relating to export increase in the Middle East, Asia and the Pacific region markets? Are there any new investment and joint production plans through technology transfer in these regions? Is it possible to outscore and get ahead with investment and joint production programme strategies against your competitors who have moved ahead with the loan mechanisms provided to these countries? What are your assessments on this issue?

In order to attain a medium and long-term sustainable and consistent export potential, ASELSAN identifies target regions planned to be included within the coverage of export activities by evaluating up-to-date international policies, existing political and economic conditions, international policies and relations that Turkey pursues and existing co-operation and relations that ASELSAN has with the relevant organisations, agencies and companies in other countries and maintains its activities in the said regions/countries in the related following period.

The Middle East, Asia and Pacific countries continue to be important at ASELSAN’s target regions and are amongst the target countries in which ASELSAN’s activities are being conducted intensely.

In the said regions, ASELSAN has joint production targets with dependable and reputable local organisations and companies by way of technology transfer in addition to the direct sales. As the most notable example, we can point to Pakistan where local production has been realised for many years with ASELSAN technology.

Similar activities in the Middle East and Gulf Region commenced with the IGG-ASELSAN Integrated System (IAIS) Joint Venture established together with the International Golden Group company in the UAE. The IAIS Joint Venture was founded with the aim of local production and maintenance and repair of our stabilised gun systems for Naval platforms. In Jordan, ASELSAN Middle East Company established together with the King Abdullah Design and Development Bureau (KADDB) is one of our investments that performs activities with the aim of producing night vision and optical devices locally.

In Saudi Arabia, within the framework of an agreement signed with the local King Abdulaziz City for Science and Technology (KACST) organisation, the studies initiated with technology transfer for the development of local waveform for ASELSAN software-based radio are being performed. In addition, discussions and negotiations are being conducted for the production of ASELSAN software-based radio in Saudi Arabia.