``BY ADAPTING OUR PROVEN PIKET3000 EPKIS SOLUTION FOR SUBMARINES, WE AIM TO BE READY FOR MILDEN AS WELL!``

Defence Turkey: How did YALTES do in 2021 in terms of financial performance and turnover. In our April 2021 interview you mentioned that ‘2021 will be a year in which sales of YALTES will increase by 60% reaching the level of TRY 120 million.’ Did you manage to reach this goal? Did the recent increase in exchange rates have an impact your turnover and export figures?

Bülent HAMZAOĞLU: In the interview we made in April 2021, we stated that our sales target, especially our orders, cash flow, and profitability targets, would increase compared to previous years, and fortunately, despite the pandemic and negative economic conditions, we achieved our targets beyond our expectations. We achieved this success with our workforce working with devotion day and night, and I would like to express my gratitude to all of them.

In our company, the costs are calculated based on a percentage of completion in line with the global financial rules, and most of our costs (including the material and service procurements we made in the domestic market) are based on foreign currency. Therefore, the increase in the exchange rates did not have any positive or adverse effects on our financial figures. In short, we are happy to have realized our targets for 2021.

Defence Turkey: How has 2021 been for YALTES? Can you summarize the prominent developments of 2021?

Bülent HAMZAOĞLU: 2021 has been an intensive year for YALTES in terms of sales and delivery. Within the scope of our ongoing contracts, we delivered the DIMDEG (TCG Derya) Combat Management System equipment and hardware, the 1st group of EPKİS (Integrated Platform Management System/IPMS) equipment and hardware, the 1st groups of  I-Class and PN MILGEM EPKİS (Integrated Platform Management System/IPMS) Projects (a total of three-vessel sets), the Combat Management System equipment and hardware for the New Type Patrol Boat project conducted by the Dearsan Shipyard and the EPKİS (Integrated Platform Management System/IPMS) System, the navigation and helicopter control radars we provided for the Bangladesh navy as part of our exports, several purchase orders and the military consoles and cabinets we provided for the defense industry companies such as ASELSAN, HAVELSAN, METEKSAN, and ARMELSAN.

The greatest achievement of 2021 has been the ship integration of the MÜREN-PREVEZE Project, the FAT, and Integrated FAT activities, which were accomplished in 2020, and the completion of the HAT activities. In this context, our five different types of equipment and hardware that have been designed indigenously and nationally for the first time and that were qualified in the first run after tough tests have been seamlessly integrated into the indigenous MÜREN Combat Management System supplied by TÜBİTAK. As YALTES, we proved that we are ready for the prospective modernization and MILDEN projects.

In 2021, we accomplished the critical design review of the equipment/hardware incorporating numerous technical innovations we will be providing for the Type 31 Frigates of the Royal British Navy, and this project was of great importance for YALTES in 2021.

As another development, in 2021, we were assigned to the integration of the communication systems of the platforms that were exported via Turkish Shipyards by Thales Communication Systems. In this context, we accomplished the cabinet manufacturing and ship integration of four special-purpose boats and two vessels. Our activities for one other platform are in progress.

In terms of the new projects, we signed the contracts for the Offshore Patrol Vessel and Ukraine MILGEM EPKİS (Integrated Platform Management System/IPMS). In this way, we included our PIKET3000 System we designed indigenously into 13 MILGEM platforms that have been either launched or under construction. 

We made a revision in our engineering organization in 2021 and moved on to the product line structure. Thus, by increasing the specialization in our product lines, we built more productive teams that have acquired expertise in cutting-edge technology. We aim to see the results of this new structure in our following projects.

Defence Turkey: What are your expectations and targets for 2022? What would you like to say about your scheduled domestic and international deliveries?

Bülent HAMZAOĞLU: 2022 will be a year where the conditions at the beginning of 2021 (the pandemic and economic uncertainties) continue to increase. YALTES will be responsible for more deliveries and acceptances in 2022 compared to 2021.

To summarize, we will deliver the equipment/hardware of the 2nd, 3rd, and 4th vessels as part of MÜREN PREVEZE, equipment/hardware of the 2nd and 3rd vessels of the BARBAROS (MLU), the 1st and 2nd ship equipment/hardware of the Type 31 Project, vessel set equipment for the Indonesian Navy and the 1st, 2nd ,3rd and 4th Vessel equipment/hardware as our Combat Management System Product Line within the scope of PN MILGEM. The entire equipment and software packages of DIMDEG as part of our EPKIS product line and the I-Class Frigate, PN MILGEM (4 ships), and Ukraine MILGEM will be delivered.

The ship integration of the navigation and helicopter control radars that were delivered to the Bangladesh Navy will also be completed in 2022.

In 2022, our various military console and cabinet deliveries within the context of purchase orders will continue for defense industry companies such as ASELSAN, HAVELSAN, METEKSAN, and ARMELSAN.

Defence Turkey: Can you inform us about YALTES' major export activities, the company's most critical export markets, and export share in the turnover? Thales Netherlands (TNL) was declared as the Type 31 Class Frigate Program's first largest supplier in August 2021. YALTES signed a contract for the supply of the MOC Mk4 new generation operator consoles of the TACTICOS Combat Management System (CMS) also in 2021. The delivery of the CMS system to the TNL for the First Type 31 Frigates was planned to take place in 2021. Has this been completed?

Bülent HAMZAOĞLU: As I mentioned previously, in the Type 31 project, the Critical Design Review stage was completed in 2021, and the deliveries will start in 2022. We received an order in 2021 for the ship equipment set to be supplied to Indonesia, and this equipment will be delivered in 2022 as well.

We project the share of exports in YALTES' 2022 turnover to be around 60%, including the export projects we run with our domestic companies. We hope to increase this share with the new projects that may be realized in 2022.

Defence Turkey: As a company that provides indigenous solutions, YALTES has been placing great importance on updating its product portfolio. Which topics stand out in terms of R&D and Product Development areas in 2022?

Bülent HAMZAOĞLU: YALTES is within the structure of the Thales Group, and it has been allocating nearly 3% of its turnover to R&D in line with this Group's approach. In this respect, two R&D Projects titled Combat Management System equipment adaptation to contemporary technologies and updating our Combat System Video Network Solution have been planned for our Combat Management systems product line. Regarding our EPKIS product line, we will launch our R&D project on the adaptation of EPKIS for submarine projects in 2022. 

Defence Turkey: Thales France (TDMS-Fr) selected YALTES and YALTES BV as the exclusive support provider for the Electronic Warfare Systems and Radars under the Long Horizon Project. Are there any activities regarding the modernization of the Long Horizon System that has been in service for many years? Have you received any requests regarding this?

Bülent HAMZAOĞLU: YALTES and YALTES BV companies can give an offer in case of any request for supporting Thales products under the Long Horizon Project. To date, no demand for the modernization of such systems has reached us.

Defence Turkey: The Integrated Platform Management System/IPMS (EPKİS)  produced by IMTECH located in the Netherlands was used in the first two vessels (MILGEM 1 and 2) within the MILGEM Project. A YALTES product PIKET3000 EPKIS System was employed in the MILGEM 3rd and 4th vessels. It was declared that EPKIS manufactured by IMTECH would contain 6,000 control and monitoring points. How many control and monitoring points are included in the PIKET3000 System in the MILGEM 3rd and 4th vessels? Is the replacement of TCG Heybeliada and TCG Büyükada Corvettes' EPKIS System with the PIKET3000 planned? Is there a contract or a schedule for such a replacement? 

Bülent HAMZAOĞLU: Though the products supplied for the first two vessels were provided by cooperating with IMTECH company, the adaptation, production, integration, and launch processes were entirely conducted by YALTES engineers and experts. All developments and software specific to the project were accomplished by YALTES engineers. Therefore, YALTES is completely competent in these systems. Our technical support regarding these systems continues uninterruptedly. We have the capacity to make all updates in line with the technological developments throughout the life cycle.  Our activities regarding maintenance level updates of certain components are in process. Due to some infrastructural differences and differences between certain finished products that are used, the replacement of the system in these two vessels with the PIKET3000 employed in the following vessels is not possible, but the same level of performance is achieved.

As they have the same sub-systems, the MILGEM 3 and 4 vessels similarly contain 6,000 monitoring and control points. However, in line with the expansion capacity, we maintained in all four ships, the systems have a 25% growth margin. The future modifications in the platforms and the systems to be added can be integrated into EPKIS within this margin.

Defence Turkey: In the I-Class Frigate Project, you take part as the EPKIS provider under STM (the sub-contractor). Did the delivery of the EPKIS for TCG Istanbul -the Project's first ship- take place? What are the differences between the EPKIS manufactured for the I-Class and the EPKIS delivered for MILGEM 3 and 4? For instance, can you inform us about the number of control and monitoring points?

Bülent HAMZAOĞLU: We completed the critical design review process regarding I-Class EPKIS in 2021 and accomplished the production and delivery of all equipment used similarly in the ADA Classes. The Damage Control Panels and Bridge Console designs that needed to be updated were completed, and the production stage was initiated. We will complete the delivery of all equipment in the first half of 2022.

The I-Class project is quite different from the ADA Class. Initially, in parallel with the technological developments achieved in this project, we will use the newest 9th and 10th generation processors with the highest performance. There will be 25% more control and monitoring points in this project compared to the ADA Classes. Briefly, we will provide a control and monitoring capability that can be extended to 9,000 points (7,500 of which will be active). We completed the indigenization of our Shipboard Training System module, which we provided previously with a foreign license.  We will provide this module indigenously to our I-Class Frigate and Offshore Patrol Boat projects, and our local content rate will increase further.

Defence Turkey: Can you inform us about the five work packages you assumed under the contracts signed with ASFAT, HAVELSAN, and METEKSAN DEFENCE within the PN MILGEM BABUR Class Corvette Project? Can you detail your activities regarding BABUR Class Corvettes? For instance, as far as we know, there are a total of 11 consoles comprising of 9 MOC+ EH/ESM and Sonar Consoles in the ADA Class, whereas the number of BABUR Class consoles is 13. Is the difference due to the number of weapons/sensor equipment in the vessel? Similarly, are there any differences in terms of EPKIS System capability?

Bülent HAMZAOĞLU:  Let's initially give information on the Combat Management Systems. Regarding the BABUR Class Corvettes, we are providing 9 consoles within the scope of our contract with HAVELSAN and a Sonar console in line with our contract with METEKSAN. Our negotiations with ASELSAN regarding the EW Console are in progress. I think two other consoles are related to other systems to be provided as DEMAM. The production of the Ship 1 and 2 sets we provide for HAVELSAN are in the completion stage, and we will deliver these units in 2022 Q1. We delivered the Ground-Based Test System components of the equipment we developed for METEKSAN. We will deliver the Ship Sets 1 and 2 in the first quarter. The environmental condition tests of the 32U "extremely rugged" cabinets developed for the first time as part of this project will be completed in the first half of 2022.

The EPKIS solution of the BABUR Class Corvettes is similar to the solutions supplied for the ADA and I Classes, and they are being updated in accordance with the requirements and rules of the Pakistan Navy (PN). All ship sensors, navigation lights and navigation light control panels, tank measurement systems, and various control consoles and desks are included in YALTES' work share. The first group of materials for the 1st and 3rd Vessel were delivered in 2021. The following material groups will be delivered in the first half of 2022.

Defence Turkey: As YALTES, have you assumed any work packages in terms of the CMS equipment or the EPKIS as part of the Ukraine MILGEM Project where the official contract for one ship was initially signed? What are your comments on this subject?

Bülent HAMZAOĞLU: EPKIS of the Ukraine’s MILGEM Project will be provided by our company. Since the vessel is a variant of ADA Class, I can say that our work share will be similar to the system we provided as part of TCG Kınalıada. As the ship's transfer to Ukraine is intended to take place at the end of 2022, we plan to deliver all equipment in 2022 with immediate production. We are taking the necessary measures to continue the integration and launch activities in Ukraine.

Defence Turkey: TCG Oruçreis to be modernized within the scope of the BARBAROS Mid-Life Modernization (MLU) Project was planned to be docked in October 2021. However, due to Naval Forces Command's operational requirements, a decision was made to dock the ship at the Gölcük Shipyard Command in December 2021 for modernization. Did the activities for the ship start? Can you inform us about the work packages that YALTES assumed in this Project?

Bülent HAMZAOĞLU: The project activities for the ship have not started yet, but the Factory Acceptance and Hardware/Software joint factory acceptance activities of all the equipment of this vessel were accomplished at the Test Centers located at YALTES and ARMERKOM. We are ready to work over the vessel and will continue our activities in accordance with the plans of our Naval Forces Command. The production of the equipment of the Project's second ship and the preliminary Factory Acceptance Tests (Dry run) jointly with HAVELSAN were completed. We will conduct the Factory Acceptance Tests in January with the participation of the Naval Forces Command. If there are no changes in the plans, we will deliver the equipment of the 3rd vessel in 2022 Q4, following the Factory Acceptance process.

Within this scope, all CIC equipment components, video, and data networks are supplied by YALTES. 

Defence Turkey: At the same time, you accomplished the delivery of the extensive Combat Management System equipment and the sub-systems for the LHD Anadolu – the first project where the New Generation Operator Consoles were used. HAVELSAN was the sub-contractor in the project. Can you give details on your activities regarding LHD Anadolu? What feedback have you received about your products installed on the vessel during the tests?

Bülent HAMZAOĞLU: The installation and cold loop checks of all our products have been completed as part of the LHD project. Following the power-up of the ship, we will start the activation and Harbor Acceptance Tests (HAT) process. The feedback can be assessed better after all products are activated. 

Defence Turkey: In the first stage, helicopter platforms of various types and tonnages will perform on LHD Anadolu, but in time the fixed and rotary wing UCAVs/UAVs will be deployed on the ship. During LHD Anadolu's transformation into a UCAV vessel, a series of modifications to the ship's existing equipment will be required. In this process, will there be a need to update the equipment and sub-systems provided by YALTES? Has there been a request for this?

Bülent HAMZAOĞLU: There has been no request for any updates on the UCAV integration at this stage, but I can say that the updates would be easily implemented thanks to the flexible structures of our products.

Defence Turkey: As YALTES, have you assumed any work packages in the HISAR Class Offshore Patrol Boat Project covering TCG Akhisar and TCG Karahisar boats that are constructed by ASFAT as the main contractor in the first stage and will be delivered in 2024 to fulfill the increasing operational requirements of the Turkish Naval Forces Command?

Bülent HAMZAOĞLU: We are the EPKIS contractors of the HISAR Class two vessels, and we will be providing our PIKET3000 product, which is similar to ADA Class configuration.

Defence Turkey: Getting involved in the underwater domain and starting the delivery of the submarine systems with the MUREN AY Project, YALTES assumed a critical work package as part of the MUREN PREVEZE Project. The sea acceptance tests of the project's first vessel, TCG Preveze, are planned to be conducted, and the vessel is expected to be launched to service at the beginning of 2022. Can you inform us about the equipment you delivered for the first ship? Can you update us on the scheduled delivery dates for the equipment of the other three ships? Is YALTES involved in the PREVEZE MLU Project?

Bülent HAMZAOĞLU: In 2021, we successfully conducted the MUREN PREVEZE Project activities for the Underwater Combat Management System and sub-systems equipment, which is a critical breaking point in YALTES' 20-year history in the defense industry. Firstly, the five different types of equipment we developed successfully passed all the environmental condition tests according to the underwater platform requirements and the electromagnetic compatibility tests in the first run. Then the Hardware/Software integrated acceptance tests with the MUREN Software provided by TUBITAK were accomplished in the test environment located in ARMERKOM. All products were transferred to the submarine via restricted access means, and the installations were completed. Even though it was not included in our work package, we continued to provide support to TUBITAK and Gölcük Shipyard Command throughout all installation activities. Port Acceptance of the project was completed in the last months of 2021. Following the Navigation Acceptance and firing tests that will take place, TCG PREVEZE will be available for its naval tasks in a more strengthened way with enhanced capabilities.

This project has been critical for our company as, for the first time, we provided a solution that was designed from scratch indigenously and implemented the requests of all stakeholders, including the end-users, during the design stage. In this way, YALTES proved to all stakeholders its capacity for the Combat Management System equipment of MILDEN.

In 2022, with our R&D Project, we will adapt our PIKET3000 EPKIS solution, which is a proven solution for surface vessels to submarines, and we aim to be ready regarding EPKIS for MILDEN with a structure based on the equipment we designed for MUREN PREVEZE.

Defence Turkey: Previously, at the beginning of 2020, YALTES modernized TCG KILIÇ of the KILIÇ Class Torpedo Boats with the PIKET 3000 EPKIS System. What feedback have you received from the users so far? Is the integration of the PIKET 3000 System to other KILIÇ Class torpedo boats on the agenda?

Bülent HAMZAOĞLU: To date, we received quite positive feedback from the end-users and from the Istanbul Shipyard Command that is responsible for the repair of these boats. First, we eliminated the problem of outdatedness with the new generation products we used. We achieved a logistical advantage as in many new platforms, and we used the same products with the EPKIS equipment. We rendered the operation of the vessel much easier and more reliable with the added and updated functions. We are looking forward to implementing the same modernization in the following platforms.

Defence Turkey: YALTES has the capacity to manufacture 250 Consoles and Cabinets annually. Can you briefly mention the distinctive features of your consoles and the characteristics that make your products different than similar ones on the market? Which type of cooling system is preferred in your products? Do you use aluminum or composite as a material?

Bülent HAMZAOĞLU:  Let me start by talking about YALTES' main activity area. Since 2002, we have been producing the equipment and software at military standards to be used in naval platforms, and we have integration capability at all levels. Contrary to many other companies with similar activities in the sector, YALTES chose this area and specialized in it. In short, we are doing what we know best. Unfortunately, many sector companies that started to run activities and assumed projects in various areas face difficulties when they try to provide high-quality solutions as they have less specialization. Our main group, the Thales Group, positioned us in the way we can achieve specialization, and we have been active as a center of excellence since 2002. Our competence is the cause of our success as we achieve to provide products to the British Royal Navy and to the German Navy in the most prestigious projects. Our products are now being successfully used in 29 countries and they are a source of pride for us as they demonstrate the level of our competence.

Our most distinctive characteristic is our engineering power which uses advanced engineering tools, and that is highly specialized in this area. We have been making a considerable number of investments and procuring the most competent engineering tools, and we observe that the designs we make are carrying us to achievements immediately. 

Another specialty of our company is our utilization of state-of-the-art technology in all our products. We make our selections from the western world's most renowned brands and strive to keep away from Far Eastern products. Many companies in our sector lean towards Far Eastern products due to competition. However, these products that are acceptable in the short run become a burden to the end-user due to the problems arising in the middle and long run. At this point, I would like to remind you of a proverb I am quite fond of:

 

We can use both water cooling and air cooling in our products. Both systems have advantages and disadvantages, but as I mentioned before, we can provide the most optimal solutions with the analysis (CFD Analysis) conducted with the state-of-the-art engineering tools that we use. This is reflected as the choice of the customer instead of our preference; our task is to provide the optimum solution. 

In general, we use the aluminum mechanical structure in our products. As you know, aluminum is affected less from corrosion, and it weighs less. At the same time, it provides a more effective solution through electromagnetic compatibility. We had activities regarding composite, and there are competent domestic suppliers in this area. 

Defence Turkey: The utilization of a network-enabled CMS has raised the important issue of cyber security in new ship-building projects. In this context, the TEMPEST feature in the operator consoles used in the CMS is becoming a standard in terms of cyber security. What are your comments on YALTES' cyber security activities regarding combat ships and the solutions you will be providing in the upcoming period?

Bülent HAMZAOĞLU: The products we delivered for MILGEM 3-4, LHD, and BARBAROS MLU are entirely developed with our resources, and they have the TEMPEST feature. Similarly, all our equipment manufactured for Thales has been designed in accordance with the TEMPEST requirement. All the products we produced for the German Navy are being tested on an LRU basis, one by one, at the German Navy's test center (WTD 71) in Kiel before their installation is approved. I can proudly say that we are among Turkey's most competent defense industry companies in this area.

In cyber security, we have been conducting our activities for our Combat Management System equipment and our EPKIS solutions with the support of the Thales Group - one of the world's most competent companies in this area, though it is not a direct requirement. Then again, I believe this issue should be guided by the Presidency of Defense Industries so that this issue could become a requirement for all the systems through the utilization of the solutions provided by our domestic companies.

Defence Turkey: Regarding the Operator Consoles, you participated in HISAR and HERIKSS Projects and accomplished deliveries. Do you have a work package for operator consoles or cabinets in the SIPER National Long-Range Air Defense Missile System Project, the first firing test of which was conducted on November 5, 2021?

Bülent HAMZAOĞLU:  As ASELSAN's sub-contractor, we have manufactured and delivered over 70 consoles to the HISAR and HERIKKS Projects so far. We continue to provide field support to these products across the country. We expect to be involved in the SIPER Project with the expertise we accumulated in HISAR and HERIKKS projects. 

ASELSAN is the flagship of our defense industry, and we are proud to take part in this ship up till today.

Defence Turkey: Would you like to add any additional points or convey any message to our readers as we conclude our interview?

Bülent HAMZAOĞLU: Thank you for this interview and your time. 2022 is the 20th year of YALTES' establishment.  We relish in the fact that we have over twenty years of experience as a supplier for the relatively young Turkish Defense Industry, it is a source of pride for us. In this context, we will celebrate our anniversary, which is quite significant for us with various activities throughout the year, and we will set new targets to achieve many other twenty years. I want to conclude my words by requesting that our readers keep following our company