HAVELSAN’s “Business Eco-System Strong Cooperation and Increasing Local Content” Meeting

The “Business Eco-System Strong Cooperation and Increasing Local Content” meeting recently took place at Rixos Hotel in Ankara.  It was organized in order to increase the added value and therefore the local contribution provided by the local sub-industry companies and SMEs from sub-system level to platform level, to enable the competitiveness of sub-industry companies and SMEs and their sustainability in new target markets, to strengthen the sectorial supply chain, to develop cooperation strategies and to establish long-term cost-effective and efficient cooperation opportunities.

Minister of Science, Industry and Technology Mr. Fikri Işik, Deputy Minister Prof. Davut Kavranoğlu, KOSGEB (Small And Medium Industry Development Organization) President Mustafa Kaplan, Head of EU International Relations Department Mr. Ömer PAK, Deputy Undersecretary for Defence Industries Mr.Sedat Güldoğan, Havelsan’s Chairman Mr. Yüksel Öztekin, Havelsan General Manager Mr. Sadık Yamaç, President Of Defence And Aerospace Industry Exporters’ Association (SSI) Mr. Latif al Aliş, Secretary General of the Defence Industry Manufacturers Association (SASAD) Mr. Hüseyin Baysak, Deputy Director of the Turkish Armed Forces Foundation Mr. Atilla Gürdere and many company representatives attended the meeting.

In his speech at the meeting, Minister of Science, Industry and Technology Mr.Fikri Işık stated that Ankara moved ahead of Istanbul in R&D and innovation with the help of its defence industry city and continued, “Three concrete steps were taken in respect of the defence industry; KOSGEB and Havelsan are to establish cooperation. Moreover, we are establishing an Organized Industrial Zone Specialized in Defence Industry in Ankara. This will play an important role in order for the defence industry to gain momentum. On the other hand, an Organized Industrial Zone Specialized in Arms is being established in Kırıkkale”. 

Işık mentioned that the local content rate in the defence industry was around 24% in 2002 and this figure was considered quite low at that time and a considerable amount of effort was exerted in order to increase the rate. “We committed to manufacture our own infantry rifles, vessels, trains and aircrafts and managed to accomplish this objective partially. I hope we will manufacture our national satelite, national train, and national automobile until 2023. Currently the local content rate is around 55%, yet this rate is not sufficient. We are developing our overall industry while developing our defence industry. As you may know, many inventions and innovations are first made for military purposes and then transferred to civil industry and used. In all countries except Germany, South Korea and China, the manufacturing industry is diminishing. We will make more local and green production than them. In our opinion, the SMEs performing local production activities are the pioneers of the economy and industry. Our SMEs have to improve themselves in design, high technology and exports” added Işık.

Işık: “The Employer’s Contributions to be supported at R&D Centers until 2023”

 “Therefore we regard the public procurements as leverage. We have prepared 5 main regulations on this issue since the beginning of the year. Firstly we provided a price advantage of 15% in order to promote the procurement of local products in public procurements. Even if the local product is 15% more expensive, it will have the priority. Our second issue on the agenda is the Work Completion Certificate. If the product is a technology product, if our Ministry considers the product as a technologic product then the local product will be preferred without searching for a Work Completion Certificate. In foreign procurement tenders, 51% local content rate will have to be covered through an Offset (Industrial Cooperation Program) agreement. No taxes will be collected while the intellectual property is transformed into a value. As the fifth clause, the employer’s contribution share will be supported until 2023 at R&D Centers”. Işık also mentioned that with these new regulations the sector would be gaining momentum and added that as the Ministry they were supporting both the local and technologic production in Turkey while promoting green production as well. “While making production, we will attach importance also to human health, safety and environment. We also wish to integrate the universities with the industry. When a university solves an industrial issue, we cover 85% of it. 95% of our exports consist of defence products and we compete in the international markets with our defence products. SMEs supply 55% of our export. SMEs are regarded as the pioneers of the economy in all over the world and therefore we need to institutionalize our SMEs. We should focus on working together and hence earning together with them. I attach great significance to SMEs at this point”.

Deputy Undersecretary of Defence Industries Mr. Sedat Güldoğan made a speech at the event and stated that the defence industry was a challenging and added “Defence Industry was one of the sectors that mostly benefited from Turkey’s stability. Within the past 12 years we achieved almost four-fold growth”.

Havelsan General Manager Mr. Sadık Yamaç remarked that Havelsan participated in various national and important projects such as the National Ship, National Helicopter, National Aircraft, National Train, E-Government Project, Security Solutions, Cyber Security Centers, 3-D Modelling, etc. and added that they wish to accomplish all these projects with the solution partners in order to increase the local content and create an effective cooperation. Yamaç said that their aim was to create a strong cooperation with the solution partners with a team spirit and added when that target was achieved, they would be able to carry the Defence Industry turnover of 5,076 billion USD of and export volume of 1,5 billion USD further. “There is 50 billion USD worth IT and Telecommunication market in Turkey, but unfortunately the Turkish companies are unable to cover even 20% of this market. The world market volume open to Turkey is over 200 billion USD, we have to end the foreign dependency and uphold our national brand products. I need support to this end” said Mr. Yamaç.

In the meeting that brought SMEs and sub-industry companies together, two discussion panels took place in addition to the opening remarks. During the first discussion panel, Havelsan Business Eco-System and Procurement Process Applications, Undersecretary for Defence Industries’ Approach to Sub-Industry and SMEs, Loan Supports and KOSGEB Credit Incentive Applications for SMEs were discussed. The second discussion panel that took place, in the second part of the day, Sub-Industry/SMEs in Defence Industry Export and Cluster Activities were examined.