Kale Group: “A Success Story”
KALE Corporation is one of the largest industrial conglomerates in Turkey with yearly sales of approximately USD 1 Billion. Established in 1957 by a major pioneering industrialist of Turkey, Dr. Ibrahim Bodur, KALE has its main business in the production of ceramic tiles, construction chemicals and mining, along with its technology and services group having several very successful technology-oriented companies in key sectors. Kale Technical Group includes Defense (Kalekalip) & Aerospace (Kale Aero), (Kale – Baykar) and (Kale Pratt & Whitney) along with its new Kale R&D companies under its roof.
Today, Kale Aero, being a direct supplier for many world-known defense and aerospace companies like Lockheed Martin, Boeing and Airbus, has been recognized as one of the leading suppliers in many important international programs, including a critical parts manufacturer for the largest defense program Joint Strike Fighter (F-35) project. On the other hand, Kale – Baykar is a successful business venture with its indigenous UAV systems having their mini UAV’s under serial production and mission tested. New tactical UAV systems have already been tested and approved by the Turkish Government. Kalekalip being the core of the defense related innovation and know–how in the Group, has many products designed and manufactured for the use of the Turkish Armed Forces, including Assault Rifles, Automatic Grenade Launchers(AGL) , Rocket Launchers and Missile parts and systems. Kale Pratt & Whitney Uçak Motor Sanayi A.Ş., is a joint venture with Pratt & Whitney, a United Technologies Corp. (NYSE: UTX) company. The partnership is operating in a new facility located in Izmir ESBAS Free Trade Zone. The product range of Kale Pratt & Whitney, will include manufacturing of F135 parts, as well as expanding its activities to support other commercial and military PWA and PWC product lines.
Initial Steps to Defense & Aerospace:
Kalekalip was established in 1969 as a moulds & dies manufacturing shop within the Kale Group to support the main ceramic tile production. Die and mold making is a precision business and, over the years, Kalekalip has accumulated the technology and know-how to manufacture precision parts and systems.
In the mid-1990’s, Kalekalip has started the production of parts for the Euro Stinger project. During the same period one of the largest defense contractors of the US, was looking for companies in Turkey to put parts orders to Turkish suppliers.
Defense and aerospace parts manufacturing is a completely new business with very high quality and delivery expectations along with stringent tolerances and a need for very special processes, tools and special equipment.
Kalekalip have decided to face the challenges and moved forward. A critical part was identified and Kalekalip decided to manufacture this part in their facility competing with the existing US supplier’s offer. A small trial order was placed for a total of USD 50.000per annum. In order to produce the said part, new investment on machinery and equipment was required. Although the planned investment was so much higher than the order placed Kalekalip management has decided to make the necessary investment by taking this risk.
The sample part was produced as planned and hasuccessfully gone through the qualification process. Subsequently a long-term co-operation with theUS Company has started with this small step. The cooperation process was successful and became a long-term mutually beneficial cooperation. This partnership has always been valued by the parties, since it brought onvaluable projects in Turkey by creating jobs, investments, technology & know-how and several other value-added programs for the benefit of the Turkish economy.
Over the years, Kale became a star supplier for the US Company and the monetary value of the cooperation has reached to several hundred million USD. Today Kale Aero is a major supplier to the US Company in the major JSF (Joint Strike Fighter) Project as the manufacturer of more than 300 highly complex parts.
Key Elements for Success:
There are certain basic but very important rules for success in such relationships. Many are obvious, but they are sometimes taken for granted. However, long term success lies in the application of these simple rules:
Understanding the needs – CUSTOMER CTQ’s
Understanding the rules and regulations
How to perceive offsets – Obligation versus Opportunity
Ensuring two-way communication
Speaking the same language
Building mutual trust
Being open sharing what can and cannot be done
Win-win
Other Global Customers and Partners of Kale
Today aside from the long-term successful cooperation with the LM, Kale is also a major supplier for many defense and aerospace companies including Boeing, Northrop Grumman, Pratt & Whitney, and Spirit Aerosystems.
The supplier buyer relationship has recently led the way to a strategic partnership with Pratt & Whitney. Thus, the new Joint Venture in Turkey is called the Kale Pratt & Whitney Uçak Motorları Sanayi A.Ş., a joint venture of KALE with Pratt & Whitney, a United Technologies Corp. (NYSE: UTX) company and a leader in the aircraft propulsion industry. The approximate investment will amount to USD 80 Million. Kale will own 51 percent and Pratt & Whitney 49 percent of the new venture company. The Joint Venture will manufacture critical aircraft engine parts mainly for the F 135 (for JSF F35 A/C). The venture is planning to employ 750 people in the next 5 years.
R&D in defense and Aviation: Kale R&D
Kale R&D is a new venture under Kale Technical Group established in 2013 to foster the design and manufacturing capabilities of defense and aerospace Turkish industry. In this respect, our first project is the design and testing of a new turbo jet engine to be used in the indigenous SOM missiles. Kale R&D has a branch Office in Teknopark Istanbul and an R&D and Test Center in Tuzla – Istanbul / Turkey.
