SSM’s Industrialization Department Priorities: Industrial Depth, Technological Competence and Export & Logistics Support
Defence Turkey: Mr. Aktaş, first of all we would like to thank you for your time for this interview. As known, Turkey has taken significant steps during the last decade. Could you please make an evaluation for us on where we stand now and our capabilities so far?
SSM is integrative, constructive and innovative for the design of national Defence industry. For this pupose, it commits to provide best solutions by bringing the forces of stakeholders together. For the sustainability of the sector’s acquisitions, it promotes exportation; gives priority to develop cooperation with friendly and allied countries. 2012-2016 Strategic Plan is part of a holistic approach and determines the objectives within the framework of the vision and strategic objectives. Within the scope of vision to make Turkey superior in terms of defence and security technologies, below are the outstanding topics related with the defence industry:
Program Management Maturity
Industry Sustainability
Technological Competence
Within the scope of this plan, the Undersecretariat for Defence Industries shall focus on studies to provide sectorial depth and lead SMEs and sub-industry companies in order to develop their project management as well as technological capabilities. As you know, the implementation of offset projects has been carried out for many years by the Undersecretariat for Defence Industries. Finally, with the IP/O Directive published in 2011, companies are required to commit 70% Industrial Participation/Offset in the contracts to be signed within the scope of Defence industry projects. In the proposals to be given in this respect, the participation of local industry as well as sub-industry and SME contribution for the sectorial depth shall be encouraged.
Defence Turkey: Could you please inform us about your missions as the Department of Industrialization in accordance with the Strategic Plan?
With the arrangements made in 2011, three Directorates were established under the Industrialization Department namely Aviation and Aerospace, Mechanical Engineering and Naval Architecture, Electronic and Software and they were assigned for the strategic management of the sectors, which are under the responsibilities of sector managers as well as for the follow-up of IP/O activities. Two main tasks of the Industrialization Department are “Industrial Participation/Offset Management” and “Sector Strategic Management”.
Through its first main task, the Industrialization Department provides coordination of industrial participation/offset activities performed within the scope of projects, establishment of new policies by taking into account the developments in this regard, monitoring of signed IP/O contracts, preparation of parts related with IP/O arrangements to be included in RFPs and contracts as well as the the award and execution of the contracts.
The tasks of the Department of Industrialization under “Sector Strategic Management” topic are as follows:
To coordinate and monitor sector strategies,
To organize symposiums, workshops and meetings in defence industry field to provide cooperation and work-share between sub-industry companies and industrial organizations,
To ensure maximum utilization of local industry capabilities in SSM projects, to provide information, orientation and support to local companies in this context and to provide necessary coordination between sub-industry and SMEs,
To provide coordination with organizations such as SASAD, TOBB, KOSGEB and etc. for local defence industry activities,
To ensure that relevant studies are made to prepare Defence Industry Inventory promoting the capabilities of companies and establish defence industry product catalogue in this respect.
In addition to these tasks, the Department of Industrialization provides the execution of operations regarding loan agreements and transfer of funds protocols to be signed with local companies for purposes of support in coordination with Finance and Administration Department and fulfilment of tax and duty exemption certificate requests of the companies performing projects that are of vital importance for SSM and defence industry.
Defence Turkey: Could you please tell us how the Industrial Participation/Offset Management is functioning?
With the Industrial Participation /Offset Management, it is aimed to contribute to the balance of international payments by establishing import/export balance in product/service supply, to maintain and develop domestic industry and to provide top-down spread of technology. The Industrial Participation shows the contribution of domestic companies to the project whereas Offset shows the return of expenditures on national economy by allocating work share to local industry for foreign public acquisitions and investments, exporting product or service, technology acquisition and making investment. The IP/O liabilities required for projects conducted by SSM through 2011 IP/O Directive are divided into three categories:
Through 2011 IP/O Directive, the IP/O liability rate required for projects conducted by SSM was increased to 70% of the contract price. With the “Industrial Participation / Offset Evaluation Formula” amended in 2009, the importance given to SMEs was increased. Within this context, through 2011 IP/O Directive, at least 30% of Category-A (Industrial Participation) IP/O liability is stipulated to be as Sub-Industry/SME Work Share and at least 15% is to be as SME share. For crediting IP/O activities under Category-A, the coefficient regarding design and engineering work performed by SMEs is determined as 2.
In addition to this, the portions in the exported products / services performed by SMEs are credited by increasing the multiplier of the corresponding product / service in the Table of IP/O Multipliers by 1 (one).
Defence Turkey: Could you
