Turkey Aims to Reach 2 Billion USD in Defence Exports
Defence Turkey:What level of success has our defense industry achieved in respect of export when taking 2011 in figures ?How do you assess 2012 in terms of export activities in figures?
One of the strategies set forth in SSM’s "2007-2011 Strategic Plan" aims at reaching 1 billion USD of defence exports by 2011. We reached an export level of 1.1 billion USD which is higher than the target level. In our Strategic Plan for the years 2012-2016, we aim to reach 2 Billion USD of defense exports as a part of Turkey’s overall export target of 500 Billion Dollars to achieve by 2023, the year which will mark the first centennial of the Turkish Republic.
Defence Turkey: In coming period It is seen that export will be the major issue in Turkish Defence Industry policy. Within the light of this, could you please inform us your export strategy and policy to increase Turkish Defence Industry export capabilities ?
In order to be able to achieve reaching the 2 billion USD target for defence and aviation exports set forth in SSM’s previous Strategic Plan and the Undersecretariat’s Export Strategy Document, we prioritize our activities considering the requirements of our Allies along with the market conditions and our defence industry capabilities. In this respect, the enhancement and diversification of relations with friendly and allied countries are considered vital. We also encourage our companies make investments and partner with foreign companies when feasible in certain markets, and guide foreign companies to invest in Turkey and keep them up to date about our industrial participation procedures.
By looking at the defence fairs we are planning to participate in the second half of 2012 and 2013, our focus is on the Middle East, South-East Asia and South America. However, we pursue mutually beneficial dialogue through bilateral visits and holding industry days where industries and government officials come together to seek cooperation opportunities. We also encourage our companies to join industry and capability Work Groups such as NATO and ASD, and seek more efficient mechanisms for our companies to be more active in Western platforms.
We are also working on several other mechanisms such as; establishing an FMS like sales mechanism in order to offer affordable financial solutions to our potential customers who are in need of certain defence equipment and systems. We encourage our companies to invest in countries like the US, find partners and establish Joint Ventures, where necessary and the cooperation seems feasible in order to be able to expand into certain markets that are not easily accessible due to some protective rules and regulations, such as ITARs, and technology transfers.
Moreover, some legislative arrangements are planned to be made in order to streamline our international cooperation and export promotion activities of SSM. In addition, the "Directive on Incentives and Credit Support Applications for Defence Industry Exports" is due to be issued in line with our Defence Export Strategies.
Based on these concrete strategies and the internationally-focused restructuring of Turkey’s defense industry base, we believe that we are on the right track. Coupled with the solid strategies set forth in the New Strategic Plan and the establishment of the Defense Industry Exporter’s Union in 2011, we are targeting a considerable boost in the volume of defense and aviation exports.
Defence Turkey: Could you please enlighten us about the export activities and achievements taken in recent years?In this context what do you think about the export level the Turkish Defence Industry reached?
As the product portfolio of the Turkish defence industry widens, Turkey has achieved a rapid increase of defence exports especially over the last few years in the global defense market, we observe that Turkish companies are highly competitive in specific areas, such as the design and the manufacturing of armoured vehicles, shipbuilding, naval combat management systems, avionics, software-defined radios, command and control systems, simulators, military clothing, and logistics, owing to the considerable investments made. Almost all products that have been developed domestically with intellectual property rights belonging to domestic actors are met with demand at the international market.
Defence Turkey: It is obvious that Turkish Defense Industry made a fast progress in many areas brought about the industry to be competitive in different international markets. What are the present and target markets in line with your export strategies?What are your strategies in terms of joint production, investment, cooperation with local companies in these markets?
Taking into account the shrinking defence budgets especially in Europe and US, co-operation has become indispensable and vital in terms of providing best-value solutions to obtain cutting-edge technologies. The International partnership concept is now being taken more seriously than ever before, as many nations with similar requirements are eager to collaborate to create synergies. In this respect, efforts will be put forth for the improvement of State-to-State Sale applications. Meeting on exports and cooperation will be organized quarterly with the participation of marketing units of our companies.
Based on our export strategies and our strong relations, our main focus is on the Gulf region, Southeast Asia, the Caucasus, Africa, and South America. We continue to seek cooperation opportunities and encourage defense industry coordination activities in both Europe and the US, owing to the importance we attach to our strategic relationships. We hold Defense Industry Days in collaboration with other countries, most of which are developed. We believe that seeking co-development and co-marketing opportunities is important. Turkey has adopted concrete strategies to promote Turkey’s defense industries in the global marketplace, and now we are harvesting the fruits of our success. We aim to take our companies’ efforts to a further level by pushing them to be more export oriented and competitive.
On the other hand, the role undertaken by our companies in international projects and their achievements in exports constitute an important input to enable the understanding of the position of our industry on the international arena. SIPRI data indicate a regression in our country’s position among importers of defence products, but an upward trend in the ranking for exports.
Stakeholder evaluations point out the fact that the SSM’s efforts to support exports are quite satisfactory, but there is an apparent need for more structural solutions. Given that, there are ongoing studies regarding export finance and the effective coordination of export controls. As I have mentioned earlier, considering the budgetary issues that our potential customers face, there is an increasing need towards the development of an FMS-like G-2-G sales system, in addition to a Defence Export Credit and Guarantee mechanisms.
Based on our export strategy, we can divide our activities into three main topics: representation and promotion, strategic relations with our allies, and relations with international organizations. We attach great importance to the representation and advertisement of our defense companies’ capabilities, and promote them through international platforms and exhibitions. Our defense industry companies have reached a certain level of independence in specific areas.
In this frame, several focused workshops are planned to be organized in order to promote cooperation with our allies, on an annual basis, Furthermore, procurement authorities and end-users of partners and potential customers are planned to be invited.
I must also add that we are also working on facilitating the Turkish industry access to highly mature markets, such as US’, encouraging our companies to invest in certain areas, form partnerships with the US companies so as to be able to be involved in the highly protected US defence procurement cycle. We are also planning to organize Industry Days with some of our Western allies focusing on joint development, production and seeking co-marketing opportunities for the third countries.
Defence Turkey: It is known that SSM Defence Industry Cooperation offices are established in US and Saudi Arabia. How do you assess this development? Could you please inform us about these offices activities?In coming future in which countries such offices are planned to establish?
SSM’s Defence Cooperation Offices (DCOs) in Saudi Arabia, Washington DC and Brussels are actively working in order to improve concrete dialogue between the government institutions and industries. We are working on opening two new DCOs, one in South America, one in Indonesia, where there is significant potential to enhance bilateral cooperation.
Defence Turkey: Do you cooperate with the other Turkish and foreign organizations to increase Turkish export activities? Could you please inform us in details?
In order to be able to enhance government to government relations, find best-value, affordable common solutions, achieve interoperability, open up new business channels for our companies, expand into new markets and gain competitive advantage by avoiding duplications and enable better coordination, it is crucial that we work in close coordination with our Allies and continue bilateral dialogue through bilateral visits, attend internationally renowned defence industry events and conferences. We believe that being involved in international platforms such as the D8, Arab League, GCC, American-Turkish Business Council (ATC), NATO, and the Organization for Joint Armament Cooperation (OCCAR). We also encourage our companies to participate in the work-groups under multilateral settings such as ASD and France-led defence and security seminar SERA. We also closely follow current trends and new initiatives such as cyber defense, homeland security, future soldier systems as well as Smart Defence concept.
To exemplify, in 2011, the ASD Annual Conference was held in Istanbul and one week of France Ministry of Defence’s SERA Seminar was organised in Turkey.
We also actively participate in International Defence Exhibitions in addition to the national-led ones, such as Farnborough, Eurosatory, Euronaval in order to keep our good relations going with our Allies and to keep ourselves up to date about new Technologies and industry capabilities.
Defence Turkey: What are events, conferences, meetings, visits and exhibitions held and to be planned in second half of 2012 and 2013?
In our agenda for the second half of 2012, there is Sinerjitürk 2012 Conference, in which we are supporting our defence and security companies to participate. The Event aims at creating a productive forum between the Turkish entrepreneurs, academia, bureaucrats who are successful in the area of defence, security, R&D and innovation. We are also working in close coordination with the US Embassy for "Defence Trade Mission" planned to be held between 3-7 December 2012, that and we expect a good level of participation from the both sides. The Mission focuses on enhancing the bilateral dialogue both at government and industry level as well as increasing the US recognition on the Turkish defence industry capabilities.
In 2013, we aim to hold several industry events with countries we would like to enhance cooperation with. In the second half of 2013, Turkey will be hosting NATO ACT’s Annual Conference, which is one of the highly renowned events in the international defence arena.
We expect at least 20 delegations to visit Turkey from African countries to the Middle Eastern and Asian ones. In the near future, we also expect delegations from countries such as the US, Canada as well as several South American countries, namely Colombia, Uruguay and Peru.
Below are the defence exhibitions we are planning to participate in:
Defence Turkey: Could you please inform us about the current structure, activities and development plan of Technopolises in Turkey in terms of Defence capabilities? What are their contributions to economical growth and export?
Currently, there are 32 technology development regions (Technopolises) active in Turkey. Of 1800 companies operating in these regions, 104 (6%) are doing R&D on defense industry. The majority of these companies are within METUTECH Technopark which is located in Ankara and hosts 75 companies performing R&D projects related to enhancing defense capabilities. Some of the biggest Turkish defense industry companies like Aselsan, Havelsan and TAI have their R&D departments in METUTECH as well. It also hosts international companies such as Environmental Tectonics Corp. Turkey Branch (ETCT) of USA, Siemens EC of Germany. With 1400 engineers working on more than 200 R&D projects, some of them with foreign partners such as Lockheed Martin, Airbus, Boeing and Sikorsky, METUTECH sets a good example of the vast potential technopolises in Turkey have. The total export value coming from R&D projects since 2004 has amounted to 80 million US dollars.
SSM has been working on the establishment of its own `Technopark Istanbul` with an estimated 2 billion dollar investment. After fifteen years of initial development, it is estimated that around 1000 firms employing 30.000 R&D experts and qualified personnel will be contributing to the creation of a 5-7 billion dollar business volume in advanced technology field.
Defence Turkey: The Turkish Defence Industry technology made great success in both national projects and joint projects (such as JFS, A400 M) in which developed countries producing technology can be regarded as a partner in the context of "joint production" for the developing markets with its improved capabilities and products. What are your plans for participating new multinational projects?
As we have been seeing that defense budgets are shrinking in the west and increasing in the east. This trend further force the countries work together in order to share the increasing cost and make the programs more feasible. NATO’s latest concept of Smart Defense is one of the concrete example of this trend. On the other hand SSM’s strategy has always been to participate to multinational programs and if possible take the leadership for some of them. Since defense industry capability and capacity of Turkey has been improving, Turkish defense companies are more capable of bringing added value, in terms of cost and technology, to the programs. Considering all above, we attach utmost importance to multinational programs and pursue to participate.
Defence Turkey: Would you like to add a message to our readers?
I would like to thank Defence Turkey for giving us this opportunity to share our opinions and strategies about export and international cooperation activities with readers.
