Defence Turkey: Firstly, Dr. Faik Eken, thank you for the time you’ve set aside for us. Looking back at 2014, we see that Aselsan had an efficient year. Can you briefly evaluate 2014 and the first half of 2015 for us?
Aselsan, in the last ten years, consecutively, has increased its sales and achieved a steady increase over the previous year. The same trend continued in 2014, our sales increased by 10% compared to the previous year.
We’ve observed that our share of export sales, in particular, have increased in recent years. The export ratio exceeded 20% of total sales. In previous years, exports were around 10% but in the last three years exports have increased to over 20%. However this is not enough, we need to increase these figures even more.
While in 2014 Aselsan was ranked 67th in the Defence News Top 100 list, it has now moved up the list to 62nd in 2015. In the coming years, we intend to continuously raise our position among the world’s leading defence industry companies.
Several positive developments for our company occurred in 2015. In the first six months, we signed new contracts amounting to a record breaking $1 billion USD.
Defence Turkey: According to 2014 data, Aselsan ranked 62nd in the top 100 of the world’s largest defence companies. It has increased its ranking by 5 steps compared to the previous year. 2014 had a growth rate of 10% compared to the previous year, with $1.109 billion USD turnover in defence, and we see you’re doing $1,142.5 billion in total revenue. What is your targeted growth rate for the year-end 2015 budget?
Aselsan will focus on increasing sales while maintaining sustainable growth. In order to do this, resources will be dedicated to research & development activities, knowledge and technology accumulation; carrying out innovative activities, supported by information and predictions based on business strategy and market development activities. By carrying out these appropriate planning and execution activities, Aselsan will maintain constant growth. As for our sales in 2015, we expect a similar growth as in 2014.
Defence Turkey: What are your investment plans in the areas outside the defence and security field, such as: rail road, electric vehicles, civil avionics, telecommunications, mobile communications, automation systems and so forth? In addition, a large part of your total turnover is comprised of sales made in, or related to, the field of defence and security. In the coming years, what type of road map do you have for creating a balance and increasing the share of these types of investments in other sectors?
One of Aselsan’s strategic objectives is to be also active in sectors other than defence. In this regard, we have made organizational changes so that the knowledge and experience gained in military products can be utilized in the non-defence sector as well, thus the UGES Business Sector was created (Transport, Security, Energy and the Automation Systems). Besides security and automation areas which Aselsan has been involved since establishment; energy, transportation and health related projects will be handled by 4 business divisions within UGES.
Upon this decided path, we have chosen to enter the market by developing original products. For this purpose, we established our fifth R & D Center. Following approval from the Ministry of Science, Industry and Technology, field activities began, becoming our fifth R&D center. The UGES R&D Center is based on advanced technology in the field of products, services, design and development in the fields of transportation, security, energy and automation and healthcare technologies.
As always, with R&D-based development and investment, we anticipate to reach significant progress in areas other than defence. We will proceed on this path with patience and determination.
Defence Turkey: According to data from 2014, exports will constitute what percent of your total revenue? In connection with this, you stated that you are aiming to bring the export ratio levels to 20% or even 30% in the next five years. Recently, considering global defence budget cuts and global conjecture, what type of path is necessary to reach your sales goals?
Aselsan domestic sales during the years 2012-2014 were $634 million, $746 million and $815 million respectively. In the last three-year period, the average rate of overseas sales was 21% of total sales. Exports in 2012 were - $175 million, in 2013 - $214 million and in 2014 we achieved $212 million in export revenues.
Aselsan’s export strategy is not only product sales but also co-production and co-development by creating technological partnerships in target countries. As a result of this strategy, we are now performing local production in six different countries. We have successful partnerships in important friendly countries. Our willingness and ability to share technology and collaboration sets us apart from our competitors.
Defence Turkey: We see that Aselsan is highly effective in the Middle East and South American markets, especially in markets outside the Central Asian region. Mr. Eken, how do you assess Aselsan’s presence in Europe, Africa, and South Africa and what is the current market position of Aselsan within the NATO market?
Marketing efforts within NATO countries, Europe and in the South American have been accelerated. Recently, we signed a contract in Croatia. In addition, we are a strong candidate in major defence projects in Poland.
In addition, we are working to increase our activities in South America. In Uruguay, we exported the Border Security Systems and the Mobile Radio Systems. We also signed a contract for the first time in Chile, which we are following, as well as other projects. Likewise, we see potential in South Africa as well as neighboring countries. In that region, we have a branch specialized in electro-optical design. Our local branch’s goal is to take part in a number of projects in South Africa as well as in neighboring countries.
Defence Turkey: Aselsan participates in co-production, joint development strategy with Jordan, United Arab Emirates, Kazakhstan and Azerbaijan. There are local companies operating in these countries; we see that this growth strategy is specific for Aselsan in the Middle East and Central Asian markets. For the business sectors of your company operating in those regions, what you like to say about the related programs?
Through joint production we have established the most advanced production facilities in our subsidiaries. We trained local staff who are working in these facilities and we provide technical support to all activities. We also provide support to the local industry in the region with partner companies. This is a result of our international strategy and it is making a difference. In the aforementioned regions, we are assessing the need to continue to grow; we have long-term activities planned in this regard.
Aselsan Baku, The Company located in Azerbaijan is 100% owned by Aselsan and it was established in 1998 to carry out the publicity / marketing and sales activities of military and civilian communication devices. Currently, they perform our product sales and after-sales services.
Kazakhstan Aselsan Engineering LLP(KAE), The Company was established in Kazakhstan in 2011 to carry out the manufacturing, development and maintenance-repair of electronic devices and systems to meet military and civilian needs in a partnership between Aselsan 49%, the Undersecretariat for Defence Industries (UDI) 1% and Kazakhstan Engineering 50%. The facilities began activities related to electro-optic manufacturing and has since expanded to various projects being carried out today. We have expanded our activities in Kazakhstan by signing an agreement on the most recent stabilized weapon systems.
Aselsan Middle East Private Shareholding Company Limited, The Company KIG was established, as a joint venture company founded in 2012 to meet the night vision needs of the Jordanian Military Force with the KADDB Investment Group (KIG) holding a 51% stake in the Company and Aselsan holding 49% of the shares. The company, with our recent agreements, has started production under the license of Aselsan Radio.
IGG Aselsan Integrated Systems was established with the aim of manufacturing, testing, and integrating Aselsan’s products in the UAE and selling and providing after-sales technical support in Gulf countries and the UAE. In 2011 in a partnership between Aselsan 49% and IGG 51% was established. It is currently performing the after-sales service of our stabilized weapon systems used in the UAE.
Aselsan Electronics Industry and Commerce Inc External Company Profit (Pretoria - South Africa) This Company is the branch we established in 2011 to operate in the fields of design of optical systems and introduction and marketing of Aselsan’s products in South Africa.
Defence Turkey: There are recent developments related to a radio factory that is due to be operational in the near term in Saudi Arabia; can we learn more about this from you?
Saudi Arabia is an important country for Aselsan. We are very pleased to take responsibility in a project which comprises the instrumentation of a plant that will provide local production.
Our activities in Saudi Arabia began with joint R&D activities on radios. A Saudi waveforms was developed together with Saudi engineers which will run in our Software Defined Radios. Executed field tests demonstrated very successful results. Now Saudi engineers are developing new waveforms. With their own secure software design, our radios have became a reliable communication solution for the Saudi Armed Forces.
The construction of the facility that will locally produce our radios has been completed. The production line installation continues, we aim for completion by the end of this year. Our basic strategy in Saudi Arabia was based on localizing our products through development of technology, by agreements with local partners and government agencies. Now, we aim to achieve a partnership in the field of Electronic Warfare and Radar using the same approach.
Defence Turkey: Mr. Eken, Aselsan is making significant investments domestically. After the facilities in Macunköy and Akyurt became operational, also activities began on the Gölbasi Radar and Electronic Warfare Center, then the REHIS sector (Radar and Electronic Warfare Systems Business) was moved to this campus. At the opening of this facility in particular you expressed your great expectations for this facility. For the year 2015, you stated that sales would reach $300 million for the REHIS sector. How do you view the current performance of the Aselsan Radar and Electronic Warfare center? This facility will surge Turkey forward into the future, in the league of defence, reaching new heights. Which areas will play a leading role in the program? Can we have your assessment?
Our Gölbaşı campus is located on a plot of 350 acres with an area of 75000 square meters of indoor area and test rigs. Total investment is around $157 million, $70 million for construction and $87 million for the establishment of the various equipment and sub-structures within the facility. I would like to mention that we have achieved an enlarged and advanced radar, electronic warfare, microwave module design, production and test infrastructure. With a clean room is area of 2000m2, with LTCC and Thin Film infrastructure, we now own one of the few plants in the world, capable of producing 10s of thousands of microwave power modules yearly.
Aselsan Gölbaşı Campus Radar and Electronic Warfare Technology Center comprises full design, production, test and logistics capability for military and civilian radar and electronic warfare systems, and hardware / software components for such systems. Currently, our REHIS business sector, with more than $1 billion worth of orders, executes very important projects in this facility, such as: HEWS, Land SOJ, ÇAFRAD, and “Kalkan”. In the coming period we intend to execute projects related to Nose Radar and Electronic Warfare and Self Protection Systems for MMU (T-FX Indigenous Fighter Jet Aircraft) as well as Air SOJ, Long Range Surveillance Radar and AKKOR in this facility.
Defence Turkey: Considering the achieved infrastructure and opportunities, they constitute the most important part of the long-range air defence systems for Turkey and for the development of the national search and fire control radar; can we say that this is on the forefront?
Absolutely yes. Long Range Air and Missile Defence Systems is one of the most critical components of long-range search and fire control radar. We are capable of developing these radars with our infrastructure and accumulated experience. We are capable of domestic production of modules used in the radar, as well as gallium nitrate transistors used in these modules. We can indigenously design and manufacture a radar from A to Z.
The implementation of this capability was demonstrated with the “Hisar” and “Korkut” projects. Aselsan has designed and produced the search and fire control radar in these projects. On-going field tests yielded very good results.
Defence Turkey: Subsystem development and testing activities are on going for “Hisar-A” and “Hisar-O”; can you inform us of the latest status of the programs?
Aselsan has a 25-years history in the area of air defence. The development of the original Pedestal Mounted Stinger (PMS) was a milestone for both Aselsan and the Turkish Defence Industry. Besides PMS, HERİKKS Air Defence Command and Control System and “Kalkan” Air Defence Radar were developed domestically and deployed for the use of the Turkish Armed Forces.
Today, Aselsan is a technology centre, capable of providing the users with all the elements of integrated air defence comprising of weapon systems, sensors and command and control systems. With the accumulated knowhow, Aselsan is now indigenously developing together with Roketsan, Hisar Low / Medium Altitude Air Defence Missile System; which encompasses various system architectural components like radar, fire control / command control and electro-optic systems.
As the most critical component, on missiles we are working with Roketsan in “Hisar” project. Our other partners in this project are; TUBITAK SAGE for the warhead, FNSS for supplying armoured tracked vehicles, Koluman for supplying tactical wheeled vehicles and Milsoft for the Link-16 software development. At the IDEF exhibition, target detection / monitoring and interception functions of the Autonomous System and Fire Control units were exhibited for the first time. In addition, the Missile Launch System also attracted attention at the MSPO show held in Poland in September.
“Hisar-A” subsystem tests were carried out successfully in the past period, and missile firing control tests were carried out using dual pulse solid propellant motor. The “Hisar” project laid a great foundation in the field of air defence projects. Acquired infrastructural capability and technological knowhow demonstrate that, air defence solutions such as Air Warfare Frigate TF-2000 and Long Range Air and Missile Defence System, can be developed and manufactured locally.
Defence Turkey: Mr. Eken, when will system development and production occur in the ÇAFRAD Phase-1 project? Also, SSM has recently published a call for proposal document for Airborne Early Warning Radar systems. What would you say about the preparations made regarding this program?
ÇAFRAD (Multi Function Radar) is planned to be the main sensor of TF-2000 air defence warfare frigate program. Our technology development studies in Phase-1 are continuing. The critical design phase of the project will be completed in November 2015 after which system development and production stages of Phase-1 will start. Within this project, the X-band multi-function search-and-track and semi-active radar-guided scaled radar prototype and non-rotational type IFF antenna are being developed.
Long Range Early Warning Radars project proposal evaluation has been completed; soon the project expected to be started by the signing of the contract. Concurrently, system design and test activities are being carried out for critical system components, as part of our risk reduction activities.
Defence Turkey: For the first time in Turkey, you have produced the first commercial nano-transistors and will make electronic integrated circuits which will provide a significant capability for Turkey. AB-MikroNano was established in a partnership between Aselsan and Bilkent University at the end of 2014 and with a groundbreaking ceremony in the same period. With the introduction of this facility, in which areas will Turkey accelerate and leap forward? What are the advantages and capabilities that Aselsan will bring long-term to Turkey’s economy?
Aselsan in partnership with Bilkent University established Turkey’s first semiconductor company, Bilkent Micro Nano Technology Industry. ve Tic. Inc. (AB Mikro-Nano), which produces commercial chips and electronic integrated circuits.
This is Turkey’s first commercial plant for producing semiconductor gallium nitrate-based chips, expecting production of 30 thousand per year. Gallium nitride technology, compared to other power semiconductor technology, stands out with its superior characteristics in the high power density and efficiency.
With this technology, Turkey will significantly leap forward as a country on strategic subjects such as, radars, electronic warfare, power electronics and 4G / 5G mobile phone systems and will become one of the 4 countries in the world, possessing gallium nitride technology.
Defence Turkey: Mr. Eken, at IDEF you exhibited the Helicopter Electronic Warfare Self Protection System. Recently you’ve completed the testing and qualification system. When are you planning to integrate the helicopter system into the inventory of the Turkish Armed Forces? Will this system also be involved in conjunction with the General Purpose and the “Atak” helicopters?
Aselsan Helicopter Electronic Warfare Self Protection System (HEWS) comprises systems of detecting and warning radar, infrared and laser guided missile threats. The RF Jammer and Laser Warning Receiver together with the Chaff/Flare Dispensing System and Missile Warning System provide an effective and threat-specific countermeasure resulting from the fusion and assessment of the data received from the sub-components. We designed the systems and sub-components, including antennas. This system is already in the inventory of the Turkish Armed Forces (TAF), and being deployed to the TAF helicopters under a modernisation program. We will also employ the Electronic Warfare Self Protection system in the “Atak” and General Utility helicopter programs.
Defence Turkey: At IDEF, you showcased the “Tork” Torpedo system and 35 mm threaded essential products such as air defence ammunition. Can you inform us about any development and testing activities on these products?
The most effective defence against the threat of torpedoes for submarines and surface vessels is accomplishment of combined use of the Soft-Kill (Functional Destruction) and Hard - to - Kill (physical destruction) methods. “Tork” has the capability to destruct acoustic-guided, wire-guided, unguided and slipstream-guided torpedoes that are aimed at surface vessels. “Tork” counters torpedo threats that are approaching platforms by precisely measuring distance and direction. When it reaches the destruction distance, it detonates and deactivates the threat.
Nowadays, there is an increasing number of cruise missiles, air-to-surface missiles, unmanned aerial vehicles, and so on and as such, a need has arisen to use the new generation of Intelligent Munitions, increasing the efficiency levels of barrelled weapon systems against air threats.
The concept of air burst ammunition came up in order to increase the efficiency of the gun systems against air-to-surface missiles, UAV’s, etc. The idea is basically to create a cloud of particles which have high kinetic energy and penetration capability on the path of the threat and be able to hit targets which are very difficult to hit with classical ammunitions.
Unlike conventional ammunition types; Aselsan, as the prime contractor in the development of 35 mm Airburst Ammunition, by adding smart sub-components into a 35 mm, provides an effective technological solution against fast and small targets. The Airburst Ammunition development project enables us to expand our electronic design capabilities and internal ammunition applications. With our own design and testing infrastructure it allows us to advance forward to a new point in this regard.
The enhanced 35mm Smart Munition can be used effectively by the “Korkut” 35 mm Self Propelled Air Defence Gun System and other Self Propelled Air Defence Gun Systems modernized by Aselsan. In September, artillery tests were completed and the targeted aircraft was successfully shot down with the use of 35 mm Airburst Ammunition in the Self Propelled Air Defence Gun and this was an important proof of competence in this area.
Defence Turkey: In the 2020s, within the context of Turkish and world military needs, what type of vision has Aselsan identified for itself and where will it position itself?
Currently combined symmetric and asymmetric threats are being encountered. Advanced technologies particularly electronic technologies emerge as important force multipliers for encountering such threats.
Aselsan primary responsibility is to meet the operational needs of the Turkish Armed Forces independently. Aselsan aims to develop all the sensors, command/control systems processing information received through such sensors and also the communication means between such sensors and command systems, and moreover to add smarter capabilities to the existing systems and platforms of the Turkish Armed Forces.
Defence Turkey: What technologies will stir excitement in Turkey in the near future? For example, robot soldiers or clothes, battery technologies, unmanned vehicles (drones, robots driving, etc.) artificial intelligence...
In the future, widespread use of unmanned military systems is expected. Especially unmanned reconnaissance vehicles, thus the effect of surveillance and intervention areas is increasing. However, we believe in the value of integrated warfare centric solution.
It is important to develop integrated, fast, reliable and easy-to-use warfare products, from sensors to decision-making mechanisms, complemented by electronically controlled unmanned interception elements.
Recognizing the importance of the development of artificial intelligence for robots, Aselsan began to work in this area about 10 years ago. In this area, with domestic and international universities, we began developing technology for these products. In 2010, we participated in the MAGIC 2010 competition with five universities, by which we demonstrated that we have a voice in the world related to the area of artificial intelligence.
In 2012 the United States held the “Robotics Rodeo” event, which attention to the artificial intelligence, where we demonstrated our “Kaplan” surveillance robot. At the exhibition, we demonstrated our robot’s functionality as it automatically detected unauthorized intrusions into a specific area. Our’s was the only military robot which was exhibited to VIP guests. Today “Kaplan” Bomb Disposal Robots are widely used by our security forces.
In the last two years we have had the opportunity to integrate our products to out-of-service navy ships in order to use them as remotely controlled targets for testing of guided missiles and mines detonation.
Yet we continue to do the experiments that can only be carried out in a few countries around the world. For the first time, ARI, (rotor UAV) has successfully demonstrated that it can complete tasks such as: taking-off and landing onto a moving ship, as well as the ability to track a moving ship. By the end of this year we will achieve a significant step toward developing our unmanned air and sea vehicles, capable of operation collaboratively in the same mission. Our new study uses artificial intelligence and civilian applications in the agricultural sector. We accelerated our artificial intelligence development to work in more extreme conditions. For this, we began development of systems that will make tractors operate autonomously. In this way, the acquisition of agricultural land will be much more efficient.
Defence Turkey: Finally, do you have a message that you would like to convey to the readers of Defence Turkey Magazine
Turkey’s modern defence history is almost coincides with the history of Aselsan’s establishment. The journey that we started in 1975 continues to this day and we walk strengthened. We are grateful to all our military and civilian government officials, having had confidence in us and allowed us to reach this successful stage during our 40-years journey. Today, we are the largest national defence electronics company that produces technology for the Turkish Armed Forces. Our goal is to do this for all the institutions of our country while continuing our mission in the coming years. The confidence of our national organizations and institutions will be our greatest reference in our export achievements yet to be realized.
Thank you for your contribution in helping to publicize the activities of the Turkish Defence Industry.