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Mr. Lütfi Varoğlu, Head of International Cooperation at Undersecretariat for Defence Industries, SSM informed us about Turkish Defence Industries export figures in 2012, export strategies and capabilities, Turkey-UAE relations in defence and aerospace industry, joint R&D activities with UAE and the future of UAE-Turkey export activities to the third countries for Defence Turkey Magazine.
Defence Turkey: First of all, thank you very much for this interview. What level of success has our defence industry achieved in respect of export when taking into account 2012 figures? How do you assess 2013 in terms of export activities in figures?
First of all, I would like to thank you for this opportunity. In terms of export figures, I am so glad to announce that Turkish Defence and Aerospace Industry has reached to 1.26 billion USD. As you know, the Strategic Plan that we prepared and published for the years 2012-2016 is aiming to reach 2 billion USD of defence exports at the end of the term. In this context, we can say that we are taking positive results regarding the objectives of the Strategic Plan when we consider the gradually increasing export figures of the past few years. These achievements prove that we are on the right path regarding our efforts.
So, taking into account that Turkish defence products have been attracting more customers from around the world day by day, we strongly believe that we will exceed this export amount next year. To go further, we are planning to reach a total of 25 billion dollar aviation and defence export figure by 2023, the year which will mark the Republic of Turkeys first centennial. This last figure was determined during the Exploratory Conference organised in December 2012 by Defence and Aerospace Exporters Association with the participation of government and industry representatives. So, we are quite determined to work all together to ascend in the defence exporters league.
Defence Turkey: In the coming period, it is obvious that export will be the major issue in the Turkish Defence Industry policy. In light of this, could you please inform us your export strategy and policy to increase Turkish Defence Industry export capabilities?
Along with the Strategic Plans for the periods of 2007-2011 and 2012-2016, Undersecretariat for Defence Industries (SSM) released a defence export strategy document in 2010. In this document, we have mentioned our expectations from our industry and also our government institutions. I think there were four pillars mentioned in this document.
The first issue was to see our defence industry more marketing orientated. We want them to focus on partnerships models with foreign companies as we can not talk about mere direct sales in the market nowadays. Therefore, we encourage our companies to establish joint ventures in order to further develop defence cooperation. Recently, ASELSAN, FNSS and Otokar have successfully established such partnerships with companies located in Kazakhstan, Jordan and United Arab Emirates. We do also guide foreign companies to invest in Turkey, bringing potential partners together and keeping them up to date about our industrial participation procedures and incentives.
As a second issue, the role of SSM in the export mechanism in Turkey shall be more clear and well-defined. We are trying to follow every activity related to defence export. The enhancement and diversification of relations with friendly and allied countries are vital. For that reason, we have had close connections with other related governmental institutions to follow the developments. Moreover, recently we officially opened SSM offices in three countries (USA, Saudi Arabia and Belgium) to directly coordinate our cooperation activities in those regions. We are working on opening two new Defence Cooperation Offices, one in South America, one in Far East, where we consider there is significant potential to enhance bilateral cooperation.
Following the major defence fairs all around the world, each year we are focusing on certain regions and accordingly, coordinating and organising participation of our companies in defence fairs with the concept of national participation as Turkish Pavilion. This year, starting with IDEX 2013, we are planning to organise the participation in 4 major defence exhibition in total within this concept. We are also giving great importance to IDEF 2013 that will be organized in İstanbul in May. IDEF is proved to be one of the most successful defence and security cooperation events in the region, attracting more exhibitors and visitors every two years. We are inviting all our future partners to join us in this event who share the same cooperation vision with us.
We do also continue to create mutually beneficial dialogue platforms through bilateral visits and industry days to bring industry representatives and government officials together.Every year, we are hosting more official delegations in SSM, briefing them about our industry and discussing with them cooperation possibilities. We also encourage our companies to join industry and capability Work Groups such as NATO and ASD; keeping them up to date about the cooperation possibilities and seeking more efficient mechanisms for them to bemore active in those platforms through the guidance and help of our cooperation offices. We also hold Defence Industry Days in collaboration with other countries focusing on joint development, production and seeking co-marketing opportunities for the third countries.
We do also try to utilise other cooperation channels and platforms such as the D8, Arab League, Gulf Cooperation Council, American Turkish Council. This year, for example, within the organisation of International Cooperation Platform-Bosphorus Regional Cooperation Summit-2012, a defence and security panel was organized for the first time. We had the honour to host distinguished panellists and discuss defence cooperation.
The third was the establishment of necessary organisations,marketing and financial incentives. For this reason, we have established Defence Industry Exporters Association in 2011, with full support and coordination of the Ministry of Economy. As I mentioned earlier, the Association organised the Exploratory Conference that we, defence industry representatives and related governmental officials, all came together to discuss and coordinate our efforts.
We are also working on mechanisms to offer our potential customers government to government defence sales like FMS. In addition, a credit mechanism has been established through Turkish Exim Bank in line with our defence export strategies.
Whether a Government desires to enter into purchase contracts with local defence companies, Eximbank credit mechanism can be used to facilitate meeting loan requests of Governments for the specific type of defence and security products to finance their payments. The Eximbank Loans shall be available only to finance the purchase of Defence Items approved for such financing by SSM. Upon approval of SSM local companies can utilize Eximbank credits for meeting Governments loan requests for their defence product and service purchases.
The studies for the preparation of a new law has been initiated by SSM to facilitate Government to Government sales for the defence products and services. This prospective law shall carry similar characteristics with global practices such as FMS, NSPA and DGA in defence exports. Within this law duties and responsibilities of the government institutions shall be defined. Gained incentives, exceptions and exemptions privilages in production and export of defence products by law shall be protected.
These mechanisms are vital to expand into different markets. So we are confident that with the implementation of these new mechanisms, we will enhance our cooperation possibilities regionally and globally.
As a fourth issue,the new projects of SSM should be started with more export oriented rather than pure national view. That is to say, during the process of defining the requirements for the national projects, we need to consider the products capability to be exported to the international market in medium and long term. This also underlines the necessity to work together with all the related partners in close cooperation for the same objects.
Therefore we have mentioned and we have come up with those four pillars in this document. Based on these strategies, we have have been working with government institutions and also our industry to reach our targets. And as we mentioned before, our rising export figures confirm that we are on the right track. We both have achieved to establish an industrial base that is able to meet our national requirements and been providing our foreign customers with high quality defence solutions. This gives us the motivation to keep working to guide and support our defence industry.
Defence Turkey: Could you please inform us about Turkish export products and capabilities?
The product portfolio of the defence industry widens as we are talking about an industrial structure which is comprised of more than a hundred defence manufacturers and more than thousand small scaled enterprises in Turkey nowadays. We observe that our companies are highly competitive in certain areas providing the right technological and quality standards regarding the design and manufacturing of armoured vehicles, shipbuilding, Naval combat management systems, stabilized machine gun platforms, avionics, software defined radios, command and control systems, simulators, military clothing and logistics. When we assess the statistics regarding the Turkish exports, we see that the above mentioned capabilities turned out to be our success stories in defence export markets. Almost all products that have been developed domestically with intellectual property rights belonging to domestic actors are met with demand at the international market. Also lately, the modernization programmes of different platforms, air and land platforms especially, have been creating an important export item.
But in terms of the capabilities, I think the second part of the question defines the future of Turkish defence exports with the results of programmes SSM has been managing with the participation of Turkish Defence Industry. I think we will be able to see further capabilities and products in the near future. If we look at the Naval platforms for example, New Type Patrol Boat project hasrecently been completed for our Navy. We are so proud to achieve the export of that Naval system to different countries beforewe evencompleted the project for our navy.Similarly jammers for improvised explosive devices we exported to different nations. While we are still developing ANKA, MALE UAV, we have been receiving demands from some countries. Therefore in terms of products and capabilities, Turkish defence industry has been expanding its product portfolio and developing more capabilities with the support of SSM policies and programmes which have been determined and implemented decisively during the last decade.
Defence Turkey: How do you assess UAE and Turkey relations in defence and aerospace industry?
UAE has always been a good friend and ally for Turkey in terms of cooperation in many aspects. As to defence cooperation, we took the first big step with the procurement of armoured vehicles by UAE at the end of 1990s. During the last couple of years with the support of high level visits from both sides, we have had the chance to explore each others capabilities. Those official visits and also defence exhibitions that were organised by both sides paved the way to better understand mutual expectations and to further cooperation in many dimensions. During IDEF 2009, an LOI was signed between SSM and Tawazun Holding to enhance defence cooperation, which was the first LOI of that kind. After that signature, we have had many meetings bilaterally and decided to work closer for concrete projects. Now, we have an SSM office in Tawazun building and Tawazun Holding has an office in Ankara. We keep working on some cooperation topics that we will be able to announce in 2013. Therefore, I can say that we have taken our defence cooperation to a whole new and beneficial level for both parties and we are both eager to strive for this aim.
Defence Turkey: Could you please enlighten us about Turkeys activities and achievements realized in recent years in UAE?
One of the recent achievements of our industry is the contract signed between Abu Dhabi Ship Building Company and Yonca_Onuk for the procurement of 34 MRTPs, fast patrol boats with STAMPs, Stabilized Machine Gun Platforms by ASELSAN. Following this, ASELSAN also signed another contract for additional STAMP and STOP systems and finally, ASELSAN established a joint venture with International Golden Group of UAE for cooperation. Lately, Roketsan has had an agreement with Tawazun for Cirit 2,75" laser guided missile. In light of these developments, we believe that the cooperation programmes with UAE shall increase. We hope that we will be able to see further cooperation issues in many different areas like communication, Naval and air platforms, and armoured vehicles. We are also looking forward to see the results of the UAEs 8x8 armoured vehicle programme.
Defence Turkey: What are your plans and approach about joint production, joint R&D activities with UAE?
We have already shared our project portfolio with UAE. We have established different channels such as military dialogues and meetings. Also Tawazun and SSM have established a channel and so we are exchanging all kinds of technological issues and new programmes. The decision regarding the joint production and joint R&D is up to the efficiency and benefits of both countries. We have some topics in our agenda. As I mentioned, Cirit Programme was initiated at the end of 2012. Hopefully we will have further programmes to be announced in 2013 for joint activities in UAE and also UAE activities in Turkey.
Defence Turkey: How do you assess the future of UAE-Turkey export activities to the third countries in the region?
I think we have to look this topic from another perspective. Turkey has always been a good ally and friend to all GCC countries and in the region we have always had good relations with each of them. You know, speaking of bilateral relations of course we have different programmes with different countries. But in terms of cooperation with GCC countries we are working on some possible projects and methods that we can utilize. Turkey and UAE both are ready to support each other and come up with the reasonable solutions for the third countries. I think we will able to see some results very soon because UAE and Turkey are both very active in diplomacy and also in technological innovation and investments.
Defence Turkey: Would you like to give a message to our readers?
SSM is working with the Turkish Defence Companies to promote defence activities with our friendly nations and allies. This is our major goal and hopefully we will be able to reach some new methodologies which shall provide us more efficient ways to provide further export capabilities. Also we all believe we will be able to find some partner nations to Turkish programmes so that we will be able to develop new systems together with our allies. Speaking of export credits and foreign military sale activities by Turkey, SSM shall be able to release some new mechanisms in the near future and we will able to share with you. We will continue to promote our products and capabilities at the international exhibitions like we are doing now in IDEX in Abu Dhabi, UAE. The next event will be IDEF exhibition in İstanbul in May. Hopefully we will be able to see our partner nations in İstanbul and share with them our new projects.
I would like to thank you once again for giving me the opportunity to share SSMs approach to international cooperation with your distinguished readers.
Defence Turkey: First of all, thank you very much for this interview. What level of success has our defence industry achieved in respect of export when taking into account 2012 figures? How do you assess 2013 in terms of export activities in figures?
First of all, I would like to thank you for this opportunity. In terms of export figures, I am so glad to announce that Turkish Defence and Aerospace Industry has reached to 1.26 billion USD. As you know, the Strategic Plan that we prepared and published for the years 2012-2016 is aiming to reach 2 billion USD of defence exports at the end of the term. In this context, we can say that we are taking positive results regarding the objectives of the Strategic Plan when we consider the gradually increasing export figures of the past few years. These achievements prove that we are on the right path regarding our efforts.
So, taking into account that Turkish defence products have been attracting more customers from around the world day by day, we strongly believe that we will exceed this export amount next year. To go further, we are planning to reach a total of 25 billion dollar aviation and defence export figure by 2023, the year which will mark the Republic of Turkeys first centennial. This last figure was determined during the Exploratory Conference organised in December 2012 by Defence and Aerospace Exporters Association with the participation of government and industry representatives. So, we are quite determined to work all together to ascend in the defence exporters league.
Defence Turkey: In the coming period, it is obvious that export will be the major issue in the Turkish Defence Industry policy. In light of this, could you please inform us your export strategy and policy to increase Turkish Defence Industry export capabilities?
Along with the Strategic Plans for the periods of 2007-2011 and 2012-2016, Undersecretariat for Defence Industries (SSM) released a defence export strategy document in 2010. In this document, we have mentioned our expectations from our industry and also our government institutions. I think there were four pillars mentioned in this document.
The first issue was to see our defence industry more marketing orientated. We want them to focus on partnerships models with foreign companies as we can not talk about mere direct sales in the market nowadays. Therefore, we encourage our companies to establish joint ventures in order to further develop defence cooperation. Recently, ASELSAN, FNSS and Otokar have successfully established such partnerships with companies located in Kazakhstan, Jordan and United Arab Emirates. We do also guide foreign companies to invest in Turkey, bringing potential partners together and keeping them up to date about our industrial participation procedures and incentives.
As a second issue, the role of SSM in the export mechanism in Turkey shall be more clear and well-defined. We are trying to follow every activity related to defence export. The enhancement and diversification of relations with friendly and allied countries are vital. For that reason, we have had close connections with other related governmental institutions to follow the developments. Moreover, recently we officially opened SSM offices in three countries (USA, Saudi Arabia and Belgium) to directly coordinate our cooperation activities in those regions. We are working on opening two new Defence Cooperation Offices, one in South America, one in Far East, where we consider there is significant potential to enhance bilateral cooperation.
Following the major defence fairs all around the world, each year we are focusing on certain regions and accordingly, coordinating and organising participation of our companies in defence fairs with the concept of national participation as Turkish Pavilion. This year, starting with IDEX 2013, we are planning to organise the participation in 4 major defence exhibition in total within this concept. We are also giving great importance to IDEF 2013 that will be organized in İstanbul in May. IDEF is proved to be one of the most successful defence and security cooperation events in the region, attracting more exhibitors and visitors every two years. We are inviting all our future partners to join us in this event who share the same cooperation vision with us.
We do also continue to create mutually beneficial dialogue platforms through bilateral visits and industry days to bring industry representatives and government officials together.Every year, we are hosting more official delegations in SSM, briefing them about our industry and discussing with them cooperation possibilities. We also encourage our companies to join industry and capability Work Groups such as NATO and ASD; keeping them up to date about the cooperation possibilities and seeking more efficient mechanisms for them to bemore active in those platforms through the guidance and help of our cooperation offices. We also hold Defence Industry Days in collaboration with other countries focusing on joint development, production and seeking co-marketing opportunities for the third countries.
We do also try to utilise other cooperation channels and platforms such as the D8, Arab League, Gulf Cooperation Council, American Turkish Council. This year, for example, within the organisation of International Cooperation Platform-Bosphorus Regional Cooperation Summit-2012, a defence and security panel was organized for the first time. We had the honour to host distinguished panellists and discuss defence cooperation.
The third was the establishment of necessary organisations,marketing and financial incentives. For this reason, we have established Defence Industry Exporters Association in 2011, with full support and coordination of the Ministry of Economy. As I mentioned earlier, the Association organised the Exploratory Conference that we, defence industry representatives and related governmental officials, all came together to discuss and coordinate our efforts.
We are also working on mechanisms to offer our potential customers government to government defence sales like FMS. In addition, a credit mechanism has been established through Turkish Exim Bank in line with our defence export strategies.
Whether a Government desires to enter into purchase contracts with local defence companies, Eximbank credit mechanism can be used to facilitate meeting loan requests of Governments for the specific type of defence and security products to finance their payments. The Eximbank Loans shall be available only to finance the purchase of Defence Items approved for such financing by SSM. Upon approval of SSM local companies can utilize Eximbank credits for meeting Governments loan requests for their defence product and service purchases.
The studies for the preparation of a new law has been initiated by SSM to facilitate Government to Government sales for the defence products and services. This prospective law shall carry similar characteristics with global practices such as FMS, NSPA and DGA in defence exports. Within this law duties and responsibilities of the government institutions shall be defined. Gained incentives, exceptions and exemptions privilages in production and export of defence products by law shall be protected.
These mechanisms are vital to expand into different markets. So we are confident that with the implementation of these new mechanisms, we will enhance our cooperation possibilities regionally and globally.
As a fourth issue,the new projects of SSM should be started with more export oriented rather than pure national view. That is to say, during the process of defining the requirements for the national projects, we need to consider the products capability to be exported to the international market in medium and long term. This also underlines the necessity to work together with all the related partners in close cooperation for the same objects.
Therefore we have mentioned and we have come up with those four pillars in this document. Based on these strategies, we have have been working with government institutions and also our industry to reach our targets. And as we mentioned before, our rising export figures confirm that we are on the right track. We both have achieved to establish an industrial base that is able to meet our national requirements and been providing our foreign customers with high quality defence solutions. This gives us the motivation to keep working to guide and support our defence industry.
Defence Turkey: Could you please inform us about Turkish export products and capabilities?
The product portfolio of the defence industry widens as we are talking about an industrial structure which is comprised of more than a hundred defence manufacturers and more than thousand small scaled enterprises in Turkey nowadays. We observe that our companies are highly competitive in certain areas providing the right technological and quality standards regarding the design and manufacturing of armoured vehicles, shipbuilding, Naval combat management systems, stabilized machine gun platforms, avionics, software defined radios, command and control systems, simulators, military clothing and logistics. When we assess the statistics regarding the Turkish exports, we see that the above mentioned capabilities turned out to be our success stories in defence export markets. Almost all products that have been developed domestically with intellectual property rights belonging to domestic actors are met with demand at the international market. Also lately, the modernization programmes of different platforms, air and land platforms especially, have been creating an important export item.
But in terms of the capabilities, I think the second part of the question defines the future of Turkish defence exports with the results of programmes SSM has been managing with the participation of Turkish Defence Industry. I think we will be able to see further capabilities and products in the near future. If we look at the Naval platforms for example, New Type Patrol Boat project hasrecently been completed for our Navy. We are so proud to achieve the export of that Naval system to different countries beforewe evencompleted the project for our navy.Similarly jammers for improvised explosive devices we exported to different nations. While we are still developing ANKA, MALE UAV, we have been receiving demands from some countries. Therefore in terms of products and capabilities, Turkish defence industry has been expanding its product portfolio and developing more capabilities with the support of SSM policies and programmes which have been determined and implemented decisively during the last decade.
Defence Turkey: How do you assess UAE and Turkey relations in defence and aerospace industry?
UAE has always been a good friend and ally for Turkey in terms of cooperation in many aspects. As to defence cooperation, we took the first big step with the procurement of armoured vehicles by UAE at the end of 1990s. During the last couple of years with the support of high level visits from both sides, we have had the chance to explore each others capabilities. Those official visits and also defence exhibitions that were organised by both sides paved the way to better understand mutual expectations and to further cooperation in many dimensions. During IDEF 2009, an LOI was signed between SSM and Tawazun Holding to enhance defence cooperation, which was the first LOI of that kind. After that signature, we have had many meetings bilaterally and decided to work closer for concrete projects. Now, we have an SSM office in Tawazun building and Tawazun Holding has an office in Ankara. We keep working on some cooperation topics that we will be able to announce in 2013. Therefore, I can say that we have taken our defence cooperation to a whole new and beneficial level for both parties and we are both eager to strive for this aim.
Defence Turkey: Could you please enlighten us about Turkeys activities and achievements realized in recent years in UAE?
One of the recent achievements of our industry is the contract signed between Abu Dhabi Ship Building Company and Yonca_Onuk for the procurement of 34 MRTPs, fast patrol boats with STAMPs, Stabilized Machine Gun Platforms by ASELSAN. Following this, ASELSAN also signed another contract for additional STAMP and STOP systems and finally, ASELSAN established a joint venture with International Golden Group of UAE for cooperation. Lately, Roketsan has had an agreement with Tawazun for Cirit 2,75" laser guided missile. In light of these developments, we believe that the cooperation programmes with UAE shall increase. We hope that we will be able to see further cooperation issues in many different areas like communication, Naval and air platforms, and armoured vehicles. We are also looking forward to see the results of the UAEs 8x8 armoured vehicle programme.
Defence Turkey: What are your plans and approach about joint production, joint R&D activities with UAE?
We have already shared our project portfolio with UAE. We have established different channels such as military dialogues and meetings. Also Tawazun and SSM have established a channel and so we are exchanging all kinds of technological issues and new programmes. The decision regarding the joint production and joint R&D is up to the efficiency and benefits of both countries. We have some topics in our agenda. As I mentioned, Cirit Programme was initiated at the end of 2012. Hopefully we will have further programmes to be announced in 2013 for joint activities in UAE and also UAE activities in Turkey.
Defence Turkey: How do you assess the future of UAE-Turkey export activities to the third countries in the region?
I think we have to look this topic from another perspective. Turkey has always been a good ally and friend to all GCC countries and in the region we have always had good relations with each of them. You know, speaking of bilateral relations of course we have different programmes with different countries. But in terms of cooperation with GCC countries we are working on some possible projects and methods that we can utilize. Turkey and UAE both are ready to support each other and come up with the reasonable solutions for the third countries. I think we will able to see some results very soon because UAE and Turkey are both very active in diplomacy and also in technological innovation and investments.
Defence Turkey: Would you like to give a message to our readers?
SSM is working with the Turkish Defence Companies to promote defence activities with our friendly nations and allies. This is our major goal and hopefully we will be able to reach some new methodologies which shall provide us more efficient ways to provide further export capabilities. Also we all believe we will be able to find some partner nations to Turkish programmes so that we will be able to develop new systems together with our allies. Speaking of export credits and foreign military sale activities by Turkey, SSM shall be able to release some new mechanisms in the near future and we will able to share with you. We will continue to promote our products and capabilities at the international exhibitions like we are doing now in IDEX in Abu Dhabi, UAE. The next event will be IDEF exhibition in İstanbul in May. Hopefully we will be able to see our partner nations in İstanbul and share with them our new projects.
I would like to thank you once again for giving me the opportunity to share SSMs approach to international cooperation with your distinguished readers.
in addition to FNSS' armored vehicles and Yonca-Onuk's MRTP series we'll now export Cirit 70mm laser guided rockets. And there are some fancy words like "friendly", "ally" this is all i see.
