Aselsan Strengthens her Position on International Platforms .General Mr.Hasan Memisoglu

Defence Turkey :It can be observed

Date: Issue 27 - May 2011

Defence Turkey:How do you numerically assess ASELSAN’s export activities in 2010?

ASELSAN’s priority target is to generate national solutions in line with the requirements of the Turkish Armed Forces. Together with this we are not limiting ourselves with domestic activities and by presenting our indigenous designs to allied nations we are trying to achieve a balance between domestic sales and exports and in this way are maintaining our objective of continuity for ASELSAN.

In line with this objective, new agreements of 129.3 million USD between 11 countries were signed in 2010 and deliveries to 14 countries worth a total of 51 million USD were realized.

These are not targeted numbers for ASELSAN. The nature of defence exports is such that it can vary widely each year; in particular reaching the signing stage for a large project can take 1 to 2 years and its delivery between 3 to 5 years. In this regard it would be better to evaluate export numbers and targets based on 5 year periods.

In this sense aside from 2010 being a productive year for ASELSAN we foresee the fruits of our activities at the end of 2011.

Defence Turkey:Would you provide us with information on ASELSAN’s export oriented products and capabilities?

As I indicated before, ASELSAN’s priority objective is to generate national solutions in line with the requirements of the Turkish Armed Forces. Being one of the most modern armies in the world, to follow closely technological developments requires that the products that ASELSAN produces is in line with the requirements of the Turkish Armed Forces and thereby according to world standards. This process naturally opens the doors for ASELSAN in terms of export sales and provides the opportunity to present the latest technological products and systems produced for the Turkish Armed Forces to global markets as well. In this context, the software based wireless family; the APCO 25 professional family; our thermal and night vision products, our avionic systems, our stabilized weapon platforms and air defence systems and our radar and electronic combat products and systems are our priority in export sales.

In 2010, aside from just realizing export sales of products and systems, being in a position of a true technology exporter is considered as a proud development for us. In line with our R&D capabilities that we have developed with very serious resource allocation for years, our attainment of an indigenous technology has led us to a position of technology transfer to ASELSAN’s friendly and allied nations.

Defence Turkey:It can be observed that ASELSAN is showing its effectiveness in international platforms day by day through direct sales or by joint production through technology transfer in the Netherlands, USA, Egypt, Pakistan and Uruguay and most recently in Kazakhstan. In this context would you provide us with information on priority markets?

ASELSAN and International Golden Group (IGG) situated in the United Arab Emirates formed a joint venture company under the name of IGG ASELSAN Integrated Systems.

In the IDEX 2011 Expo that took place in Abu Dhabi between 20-24 February a joint venture agreement was signed between ASELSAN and IGG in the presence of our Minister of National Defence Mr. M. Vecdi Gönül, our Undersecretary for Defence Industries Mr. Murad Bayar and UAE officials.

Project activities continue within the coverage of the contracts signed in 2009 to integrate the STAMP and STOP systems with the boats and ships of the UAE Naval Forces and the Critical National Infrastructure Authority (CNIA). Aside from the technology transfer and offset obligations of the joint venture company with these contracts, ASELSAN is reviewing the contribution it can make in exports to the UAE and other countries in the Gulf region.

The joint venture company will be located in Abu Dhabi’s Musaffah Industry Zone and will give priority towards the production of remote control weapon systems and after sale support and marketing activities in the UAE. The company’s activities have been set so as to expand its services to the other Gulf nations in the years ahead.

In order to provide services with the purpose of meeting the requirements of the Kazakhstan Armed Forces and other security forces domestically in Kazakhstan, the facilities to be jointly established for the ASELSAN-Kazakhstan Engineering (AKE) Joint Investment Company will commence with the production of electro-optical instruments identified by the Kazakhstan Defence Ministry as a pilot project and later on other activities depending on requirements with R&D, production, sales and after sale services have been targeted.

A joint investment company has been formed between the Undersecretary for Defence Industries (SSM), Kazakhstan Engineering and ASELSAN. The ownership structure is 50 percent Kazakhstan Engineering, 49 percent ASELSAN and 1 percent SSM.

ASELSAN’s overseas sale activities are conducted by four Regional Directorates that come under the International Marketing Directorate. South America and Asia-Pacific; Central Asia and CIS nations; NATO-EU nations and the Balkans; Central and East Gulf region and North Africa are at the forefront as priority regions where our marketing activities are conducted.

Defence Turkey:Would you provide us with information on projects and programs that ASELSAN is conducting for the armed forces of different countries?

Providing project information on a country basis can result in inconveniences from the point of the defence sector. However, if we were to state it in general terms, there are on-going activities with certain friendly and allied nations on software defined radios, stabilized weapon systems, thermal and night vision products, professional radios and air defence and command-control systems and some of these will be concluded in 2011 and sharing these with the public is being considered.

Defence Turkey:You realized deliveries within the coverage of the 18 STINGER missile guidance system project for the Royal Netherlands Army. What can you tell us on the feedback received after the delivery and what is the latest situation with the project?

As you know ASELSAN won the Pedestal Mounted Air Defence System international tender opened by the Royal Netherlands Army. Within the coverage of this tender that took place in 2005, 18 systems, as planned, were delivered to the Royal Netherlands Army without problems. In this respect the feedback we received from the Royal Netherlands Army were very gratifying and at present in activities carried out for countries with a similar system requirement we are able to provide our Armed Forces as well as the Royal Netherlands Army as an important reference.

Deliveries of the systems to the TSK is continuing and marketing activities directed towards countries with similar system requirements in Europe, Asia, Far East, CIS, Gulf and Latin America regions is continuing

Defence Turkey:Within what framework are your 2011 and subsequent year plans in terms of your marketing activities directed at exports and international platforms?

Parallel to ASELSAN’s expansion targets, overseas sale figures show an increase each year. Aside from annual and periodic numerical targets that ASELSAN sets, our primary objective is to attain the proportional targets identified in line with ASELSAN’s annual sales targets. When you look at the total exports/total sales figures realized up to now, this figure for ASELSAN is 16%. Our goal is first to raise this near 20% and later raise it to the 25% level.

Our activities are continuing in this direction and aside from sales targets, product range sold and increasing sales in other countries our activities in joint investment/technology transfer applications are continuing rapidly to form more permanent relations. In this regard, we hope to share very good news with the public in 2011.

Defence Turkey:Within the framework of the exports that you have realized to industrialized nations like the Netherlands and the United States and given that these countries have accepted ASELSAN’s advanced technology you have put forth ASELSAN’s competitive strength among global defence giants. In this context, what are your strategies and targets in your work with industrialized countries?

Since the founding years which began with the technology transfer from a Dutch company at the beginning of the 1980s and parallel to the R&D infrastructure and engineering capabilities formed during the last 25 years, we have proven our technological competence by exporting the indigenous weapon system we developed to the same country.

In the present situation ASELSAN is now placed 86th in the world defence sector and is now competing under equal footing with countries and companies that are among the leaders in the global defence sector and where before we ran after them and strived to purchase products and technology we now are in a position to compete under equal conditions; where Turkey works on joint projects in other countries and where it exports its own products and technology to these firms and countries.

The proposals that these firms bring to cooperate primarily in the Turkish market is now insufficient for us. Our goal is to cooperate with these firms in their own countries and on projects in markets which they dominate and on an equal footing receive a larger share as a partner in the sector’s sales.

Defence Turkey:What are ASELSAN’s targets in increasing exports to the Middle East, Asia and Pacific regions? Are there any joint production plans with new investment ideas and technology transfer methods? Is it possible to go ahead and make a difference with investments and joint production program strategies against your competitors that have gone ahead by providing a credit mechanism to these countries? What are your views on this subject?

The markets you have stated in your question are among the priority regions for ASELSAN. Despite the fact that we are very effective in our activities in these markets if we look at the projects we have concluded it can be seen that we have not yet met the targets we wanted.

The leading reason for this is problems in financing.

As you have indicated in your question, the world’s leading defence industry firms, aside from their financial strength, also intensively use their country’s credit opportunities and political-military relations. This subject is one of the leading obstacles that we as a company and our country as a sector face in opening overseas. ASELSAN has been saying for years that financial support must be provided to the sector by state organs, through an effective organization to be formed in coordinating and organizing overseas sales and at the same time providing its support.

We have also emphasized that by preferring domestic instruments to the extent possible in products and systems, in particular by the platform manufacturing firms in this sector, would open the way for the sector. On this subject we have had successful examples of cooperation with platform manufacturing domestic firms. We believe that this type of cooperation will open the way for our firms.

Another matter that is important Another matter that is important for ASELSAN and other sector firms is to move toward permanent relations and cooperation rather than one time sales. In the last few years, in the overseas activities of ASELSAN, joint investments and technology transfer projects have come to the forefront. Many of the countries that we consider as priority markets are also going through the same stages that we went through and are giving priority to joint projects.

Defence Turkey:Would you provide us with information on the cooperation being implemented by ASELSAN with global defence firms?

As mentioned in your previous questions, at one time the world’s leading firms that could not see beyond one platform to make it easier for ASELSAN and other Turkish defence industry firms to take a step in TSK projects now with successful examples through joint project efforts and the synergy created by these joint projects in the platforms they are manufacturing or will integrate to their system solutions to the end user trust the quality of and recommend ASELSAN products.