Defense Industry Focuses on Quality and Quantity to Step-up Turkey’s Exports

The Defense Industry, by exporting one third of its production aims to increase its exports by 20 percent in 2016.

Date: Issue 70 - September 2016

The Minister of National Defense Mr. Fikri Işık, Deputy Undersecretary for Defense Industry Dr.Celal Sami Tüfekçi and Chairman of the Defense and Aerospace Exporters’ Association (SSI) Mr. Latif Aral Aliş, accompanied by the board members of the SSI and many members of the press attended the press meeting of the Defense and Aerospace Exporters’ Association held at Çırağan Palace.

The 2016 half-year assessment of the sector and expectations for the second half of the year were shared with the participants at the meeting and Chairman of the Defense and Aerospace Exporters’ Association (SSI) Mr. Latif Aral Aliş took the floor first.

Mr. Aliş said: “We, as the defense and aerospace industry, are completing major projects one by one, and launching new national projects. We continue to make our nation proud, to make a major contribution to our country and to be the bright face of Turkey in exports. Growing with R&D activities and technological investments, our defense sector now exports more than one-third of its output.” He stated that the exports of the sector increased by 11.6 percent according to June 2016 data, and that they aimed to achieve 20 percent growth in the sector in the year 2016.

Defense Industry is Amongst the few Sectors Increasing Exports in 2016

 Underlining the fact that the defense industry has been one of the very few sectors increasing its exports in 2016 compared to the previous year. Mr. Latif Aral Aliş expressed his gratitude to the Minister Mr. Fikri Işık and continued: “The association of our Dear President being in the first place, our Prime Minister, our Minister, our Commanders of the Armed Forces, our Undersecretariat for Defense Industries, our Minister of Economy, our Chairman of the Turkish Exporters Assembly (TIM) and all our institutions provide us with the greatest assurance in reaching our tough targets at the soonest time possible”.

The Average Price of Export Products in Turkey is 1.34 $ per Kilogram whereas it is 25 $ per Kilogram in the Defense Industry

Noting that Turkish defense companies were included in the list of the world’s biggest defense companies and that the sector targeted to realize exports worth $ 25 billion in the year 2023, Mr. Latif Aral Aliş said: “To attain our export target, we need to increase our exports both quantitatively and qualitatively. The average price of Turkish export products is $1.34 per kg, which compares with an average of $ 25/kg for the exports of the defense industry. To this end, we support our SMEs in their endeavor to join in with the exporters by working together with our universities and by developing new products not only in big cities, but also in other provinces.”

SSI Chairman Mr. Aliş underlined the importance of the Association’s increase of members to 450 from 60 members since its establishment in 2011 and added, “Today, as a country which manufactures its own satellites, unmanned air vehicles, training aircrafts, helicopters, infantry rifles, battleships, armored vehicles, missile and rocket systems, developing simulations and software, becoming partners to worldwide projects such as F-35 and A400 M, building satellite production and test centers, initiating satellite launcher base construction activities and indigenous helicopter projects, we will be achieving these targets with our highly qualified human resources, research institutes, R&D laboratories, SMEs and major companies”.

Minister of National Defense Mr. Fikri Işık: “We aim to increase our defense exports over 5 billion $ in a short period”

The National Defense Minister Mr. Fikri Işık touched upon the importance of Turkey having a strong democracy, a strong economy and a strong army in order for the country’s survival and to look toward its future with confidence, and said: “Turkish Armed Forces have the most qualified human resources in the world. We should support our qualified human resources with a strong defense industry.”

Stating that a 11.6 percent increase in the exports of the defense industry was pleasing, the Minister Mr. Işık said: “By investing heavily in R&D and innovation, we have paved the way for production of high-value-added products in our defense industry which is an indispensable sector. The private sector and SMEs should play a bigger role in the defense industry. We believe that growth in the defense industry will be realized by the private sector. We assess we will thus raise the exports of the defense industry from around $ 1.7 billion to $ 5 billion in a short period of time. I believe that we will be able to achieve such figures by selling platforms and systems with high added value rather than selling more products. We have conducted the required negotiation during our recent official visit to Pakistan. Turkey won the project valued at $ 350 million for the modernization of Agosta type submarines. Many other similar negotiations continue. I believe we will achieve this target by further increasing the efforts by our private sector that have been exerted up until today.”

SMEs Financial Access Getting Easy

 Mr. Işık stated that they wished for the increase of the number of SMEs in the Defense Industry and added that they were conducting studies to achieve transfers from certain sectors such the automotive sector to the defense industry. Mentioning that Turkey required more production, employment, investment and exports at this point Mr.Işık added, “We launched a study for enabling the utilization of the Credit Guarantee Fund by the SMEs of the Defense Industry. We will exert all efforts for allowing our SMEs more efficient utilization of this fund in their access to finance”.

Exports Increasing by 87 % Since 2011

 The Association achieved exports worth $ 884 million in 2011, the year of its establishment, and increased its exports to $ 1.656 billion in 2015, increasing the rate by 87 percent. The United States of America, Commonwealth of Independent States, Members of the European Union, Countries of the Caspian Sea Region and Gulf Countries remain as the target markets at the focus of the Defense and Aerospace Industry. The Defense Sector included the Far East and Africa markets in these markets as well. According to the data of 2016, NAFTA countries took the first rank with 34.3 % in the distribution of exports to regions. European Region Countries followed with 23.7 %, Middle East Countries with 18.3 %, Far East Countries with 8.6 % and followed by Commonwealth of Independent States with a 7.5 % distribution of exports.