Havelsan 3rd Business Ecosystem Gathering Held in Ankara

Date: Issue 79 - February 2018

The 3rd Business Ecosystem Gathering hosted by Havelsan was held in Ankara with the theme ‘Strong Cooperation for a Strong Turkey’. Numerous executives and representatives of the Major Industry companies, SMEs and Sub-Industry companies attended the event where presentations on Havelsan’s business ecosystem and implementations of the company in procurement processes, KOSGEB (Small and Medium Enterprises Development Organization) Grants and Incentives, SSM (Undersecretariat for Defense Industries) EYDEP Project approaches and standby credits were shared with participants. After the presentations, the most successful suppliers from various categories were awarded. Following the lunch break, negotiations under many different titles were held with the suppliers at 26 tables within the framework of bilateral cooperation.

Havelsan General Manager Mr. Ahmet Hamdi Atalay: “One of our strategic targets as Havelsan is to transform our structure from a project oriented product approach to a structure having strategic products”

The opening speech of the 2nd Havelsan Business Ecosystem Gathering on 8 December 2017 at the Bilkent Hotel was delivered by Havelsan’s General Manager Mr. Ahmet Hamdi Atalay. Noting that within the scope of the vision for 2023, they identified to create a Havelsan with a turnover of $1.5 billion that exists amongst the top 100 companies of the worldwide defense industry as a strategic target for themselves, Mr. Atalay added that while reaching that size, they planned to achieve 1/3 of their turnover from the defense industry, 1/3 from civilian activities and the remaining 1/3 from foreign sales.

Underlining that Havelsan has a project based operation, Mr. Atalay stated that they wished to transform their company from one that assumes and completes project based works into a company having strategic products and continued: “We endeavor to build our technology and product management system while creating our business ecosystem. Since we operate on project basis, we deliver the products we developed to our customer as part of the project. Each time we repeatedly conducted the similar activities yet we never had an off-the-shelf product, now we are turning the output we have here into commercial products, we will have these products at our shelves and we will be gathering these products in projects, we will configure them in accordance with the requirements and introduce them to our customers in that way. Therefore, we adopted a strategic target that will turn us into a product company from a product-project company. Again, for supporting the aforesaid strategy, we adopted another strategy that is developing indigenous, domestic and national technologies that reduce the foreign dependency.”

Stating that one of their strategic targets is to increase foreign sales, Mr. Atalay stated that they aimed to become a global company and that they were taking long term steps to that end. Mr. Atalay: “We intend to become a regional power and we took concrete steps towards this direction. There are important business opportunities especially in the Gulf Countries, there are businesses we accomplished in addition to some contracts we already signed and ones we are about to sign. We opened our office in Qatar and we are about to complete the official establishment process of the company there. We also conduct the preparations for opening offices in Kuwait and Saudi Arabia in addition to Pakistan. Therefore, I can say that we are proceeding towards becoming a well-known technology company in our region.”

Havelsan General Manager Mr. Ahmet Hamdi Atalay: “As Havelsan we expect our business partners to develop themselves in specific areas.”

Mr. Atalay underlined that Havelsan aimed to grow with its shareholders instead of an organic growth and added, “Our other strategic target is to grow inorganically with our shareholders within our business ecosystem while we achieve all our other targets. What we refer to as our business ecosystem is the one composed of our business partners and Havelsan exists at the very center of this structure surrounded by the aforesaid business partners. This ecosystem operates in the following way; the candidate business partner companies reach us through various channels (telephone e-mail, etc.). We hold introductory activities regarding our company for them and companies visit and give details on their own capabilities. Then they enter their information via the internet to our business ecosystem and make applications. After that we procure a service from an audit company and these applicants are audited. The audit company submits us a report upon theirs visits and we classify our companies in accordance with this report into A, B, C and D categories. In the aftermath, we make a second visit as Havelsan. We conduct on-site audits to observe the level of the capabilities and competence of the companies with the potential for cooperation. Then, when there is a need, we request an offer from these companies registered to our ecosystem. The mechanism operates in this way. Afterwards, we evaluate the price, quality, service speed and delivery duration criteria and performances of the companies we collaborate with. As a result of these assessments, the performance scores of the companies are calculated. In this way, we build the A, B, C, D categories. From now on, as we will be holding the very first ceremony for it this year, we aim to award the most successful companies at the end of the year. Up to date, we accomplished various businesses with approximately 1000 companies from our business ecosystem. There are 275 companies which we may refer to as business partners, registered to our system. As Havelsan, our growth is directly proportional with the growth of our business partners, therefore we ask these companies to select a specific area for themselves.” 

Havelsan General Manager Mr. Ahmet Hamdi Atalay stressed that the Quantum 3D company they bought in America last year started its operations and gave an important message to the shareholders of the industry. Atalay said, “This Company is a crucial opportunity for all companies in our ecosystem, mainly for our foundation companies wishing to operate in America. Hereby I would like to address all our shareholders. If you wish to take part in such markets and if you have the sufficient capability, then our doors are always open to you.”

KOSGEB President Prof. Cevahir Uzkurt: “Regarding SME incentives, we are building a product based, project based, company based private support mechanisms instead of a classical method.”

Addressing the participants at the opening ceremony President of KOSGEB Prof. Cevahir Uzkurt mentioned that, supporting an ecosystem based on the cooperation of the focus points lied within the scope of KOSGEB’s vision for the future and continued, “We launched two new support programs as part of this vision. Within this framework, we signed a cooperation protocol as the main contractor with the Undersecretariat for Defense Industries, and our companies such as Havelsan and Aselsan. So far we have supported our SMEs in many ways and areas. And we will continue to support them; however, in our following attempts for building new support models, we will endeavor to provide rather product based, project based, company based, and industry based supports instead of the classical support mechanisms. As KOSGEB, the companies to which we will provide support have to be in the scale of SMEs. Yet I believe that if you are to support the SMEs in the current economic system, proceeding merely with the SMEs would not be quite rational as most of the SME companies are conducting their production activities for the major companies based on their requests. Even if, as KOSGEB, we would not provide support to major companies still we absolutely wish the Main Contractors to be in this scenario. We advise the following to the main contractors. You identify the SMEs with the technological capabilities and competencies sufficient for manufacturing the technological products you require or the main products we import; sign initial contracts with these SMEs, build cooperation and apply to KOSGEB; and thus, we will create various support models in line with your requirements and demands.”

Prof. Cevahir Uzkurt: “We support the high-end technology products with completed R&D studies and that become prototypes up to the limit of 5 million TL.”

Prof. Uzkurt shared the details of the support packages they prepared with the participants and said, “We named one of the two support programs I mentioned earlier as the strategic product support program. Here, we want the byproducts or final products we import to be with a high level of technology, medium-high technology and especially in manufacturing industry. In the event that these products are manufactured in Turkey by our domestic and national companies, we will be providing a support up to 5 million Turkish Liras (est. $1.31 million). A part of this support program that could be supported 100% is composed of machinery and equipment expenditure and software expenses. 

In my opinion, the cooperation built within this ecosystem would be benefiting to a large extent from this program. On one hand, we built a support program regarding the intermediate products we import and on the other hand we reinforced particularly the R&D centers as well as the R&D and technology development phases of the business through technology development zones until now. In this sense, we will be providing support up to 5 million TL (we are also authorized to double the support if the product in question is a critical one) again with the same model to our companies manufacturing a technological prototype available for production with completed R&D studies and that is supported both by the government and international funds. We named it as the SME Support Investment Program.”

Havelsan Deputy General Manager in Charge of Operations Mr. Cenk Özen: “We assigned contracts worth 71 million TL in 2017 to our business partners in our business ecosystem.”

Deputy General Manager in charge of Operations at Havelsan Mr. Cenk Özen made a presentation on Havelsan’s business ecosystem and procurement process implementations. Telling that they aimed to decrease the expenses, time and risks they assumed through the ecosystem they built, Mr. Özen added that they intended to increase their performance as well as the satisfaction of their customers with the effective utilization of this business ecosystem and relayed information to the participants on their activities in the 11-month period of 2017. Mr. Özen: “As of today, 490 companies are registered to our ecosystem, the companies selling us products to which we refer as suppliers are not included in this figure. We have audited 286 companies so far. If we take a look at the results of the audits, the companies in group A consist 6% of our total companies and similarly the ratio of group D is around this level, group B and C constitute the most of this percentage. Within 2017, in this 11-month period we accomplished a total of 83 tenders covering our business ecosystem and from 280 companies we requested 874 proposals with a contract price of 71 million TL (est. $18 million). 10% of these proposals were from group A, 50% from group B and 40% from group C. When we analyze our companies that did not respond to the request, we observed that most of them were conducting activities aside the areas they declared and therefore did not submit any proposals. This causes a severe loss of time. Therefore, we kindly ask our business partners to fill the information regarding their companies in a more earnest fashion at our business ecosystem portal.”

Stating that they expected the companies within the business ecosystem to become competent in certain areas, Mr. Özen added that the companies increasing their capabilities in specific areas would be standing out in the next period. Sharing their goals towards the business ecosystem in 2018 with the participants Mr. Özen said, “We will have a financing support agreement with Akbank. We will be conducting trainings to be funded by Havelsan in order to create awareness in quality management with our business partners. Besides we will be holding meetings for informing our business partners. Our ‘academy days’ meetings will be available to our business partners as well.”

Sharing essential information on KOSGEB Grants and Incentives - Defense Industry Special Support Program to the participants Mr. Ahmet Dursunoğlu, Head of the KOSGEB Technology and Innovation Support Mechanisms mentioned that KOSGEB issued two more new support programs in accordance with its strategic action plan and continued: “With the technologic product support program and strategic product support program, we created crucial incentives for the nationalization of the critical products that bear critical importance especially regarding the main industry and sub industry cooperation and for the realization of the required investments. Through our strategic product support program we aim to increase the domestic input, indigenization and nationalization of the strategic products that are highly imported. With this support, we plan to extend the high technology, the operation of our SMEs and major industry companies in harmony while contributing to the reduction of the current deficit. Here we have three main models. Our Small Sized SMEs could apply to our organization individually. According to the second model, our SME companies will be able to apply to our organization with a preliminary contract they signed with a company of a larger scale. And finally in the last model, multiple SMEs could bring their projects to our organization by gathering with a major business. We request the applicant companies to have at least 1 year of business experience.”

The Competency Inventory of the Industry being created with EYDEP Program

Presenting on behalf of the Industrialization Department at the Undersecretariat for Defense Industries, Electronics and Software Sector Manager Mr. Evren Yücel stated that as the Undersecretariat they built an industrialization portal and added that up to date 625 companies have registered into this portal. Mr. Yücel: “We have 2919 products designed and manufactured by Turkish companies in the industrialization portal. Moreover, we launched the Industrial Competency Evaluation and Support Program (EYDEP) eight months ago. There are thousands of SMEs in Turkey. What we want to know is, which technologies won? From where did they get the support? We are launching a new period with the EYDEP. The activities we held as part of EYDEP up to date were as follows: We examined the industrial assessment processes, developed question sets and conducted certain pilot implementations. An assessment pool was created with the participation of all foundation companies and several private sector companies and we received training from them. The implementation as part of this EYDEP program proceeds as follows: We have an application and the evaluation request may either come from you or from us. We say let’s include this company to the EYDEP evaluation process. First of all let’s register it to our portal, then send the company our preliminary question sets and then visit the company for assessment and prepare a report. The point here is to see whether the company is institutional and to observe its technical capabilities. So we wish to report such points. If the number of companies in a certain area is higher than it should be, then we aim to direct them towards the areas we will be identifying. If the process is planned well and if we manage to direct our companies well, then a company within the C or D category in the initial assessment could be elevated with our support. We need to position our companies well in the industrialization period.” 

Following the presentations, the Supplier Award Ceremony was held. This year, for the first time, the award for the longest standing cooperation, performance development award, competitive approach award, technology development award, qualified cooperation development award and promising technology company award were delivered by Havelsan. 

The awarded categories and companies are as follows:

Qualified Cooperation Development Award: Simsoft and Siren Bilişim

Technology Development Award: Yepsan, Infodif Yazılım, Aeroteam Yazılım

Performance Development Award: MilSOFT

Most Long Standing Cooperation Award: BİTES

Competitive Approach Award: Ante Grup Elektrik-Elektronik Bilişim

Promising Technology Company Award: X-Sinerji Technology Services 

Moreover, Supplier Financing Cooperation Protocol was signed between Havelsan and Akbank at the event. During the second half of the gathering, cooperation meetings with the suppliers were held under different titles consisting of a total of 26 tables