SAHA Istanbul, Thrives in Continued Growth with Participation of New Companies

We had an exclusive interview with İlhami KELEŞ, Secretary General of SAHA Istanbul Defense and Aerospace Cluster Association, Turkey`s largest and the fastest growing industrial cluster, about SAHA Istanbul’s founding purpose, its services and support provided to member companies, activities carried out and/or supported in 2020, its 2021 targets and expectations, and the performance of SAHA Expo 2020 - Turkey`s first virtual defense and aerospace exhibition - since its opening on November 9, 2020.

Issue 105

Defence Turkey: Could you briefly summarize SAHA Istanbul's story of around 6 years since its establishment, the founding purpose and its accomplishments during this period?

İlhami KELEŞ: SAHA Istanbul was established by initiatives of 27 founding members also from the Presidency of Defense Industries (SSB), Istanbul Chamber of Industry (ISO) and Istanbul Chamber of Commerce (ITO) on March 17, 2015, with the aim of performing activities in the Northern Marmara corridor which covers 54% of Turkey’s industrial production. After its foundation, in 2016 SAHA commercial enterprise was established, and the Yıldız Technopark Liaison Office was opened. Entitled to MKFED Membership, our cluster moved to its current office in Teknopark Istanbul in 2017. 2018 was quite hectic for SAHA Istanbul. As a member of the European Cluster Association, it set a target for itself of becoming Europe's second largest defense industry cluster. In the same year, it carried out the SAHA EXPO 2018 Defense Industry Exhibition. This exhibition, unlike other Defense Industry fair organized in our country, brought together companies that contribute or wish to contribute to the defense industry as manufacturers/suppliers. One year after the exhibition, SAHA EXPO Inc. was established to carry out fair organization activities internally. In the same year, the first of our MBA programs was initiated to train executives for the defense industry, started by SAHA Akademi Inc. In the first months of 2020, with the Covid-19 outbreak in December 2019, the whole world and our country felt the unprecedented impact of the pandemic. During the fight against the pandemic, we produced the products needed locally with our members. We shifted our networking activities to a digital platform and supported our members in learning new skills by organizing "Webinars". In addition, the SAHA MBA Program, which we aim to make a global brand, continued in hybrid mode. With these activities, 2020 was fruitful in all aspects for SAHA Istanbul. Within the scope of the "Gaziantep Defense Industry Development" Cooperation Protocol signed between Gaziantep Chamber of Industry and SAHA Istanbul, the SAHA Istanbul Gaziantep Branch was opened.

With the National Aerospace Industry Committee (MİHENK) formed with the participation of Turkish aerospace industry giants under the leadership of SAHA Istanbul, Turkey has become the 13th country that has completed the European Aerospace Quality Group (EAQG) integration.

The COVID-19 pandemic has affected the traditional Defense Industry Fair concept. We had to postpone the SAHA EXPO 2020, that would normally be held physically, to November 10-13, 2021, within the scope of the measures adopted by our Ministry of Interior due to the pandemic. Afterwards, in this period when business relations moved to the virtual environment, we took pride in being proactive and opening the "World's First 3D Defense Industry Exhibition". The SAHA EXPO Virtual Exhibition was not physically held in order not to endanger the health of the participants due to the pandemic and it will remain open until April 9, 2021. BİTES, a member of SAHA Istanbul and an Aselsan company, developed the virtual exhibition application XperExpo for the event. Offering all opportunities of physical fairs to participants, SAHA EXPO attracted attention both at home and abroad.

Turkey's largest Defense Industry Cluster SAHA Istanbul continues to grow with the participation of new companies. With membership approval granted to the company applications in the last board meeting held in January, the number of SAHA Istanbul member companies has increased to 588.

With an accomplished public-industry-university ecosystem, SAHA Istanbul plays an active role in the nationalization of the defense industry. SAHA Istanbul, with its industry leading members such as Aselsan, Roketsan, HAVELSAN, Baykur, BMC, Tümosan, MKEK, Turkish Technic, STM and ASFAT, positions itself as an NGO that provides the most effective support to Turkey's National Technological Move carried out in defense, aviation, and aerospace industries.

Despite being founded just 5 years ago, SAHA Istanbul has become Turkey's largest cluster and the European Aerospace Cluster Association’s (EACP) second largest cluster. The cluster seeks to encourage domestic and national companies to produce in the defense industry, civil aviation and space sectors. To this end, a series of studies are also carried out, such as ensuring the synchronized operation of the industry with our universities, providing state support to projects, providing production capabilities that are not available, and providing collective support in the search for overseas markets.

Defence Turkey: As SAHA Istanbul, what kind of services and supports do you provide to member companies at home and abroad?

İlhami KELEŞ: SAHA Istanbul is a structure that exists with its members. There is no commercial activity as a cluster and in fact it provides support to the state and its public institutions in this context. It coordinates two UR-GE projects for its members to become advantageous in international competition and to increase their export capabilities. SAHA Istanbul closely monitors and coordinates the activities carried out within the scope of the EYDEP project initiated by the Presidency of Defense Industries in order to identify the positions of the companies in the Defense Industry Supply Chain and to increase their competencies in this field.

With the MÜRGEMER Project carried out with the contribution of Marmara University and Teknopark Istanbul, we also aim to support our companies in the supply of design and analysis software.

Our SAHA MBA program, on the other hand, paves the way to increase the management skills of member companies’ employees with courses and lectures given by prominent sector figures, in addition to academicians from our country and countries across the world. 

MİHENK (National Aerospace Industry Committee) conducted its internal inspection in January with the 9104-2 Form F document and shared the required documents with the EAQG OPMT. The internal inspection was accepted and it was audited by EAQG OPMT on January 27. Turkey will acquire a certification capability upon SAHA Istanbul ’s receiving this certificate. In this way, our companies’ obligation to acquire the certificates from foreign countries and our country’s foreign dependency in terms of certification will be eliminated. 

Defence Turkey: What comments would you like to say on the current status of the Turkish Defense and Aerospace Industry and Turkey’s position in the Defense and Security Market? 

İlhami KELEŞ: In 2002-2019 Defense and Aerospace turnover increased by 10 times while the exports of these sectors increased by 12.4 times. As of 2019 Turkey’s defense expenditure reached US$ 20.4 billion, and this amount falls to 1% of the entire world’s total defense expenditure which is US$ 1.9 trillion. Total employment of the sector reached 73,771 people. 

On the other hand, 7 Turkish companies remain in the list of top 100 defense industry companies in the world with the highest turnover levels. These companies and their turnover are as follows: Aselsan US$ 2.2 billion, TUSAŞ US$ 1.9 billion, BMC US$ 533 million, Roketsan US$ 515 million, STM US$ 485 million, FNSS US$ 374 million and Havelsan US$ 295 million. 

R&D expenditures increased by 34 times and the budget of R&D projects reached TRY 3.5 billion. Within this scope, 230 people in 18 universities, 438 people at 13 Research Centers and Institutes, and 2,371 people in 60 companies are working as R&D project stakeholders. Decisions were made for 36 projects to be launched and R&D Wide Area Requests for Proposals (SAGA) were planned for 17 R&D projects. The total ongoing and completed projects stands at 104. 

Defence Turkey: What would you like to say on the activities and studies that SAHA Istanbul either realized or supported in 2020? 

İlhami KELEŞ: We established SAHA AKADEMİ in cooperation with SAHA Istanbul and TÜBİTAK TÜSSİDE. We launched the SAHA Akademi MBA Program at three centers in Istanbul, Ankara and Gaziantep, each with classes of 25 students, and this program initiated for mid-level and senior level managers still continues. SAHA MBA’s vision is to become one of the top ten education institutions as a global brand in the defense industry area. Free specific technical training which may qualify as on-the-job training is offered to our members within the body of the SAHA Akademi. 

We accelerated our projects in 46 activity areas with our committees and members. Our Material and Material Forming Committee will continue to conduct research and indigenization activities into the infrastructure and requirements for manufacturing strategic material used in the defense industry, particularly steel, aluminum and titanium material from the mining process to the end-product stage with our member companies. Activities have been executed and will be carried out to acquire the capabilities we lack in technologies such as the forming process of the material when transforming it into end-products and heat treatment, layered manufacturing and precision machining. Activities for the development of material and sub-components required by epoxies have been executed as well. All the aforementioned activities will also continue in 2021. 

Under the auspices of our Machine and Other Manufacturing Equipment Committee, the MİLTEKSAN A.Ş. Company was founded as a joint venture of our 11 companies and a production road map was drafted as part of SAHA Istanbul ’s activities for building 5-Axis CNC Control Units. 3-axis CNC Control Units will be produced in 2022 by this company and production of 4-axis control boards will follow in 2023. Finally ,in 2024, 5-axis, new generation CNC Control Units with a precision of >%2 or below will be manufactured. Production of threaded rods and ring nuts is planned meet the demands of the defense industry. The “spindle” and its driver are also aimed to be produced. Activities for building the capacity to locally produce components in which we have foreign dependency, such as high-precision redactors used in smart devices, sliding shaft, servo, “spindle” and spindle drivers are being maintained as well. 

We already have launched 2 Product Development projects as part of this committee’s activities and the requirement analysis studies of the projects are in progress.

Our Software, Automation and Digital Transformation Committee has been executing activities in cyber security for the protection production facilities and smart production equipment from cyberattacks as part of the software committee activities in coordination with the SSB, universities and TÜBİTAK. Our committee’s sub-workgroups are carrying out projects in an accelerated manner, and activities on artificial intelligence software and their utilization by defense and aerospace sectors are being carried out. Creating a software market for domestic software and including Academicians and SMEs in this market, gathering information on software from SAHA Istanbul member universities are a few of such activities. Also, the commercialization of the software inventory and our member companies’ software that has not yet been commercialized and the Training Program for Developing Engineering Software (MÜYGEP) will be conducted. 

Fulfilling the demands of defense industry stakeholders in particular and the indigenization of enterprise resource planning programs required by our country’s industry are aims within the scope of a project launched by SAHA Istanbul in the first quarter of 2021. The first of a series of online meetings has been held and a consensus has been reached on the urgency of the matter and the necessity of building an open-source ecosystem. The studies to define a draft road map have been launched under the guidance of the Ministry of Industry and Technology, TÜBİTAK TÜSSİDE and SAHA Istanbul and with the contributions of leading companies in our sector. The business plan will be launched upon the identification of the road map and the project is planned to be carried out with the government’s support. 

Activities to fulfill the industry’s connector demands and relevant areas of expertise have been launched in our Electric and Electronics Committee. Activities on data recording systems, black boxes, 3D sound systems and pitot tubes are being conducted as part of the avionic activities.

Activities towards establishing a test, development and training center for unmanned systems are being conducted as an indigenous project by the Test and Certification Committee. Additionally, building an inventory of the companies active in the maritime sector and conducting activities by identifying the test, certification and training areas required by the naval platforms are aimed.   

With MİHENK established within SAHA Istanbul’s thriving body, Turkey has joined the league of Global Aerospace Quality builders. Thanks to MİHENK, Turkey became the 13th country to be integrated into the International Aerospace Quality Group (IAQG). With this IAQG status, SAHA Istanbul has been qualified as the 11th National Aerospace Industrial Association (NAIA) in the Online Aerospace Supplier Information System’s (OASIS) database.

Activities for achieving the license from the International Aerospace Quality Group for Turkish Accreditation Agency to accredit local companies are being carried out as part of MİHENK activities. This process is planned to be completed by early 2021. With another equivalent activity, one of our members, Turkish Lloyd will be able to grant AS9100s as the first national certification company. 

Efforts for obtaining an ISO 9001 certificate are being exerted to accomplish SAHA Istanbul ’s institutionalization process. We have been working to improve our website and CRM infrastructure to achieve the digital transformation of SAHA Istanbul and provide better services to our members. 

Defence Turkey: Could you evaluate the year 2020 which was heavily influenced by the COVID-19 pandemic? What are your targets and expectations in 2021? And on that note, would you like to comment on Turkey’s Defense and Aerospace Industry’s export performance in 2020? 

İlhami KELEŞ: Shadowed by the COVID-19 pandemic, the year 2020 resulted in recession, shrinking production capacity and disrupted supply chains. 

According to Turkish Exporters Assembly’s (TİM) data, total exports of Turkish Defense and Aerospace Industry in January 2020 was US$ 166 million and 936 thousand. In January 2020, total defense and aerospace exports amounted to US$ 181 million and 761 thousand. The exports conducted between January 1 and February 29, 2020 increased by 5% compared to the same period of the previous year and reached US$ 348 million and 697 thousand. 

However, this momentum started to slowdown in May 2020. The quarantine processes launched with the outbreak had an impact on the entire world resulting in decreases in export figures. According to the data provided by TİM, the Turkish Defense and Aerospace sector achieved exports of US$ 1 billion 521 million and 396 thousand throughout the first 9 months of 2020. As similar worldwide, defense exports experienced a decline in Turkey due to the COVID-19 pandemic, but revitalization occurred in September. In the sector, total exports increased by 80% September 2020 compared to the same period of the previous year and reached US$ 281 million and 582 thousand. 

As per the data of the first three quarters of 2020, the Turkish Defense and Aerospace Industry conducted the highest level of export activities to the following ten countries: USA, Germany, the UAE, India, the Netherlands, Qatar, Switzerland, the United Kingdom, Azerbaijan, and France. Pakistan and Ukraine may also be included in this list. The figures regarding the Defense and Aerospace Industry are declared each year in detail, however the figures that will demonstrate 2020’s accomplishments have not yet been announced.  A clearer picture will be illustrated as soon as the number are revealed. 

Surely, the National Technology Move that has been maintained for nearly 20 years will be carried out in 2021 in an intense manner. We have been witnessing the concrete results of this movement as a country. Turkey’s rate of domestic participation in the defense industry increased to the level of 70% from 20%. In the following process, the transition into indigenous and national production will continue in more strategic products and systems that include high technology. The rate of domestic participation in defense industry is aimed to be increased to 71%, the defense and aerospace industry’s foreign sale revenues are anticipated to US$ 6.2 billion, the turnover target of this industry will be US$ 19.7 billion and employment is aimed to reach 81,500 as a result of the activities to be held within the scope of the “Presidential Annual Plan for 2021.” In this respect, as Turkish industry’s frontrunner from past to present, the Defense Industry will continue to perform its duties in 2021 by increasing its success.

As SAHA Istanbul, we have an intensive work schedule in 2021. One of the most critical items on our agenda will be the world’s first 3D virtual defense industry exhibition SAHA EXPO which we launched on November 9, 2020. The SAHA EXPO Virtual Exhibition will run until April 9, 2021. This virtual exhibition is open 24/7 visitors across the world and we will put forth our best efforts to render it a global brand. We delayed the SAHA EXPO Exhibition to 2021, due to the pandemic and we will hold the event on November 10-13, 2021 physically at the Istanbul Expo Center in Halls 5, 6 and 7.

There are seven committees within SAHA Istanbul, and each committee has 15 members. In addition to participating in an integrated body within SAHA Istanbul, member companies with similar production capabilities serve in the committees built in accordance with areas of expertise. These committees hold regular meetings and conduct projects. The committees will continue their activities in 2021 and we will be witnessing concrete results in some of these projects. 

We will have a General Assembly in 2021 and we will conduct B2B activities as part of Product Development in 2021. We are negotiating with foreign procurement delegations and business delegations according to the circumstances caused by the pandemic. Our activities will continue towards improving the exports of companies through the Product Development processes we built within each Committee.

We will be launching our new MBA Programs for the spring term. We will also continue our vocational training and training courses. European Aerospace Quality Group (EAQG) inspections will be executed as part of the National Aerospace Industry Platform (MİHENK). 

We will be organizing events to gather main contractor companies, contractor companies, or conducting negotiations directly, based on projects with suppliers.

The activities we will be performing in line with our strategic plan are grouped as follows:

Activities we will be performing with our member companies regarding business development

Activities for improving SAHA Istanbul ’s corporate infrastructure

Activities we will be conducting as part of SAHA EXPO, both in virtual and physical fair platforms

Activities for fulfilling the country’s demands through manufacturing by combining SAHA Istanbul companies’ capacities. In other words, the activities we will be conducting for producing what is not yet produced in Turkey.

The studies on proposal and legislation development by our companies and universities to pave the way for decision-makers to make sound decisions,

Training activities to be accomplished as part of SAHA Akademi,

Participation in domestic and international fairs, activities that contribute to the promotion of our companies in such platforms.

Defence Turkey: Organized by the SAHA Istanbul cluster and held virtually for the first time due to the COVID-19 pandemic, the SAHA EXPO 2020 Exhibition started online on November 9, 2020. Could you share with our readers the figures regarding the performance of SAHA EXPO since its opening? For example, the number of B2B meetings held by the sector professionals from Turkey and around the world, the number of domestic and international visitors?

İlhami KELEŞ:  SAHA EXPO has been visited by a total of 85,348 visitors so far, 73,457 of which are locals and 11,891 are foreigners. At SAHA EXPO, which has a total number of 320 participants, including the Turkish Defense Industry's world-renowned companies Aselsan, TUSAŞ, Roketsan, Baykar, Havelsan, STM, MKEK, ASFAT, TAIS, FNSS and Kale Group, the participating companies and local-foreign delegations can conduct meetings in 744 virtual meeting rooms. The international visitors of the exhibition are mostly from countries such as Bangladesh, Pakistan, Malaysia, Ukraine, India, the United Kingdom, Nigeria, France, and Italy.

Within the scope of the virtual exhibition, 26,926 B2B meetings were held or planned, where significant cooperation opportunities were evaluated. The participants will be able to conduct B2B meetings until April 9, 2021 which is the last day of the Virtual Exhibition.

As the world’s first Virtual Defense Industry Exhibition, SAHA EXPO attracted the interest of foreign press as well. Many news and media outlets from Norway to Iran, and Japan to the US featured our Virtual Exhibition in their publications. The interest in the exhibition stimulated the participant companies. Where sixty companies displayed 3D products in the opening of the exhibition, this number rapidly reached 102. The number of 3D products demonstrated in the beginning was 355 and with the addition of new products this figure has increased to 536.

Defence Turkey: What would you like to tell us about the SAHA EXPO 2021 Defense, Aerospace Industry Fair, which is announced to be held physically in Halls 5, 6 and 7 at the Istanbul Expo Center between 10-13 November 2021?

İlhami KELEŞ: Organized with the support of the Presidency of Defense Industries (SSB), Ministry of National Defense and the Ministry of Interior, the SAHA EXPO Defense and Aerospace Industry Exhibition is an international platform that exhibits the increase in Turkey’s domestic production potential and the independent production capacity. At SAHA EXPO where high-tech products are exhibited, many products of strategic importance in the defense, aviation, maritime and space industries will be introduced for the first time.

SAHA EXPO brings together the defense industry’s main contractors such as Aselsan, Baykar, TUSAŞ, TEI, Roketsan, BMC, Havelsan, STM, TÜBİTAK, FNSS, Sarsılmaz, ASFAT, Kale Group, MKEK and TAIS, with major global defense industry companies and suppliers of different sizes, and it also has a role in highlighting the support given to the Turkish defense industry to the National Technology Move.

Professional visitors and buyers from many regions including Europe, America, Africa, the Middle East, Ukraine, Russia, Malaysia, Indonesia, Bangladesh, and India will participate in SAHA EXPO.  The Expo will be held in an area 5 times larger than SAHA EXPO 2018 and will be a gathering point where many international agreements will be made. 

Defence Turkey: Mr. Keleş thank you for your time on behalf of our readers and we wish you success in your future endeavors