STM Goal is to be Among the Top 50 of the World’s 100 Largest Defence Companies within Five Years

by Cem Akalın Ranked 97th among the top 100 defence industry companies in the world for the first time, with US$ 369 million in defence sales 2018, STM, within the framework of Turkey’s 2023 vision, aims to take its place among the top 50 of the world’s largest 100 defence industry companies in the next five years

Date: Issue 89 - January 2019

STM General Manager Murat İKİNCİ and International Strategy and Business Development Manager Onur ATEŞ met with representatives of the sector in Ankara to share STM’s 2023 vision. After the brief opening speech given by General Manager İKİNCİ, Onur ATEŞ made a short presentation about STM’s product portfolio, projects and export markets.

STM International Strategy and Business Development Manager Onur ATEŞ stated in his presentation that STM has made significant progress in 27 years and said: “Since its establishment in 1991, STM has further improved its vision. Today, STM carries out its main activities as consultancy services in the fields of surface and sub-surface military vessel engineering, cybersecurity, autonomous systems, command control & mission planning systems, civil information and satellite systems. As of today, we have approximately 650 employees. Ninety percent of our staff portfolio have bachelor’s, master’s and doctoral degrees, with an average age of around 37 and approximately 15 years of sector experience.”

Stating that the activities of STM in the last five years, both in Turkey and abroad,are reflected in the company’s turnover, ATEŞ said: “With the defence industry turnover we achieved in 2017, we ranked 97th among the 100 largest defence companies in the world. It is very important for us to enter this list as the fourth Turkish company and our aim is to be permanent on this list.”

STM International Strategy and Business Development Manager Onur ATEŞ: “We assumed the Modernization of 3 Submarines in Pakistan”

Sharing information about the important projects carried out by STM in Turkey and abroad, ATEŞ continued as follows: “Military Marine projects, one of the leading activity areas of STM, has enabled the domestic industry to participate in the eco-system with the design and integration capability of the MILGEM project. STM plays a vital role in this project. The 3rd vessel was recently delivered. The 4th ship will be delivered to the Turkish Naval Forces Command next year. Likewise, in submarine projects, there is an important task given to us by the Turkish Naval Forces Command and Presidency of Defence Industries in the roadmap of the national submarine project. We are building 6 New Type Submarines in Gölcük Shipyard. In this project, both controlling the industry participation and the development of design capability is an important capability for Turkey. Under the submarine modernization project, where a company became the main contractor for the first time since the Turkish Navy, we carried out the modernization of the U-209 submarines and delivered it successfully. Soon, we will start working on the second batch of the U-209 class submarines. At the end of a very difficult race, we won the tender for the modernization of the French origin submarines in Pakistan, leaving behind the manufacturer of the submarines. We assumed the modernization of 3 submarines. There is a great deal of trust behind the delivery of this project, especially to a non-designer company that has not produced those submarines. This trust comes from the persevering work we carried out in the ‘PNS Moawin’ Pakistan Fleet Replenishment Tanker project, which we delivered in the past months with a ceremony attended by the President of Pakistan. The process began in 2013 and it was fully designed for the needs of the Pakistan Navy command. This project is very important for us, within the scope of this project, 20-25 Turkish companies took part in this project with us.”

The Fleet Tanker Delivered to the  Pakistani Naval Forces in October 2018

STM delivered the Fleet Tanker, which began development in 2013, to the Pakistan Navy on October 16, 2018. Pakistani President Arif ALVI, Pakistan Defence Production Minister Zobaida JALAL, President of Defence Industries Prof. İsmail DEMIR and STM Senior Management attended the ceremony.

‘PNS Moawin’ was designed by STM (main contractor) from scratch, according to the requirements of the Pakistan Navy and was built by the Pakistani Defence Production Ministry at the Karachi Shipyard. The notable unique military cooperation between the two countries within the scope of the Fleet Tanker Project resulted in the successful construction of military ships between Pakistan and Turkey.

Within the scope of this project, which is one of Turkey’s most important projects in terms of military naval platform exports, more than 20 Turkish defence industry companies also had the chance to export to the Pakistani market. 

Features of the Fleet Tanker

The Fleet tanker was developed by STM and Pakistani Naval Forces as the first ship of its class.  With a weight 16,400 tons and a length of approximately 158 meters, it can reach speeds of 20 knots with two propellers that have adjustable blade angles powered by two diesel engines. With its Replenishment/Fueling-at-sea systems (RAS/FAS), the ship will support Pakistan Navy’s combat/auxiliary elements by transferring critical equipment such as fuel/water and ammunition to them at sea during operations, thus increasing their operational capability.

The ship has the capability of executing day and night helicopter landing/take-offs due to its hangar and platform and also has a comprehensive infirmary. 

STM has also achieved major success as it was awarded the submarine modernization tender initiated by Pakistan’s Ministry of Defence Production against the company which built the submarines in 2016.

STM has marked major success in being awarded the international tender that was initiated for the half-life modernization of class “Agosta 90B” submarines in the inventory of Pakistani Naval Forces; competing against the French company which designed and built the submarines themselves. Covering a total of 3 submarine modernization orders; 1 of which is confirmed in addition to 2 orders on an optional basis; the contract was signed on 22 June 2016 in Rawalpindi/Pakistan; between Pakistan’s Ministry of Defence Production and STM; under the supervision of officials from the Embassy of Pakistan in Turkey and the Presidency of Defence Industries (SSB).

As part of the project regarding the modernization of class “Agosta 90B” submarines; STM entered a long, compelling competitive evaluation process with French DCNS Shipyard which undertook the designing and production operations for the aforementioned submarines. After a tendering process beginning on April 16, STM was found to be technically and commercially superior and was selected as the main contractor to sign the contract. 

The modernization operations are performed at a local shipyard in Pakistan. The first submarine will be delivered in 45 months. The other submarines are estimated to be modernized with 1 year in between the modernization of each.

ATEŞ: “We are in the Delivery Phase of the Turkish Armed Forces Cyber Defence Center Project”

Providing important information to the press about their fields of activity in the field of technology besides the surface and submarine projects, ATEŞ also stated that they determined their strategies in this field to fill the gap of innovative products which are mostly supplied from abroad and continued as follows: “Cybersecurity comes first among these. We are the main contractor of the Turkish Armed Forces Cyber Defence Center and we are in the delivery phase of the project. We have signed on for a big project with the Turkish National Police Department for the Combating of Cyber Crimes. We also provide services to both the public and the private sector in our intelligence and operations center within the cyber fusion center. We will continue to provide services abroad by increasing our capabilities. We are conducting studies on big data applications and data analytics-data optimization. We developed a platform called Overa, a capability directly supporting Industry 4.0. This system, which we developed together with Temsa company, is a platform where we can manage vehicle performance and preventive maintenance in all vehicles. In autonomous systems, we have delivered our KARGU - attack drone (Loitering munition) to the Turkish Armed Forces and started export activities at the same time. There are mostly fixed-wing products in loitering munitions, however, the point we reached in the rotary wing is very pleasing, and I can say that we have created one of the best platforms in the world.”

KARGU – Autonomous Rotary Wing Attack Drone in Serial Production

The KARGU which is developed and manufactured indigenously by STM is categorized as an autonomous rotary wing attach drone or micro UAV.  

It is capable of carrying three different warhead configurations, with its warhead selected through automatic target acquisition, the KARGU is capable of destroying the target marked by the operator by diving with a speed of 140 km and with the help of the warhead. Known also as the loitering precision strike munition, the man - portable KARGU can be utilized by mobile units due to its 7 kg weight and though it features fully autonomous task capability, it could be utilized by an operator due to its decision - making capability. With its fully autonomous flight capability, the KARGU is able to conduct flights without requiring GPS and with RF signals and data link, it is capable of changing targets, calling off tasks and recall functions as well.

The KARGU is capable of executing operations in night and day conditions with the help of its electro optical day camera and Infrared night camera. Depending upon weather conditions the KARGU is able to fire at instant opportunity targets within a distance of 5 to 10 km from an altitude of 450 m, within 10 - 15 minutes, with less costs compared with guided munitions. This drone can self-destruct diagonally and quite close to the target and thus cause destruction in a wide area with its 1.6 kg anti-personnel warhead and with the smart fuse. It is capable of carrying thermobaric munition weighing 1.1 kg in order to cause destruction in closed spaces such as caves and buildings. In addition, according to the information we acquired, armor piercing ammunition activities for the KARGU are being conducted.

Due to the image processing algorithm, targets of various types (i.e. vehicle, human being, animal) are identified on the operator’s monitor and in this way the operator distinguishes the threats and other civilian components, focusing on the actual target and fires it.

The KARGU systems were initially put into the service of the Turkish Armed Forces (TAF) in September 2018. The President of Defence Industries, Prof. İsmail DEMİR announced the delivery of 40 additional KARGU systems to the Turkish Armed Forces via twitter account on 24th December 2018. In conjunction with the new deliveries, total number of KARGU systems in the TAF’s inventory has reached 65, thus KARGU is becoming one of the most crucial munitions of the TAF at theater. 

Apart from the KARGU Drone system, which gives the Turkish Armed Forces a significant ability, ATEŞ also shared information about the other products included in the inventory of the Turkish Armed Forces and emphasized that the Through the Wall Radar Systems, which entered the inventory of both the Turkish Armed Forces, Gendarmerie and the Turkish National Police, play an active role in the fight against terrorism. ATEŞ said: “We know that our product has been successful in operations and has proven itself in the field. We also continue to develop two different configurations of the Standoff Through the Wall Radar System, which will be vehicle mounted and hand-held. As STM, we also have two satellite projects as Nano and microsatellite. The microsatellite will be an observation satellite and we’re planning to launch in a year and a half. Our nanosatellite project will allow us to track the maritime pictures of commercial ships, collect signals and transmit them to the center. We consider these satellites as a cost-effective solution that can be utilized as a constellation.”

ATEŞ: “TANKOM - Tank Command Control and Information System Software - to be used on the ALTAY Tank”

Emphasizing that they will participate in the mass production project of the ALTAY Main Battle Tank with the Tank Command Control and Information System software project, ATEŞ said: “As a company with software history, STM has shown itself not only in the command control projects in Turkey but in NATO projects as well. STM currently has the capabilities, which provided a solution to NATO’s Air Force image gathering system, and that we still carry out command and control integration in Afghanistan. This skill set developed under the TANKOM brand can be utilized both in the ALTAY MBT and in various armored vehicles. The activities we carry out under the same roof together with command control also support mission planning systems. We have solutions for both military and civil aviation in this area. We provide solutions from helicopter obstacle detection systems to fixed and rotary-wing mission planning systems for both ground and air units. These products are currently used on platforms in the inventory of the Turkish Armed Forces. Our civil aviation information solutions for large airports, which we have developed together with Turkish Airlines, are also included in our product portfolio.”

ATEŞ: “We are launching a competition called deep quests, which will support undergraduate and graduate students in submarine design and technologies”

In the last part of his speech, Onur ATEŞ also shared information about an important competition that will be organized in the near future with press members for the first time. ATEŞ said: “With the deep quests contest we have initiated this year, like the Capture the Flag competition in Cyber Security, we will organize a competition to support undergraduate and graduate students for submarine design and submarine technologies. We are in cooperation with many universities. We invite students to present their thesis and projects in this area. We will share the results of the contest with the public next year.”

Creative Ideas to Compete in the Deep Quests Competition

In order to reveal indigenous submarine projects, one of the most complex platforms in the world, and to support the capability development in this field in Turkey, a competition in submarine design and technologies will be organized by STM under the name of Deep Quests. The competition will allow the evaluation of the creative ideas of various undergraduate and graduate students from different disciplines. University students and graduates of different departments from ship construction to physics, from psychology to industrial engineering, and people who have written a thesis in this field in the last 5 years are anticipated to attend the competition. In the competition, which will be held in two categories as Master and Bachelor, projects will be evaluated by experienced individuals in the maritime field in accordance with the criteria of innovation, creativity, achievability, aesthetic contribution, level of detail and references.  The winners of the project will be awarded a monetary prize. Within the scope of the award ceremony planned to be held in October 2019, the first prize in the master’s category is 25.000 TL, the second prize is 20.000 TL and the third prize is 15.000 TL and in the bachelor’s category, the first prize will be 20.000 TL, the second prize will be 15.000 TL and the third prize will be 10.000 TL.

İKİNCİ: “Our goal is to be among the top 50 of the world’s 100 largest defence companies within five years”

Following the comprehensive presentation by Onur ATEŞ, General Manager Murat İKİNCİ stated that STM aims to take a larger part in world markets especially in the areas of military ships, autonomous systems, and cybersecurity and said: “Thanks to Turkey’s national technology breakthrough in the last 15 years, our ingenious products have emerged. However, we cannot talk about technological sustainable growth without selling them abroad. We have made serious efforts to improve Turkey’s export capacity. Under the 2023 vision, which the Presidency of The Republic of Turkey’s has set for the Defence Industry and under the leadership of the Presidency of Defence Industries, we are developing competitive products, systems, and services in the world with critical technology in order to achieve the export target of US$ 25 billion. As STM we aim to become a global player both with our export steps and our indigenous and innovative solutions supporting the needs of Turkey’s national technology development”

Emphasizing that STM continues to undertake significant export successes and will continue in the coming period, İKİNCİ said: “We consider all the companies as partners in the defence industry eco-system in Turkey and we carry out collective and complementary activities for both our domestic needs and our export activities abroad. As STM, we act with the vision of becoming a global company which is capable of producing value-added critical technologies and develops innovative, competitive systems and products for niche markets. STM will continue to grow in various fields of the defence industry with its existing capabilities.”

Emphasizing that they aim to be among the top 50 of the world’s 100 biggest defence companies within five years, İKİNCİ said: “We aim to increase our growth based on exports and to achieve even higher ranks in this list. Our investments in engineering and technology show us that this growth will increase further. Amidst our Fleet Replenishment Tanker export to Pakistan, approximately 20 Turkish companies have also exported concurrently with us. We carried out these sales with the contribution of our 650 staff and sector partners. Within five years, we aim to be among the top 50 of the 100 largest defence companies.”

İKİNCİ stated that they aim to increase the 15% share of export sales in total turnover to 50% and they will achieve their goal if they succeed. He also said that they expect to close 2018 with a total sales turnover of more than 3 Billion TL. İKİNCİ stated that in order to capture the targeted figures within five years, they will use the workforce of their sector partners in the most effective way, and they anticipated that their current staff positions would rise above one thousand personnel.

İKİNCİ: “There is a significant interest for Attack Drones from the countries in the Middle East and Turkic Republics

Emphasizing that they agreed with Pakistan on the half-life modernization to the third Agosta 90B class submarine and deepened their cooperation there; İKİNCİ stated that the export activities in the naval sector continued with Pakistan and Kazakhstan in the field of cybersecurity, and they are ready for exports in the field of autonomous systems (drones). Expressing that there is an interest in Attack Drones from abroad, İKİNCİ said: “There is a significant interest for Attack Drones from the countries in the Middle East and Turkic Republics, we have performed several successful demonstrations there with positive results and we are expecting export orders. We can even say that we are in the process of specifying numbers. I believe we will inform you in a very short time when these sales are completed.

Answering our question about the latest developments on the ALPAGU fixed-wing attack drone, İKİNCİ said: “Work on ALPAGU Block-I and Block-II with more ammunition capacity are underway. Both configurations emerged as a product, however, it requires some additional work to turn them into marketable products. I believe we will complete this before the IDEF fair.”

İKİNCİ: “We will continue to provide our support for the marketing and engineering of MILGEM Ships in the international arena”

İKİNCİ clarified a question about the role of STM in the export of MİLGEM Corvettes to Pakistan: “STM will continue to be a part of the MILGEM project and, at the moment, it has the most extensive engineering knowledge in the MILGEM project. We are not interested in who signed the contract in Pakistan. We see the successful realization of Turkey’s exports as the main focus for us. We will provide our support in this regard. STM has the most extensive engineering experience in MİLGEM and naval systems. This experience will be definitely used for the continuation of projects. Our work on MILGEM will continue to grow even more. There is no turning back on this issue. We are trying our best to provide marketing and engineering support for these projects in the international arena.”

Indicating that STM also assumed an important responsibility in the New Type Submarine Project İKİNCİ said: “Our mission in the New Type Submarine project is to ensure the localization of the submarine systems with all our efforts. Thanks to the engineering support provided here, we were able to manufacture the torpedo tubes known as section 50 and among the most critical parts of the submarine, locally in Turkey. Our New Type Submarines will use these localized indigenous torpedo tubes.”

İKİNCİ: “Engineering Studies to be Initiated for the Design of Midget Submarines”

İKİNCİ also shared information about the future vision of STM: “In the future, we will continue our projects as an engineering company in submarine and surface platforms. We are initiating our engineering studies in this field in such a way that includes domestic and national unmanned systems, submarine systems and mini-class submarine designs also called midget submarines. Instead of developing a large submarine, we think that a smaller submarine with a capacity of 30 crew members could be developed and we have started to work on it. We don’t have a calendar ahead of us right now, but we’ve passed the capability-building phase. We will project this and realize it in later stages. STM, of course, will not carry out this work alone, we are considering bringing together national and international companies to work on this subject. On the other hand, we will also expand the family of autonomous vessels that can operate underwater and on the surface.”

İKİNCİ stated that they aim to expand the KARGU and ALPAGU family, also dubbed as Kamikaze drones, and provide these products with the capability to engage multiple targets by introducing swarm technology and artificial intelligence. “We have been investing in this matter for a long time. In the future, these products will be revealed, and we will share them with you. Lastly, big data and cybersecurity are highly crucial fields for us, it is not possible to separate artificial intelligence from autonomous systems and future defence systems. Robot soldiers are becoming a trend in the world and I am sure that we will see artificial intelligence and autonomous systems in the field. If you cannot protect these products in terms of cybersecurity, the information you have can be captured by enemies. Cybersecurity does not only involve the security of information systems. It will be used as a tool to ensure the safety of autonomous systems to be developed with artificial intelligence. In this respect, we consider cybersecurity as very important and our investments in this context will continue.”

Below 70 Kg Micro-Satellites are to be Launched at the End of 2019

Stating that STM is also working on cost-effective satellite solutions called microsatellites, İKİNCİ said: “In the field of micro-satellites, which will act as below 70-Kg observation satellites, there is no other study currently being carried out in Turkey. These satellites, which are around 70 kilograms and can operate in a constellation, are able to provide cost-effective and high-quality images. When you consider the launching costs of large satellites, the launch cost of these satellites, which can also be assigned in a constellation, is very low; you can launch five or six of these satellites and you can gather five to six times more images from the same point within the day. In this context, we aim to launch the first satellite towards the end of 2019 and capture images. As a result of the feedback that is to be received, we plan to increase the number of these satellites by manufacturing the second and third satellites. I would like to emphasize something here. There is a huge cost when you lose a large satellite. When the operational life of microsatellites is over or if you lose the satellites, the cost of the loss is significantly lower. Our other small satellite PiriSaT is a satellite used to control marine traffic. Marine traffic in Turkey currently is controlled via antennas and radars stationed on coasts. These signals have certain distance constraints due to the roundness of the earth and other factors. When you launch such a satellite into space it gives you a capability to monitor all the marine traffic in an area of 2,000 kilometers in Turkey and it allows you to accomplish this with only a fraction of the current costs.”

After the Q&A session, the press conference ended with a family photo