Turkish Armed Forces Foundation: Significant Contributions to develop Turkish Defence Industry

Turkish Armed Forces Foundation (TAFF) which made direct contributions to national defence industry and national economy undertakes the managemet

Date: Issue 9 - January 2008

Defence Turkey:Could you inform us about the activities and contributions of the Turkish Armed Forces Foundation (TAFF) which made direct contributions to national defence and national economy? What were the contributions of TAFF to the defence industry in the last year?

At first I would like to say that discussing the contributions TAFF made to defence industry and country economics as a whole would be more appropriate for this.

Foundation has to use 80% of its annual gross income for its purposes. Today, %65 of this income goes to the force projects and remaining %35 goes to the defence industry investments.

The foundation’s direct contribution to the defence industry is carried out by establishing new companies, being a partner of the present companies, increasing its shares in companies and participating in raising its companies’ capital. The funding required for these activities is met through %35 of the foundation’s income allocated for the defence industry.

As a result, these fundings are not allocated regularly and equally every year. In some years investments made into defence industry reach to large amounts of money while in some years they reach to small amounts of money. For instance, approximately 49 million YTL was invested in defence industry in 2005. But, our capital for one of our companies was raised to 6 million YTL for the necessary modernization investments in 2007.

We are monitoring the remaining fund which is not used in the past years in different fund account in order to use it later. The fund which is worth for 97 million YTL was transferred to the defence industry.

In this sense, apart from the direct contribution we make an indirect contribution for the defence industry. At first i had mentioned about %65-%35 of the fund to be spent on foundation’s purposes. Indeed, %65 of the income allocated for the force projects goes to defence industry. The foundation pays for the defence systems required by the forces by purchasing them from the defence industry companies. İn other words, the foundation is a sponsor for the forces in a state of demand in particular projects while being a customer for the defence industry companies. Also, it transfers the sources reserved for the force projects to defence industry companies and ultimately creates a work for them too. Thus, 97 million YTL was provided for defence industry between 2002 and 2007 and the source transfer was implemented. 69 million YTL of this was transferred in 2007. The contribution made for the defence industry in the last six years has been 200 million YTL

Defence Turkey:What are your objectives and plans about increasing the contributions made to defence industry by TAFF? Is there any new project regarding to more source transfer?

The fact that establishing and developing national defence industry is our main objective is written in our founding code and main act. So we will increase the sources we allocate in order to increase the defence industry investments and to meet the needs of the force. Naturally we have to increase our income. Because as our income increases, our funding amount we provide for the defence industry and force projects will increase.

The biggest share in our income belongs to the profits we get from the companies. As a result, we are looking ways to work on various projects so as to increase our profit incomes. Especially we have to prevent same and replacement activities which lead to investment repeats resulting in a waste of source. We have achieved lots of things. We think that once this project is completed, company profits will increase and consequently the founding’s share of profit will increase as well.

In our other project, we intend to change employee payment system into a performance-based patment system which will lead the personnel to be more productive. All in all, we expect founding’s share of profit will increase again as a result of this.

As it is known the procurement projects carried out by relevant authorities are out of control. We are aware of the fact that our companies are able to get these projects through their original techologies and products. So we are paying great attention to developing original technology and product. We are keeping our efforts to increase search and development activities by means of our company’s board of director represantatives

TAFF also contributes to the promotion of our defence industry through IDEF regarded as one of the biggest fair in Eurasia and organized biannually. Upon looking at the figurative data, we see that IDEF–2007 has increased its efficiency in every aspect. In this context, what do you think about IDEF–2007 and IDEF’s degree of development year by year?

In accordance with our motto “direct contribution to the national defence and economy”, one of the most important responsibilities we take as TAFF is to carry out IDEF international defence industry.

Today’s fairs have become one of the most important economy activities which get specialized companies and their customers come together, contribute to the wealth of the host country and city and leave all the added values to the national economy.

Our foundation took the responsibility of holding the IDEF international defence industry fairs under the auspices of the ministry of defence by considering the fact that fairs’ role in the defence industry should be employed in favor of the country. So, our foundation has held eight IDEF fairs with this understanding of responsibility in odd years since 1993.

Our goals we want to achieve by organizing IDEF international defence industry are below:

To exhibit the technological developments in combat arms and defence industry.

To get the local and foreign defence industrialists come together.

To enable a direct contact between local/foreign companies, guest board members and Turkish suppliers.

To carry out technology transfer by seeking international cooperation opportunities

To host all participating company representatives and board members in a best way by taking the traditional Turkish hospitability understanding into consideration.

IDEF fair which is among the limited defence industry fairs in the region and world has become an important promotion and market center for our country with its increased participants and visitors

IDEF fairs in which the local and foreign companies initially participate in order to contact with suppliers has become one of the biggest world defence industry market for companies. I want to mention about IDEF–2007 data in order to embody the success achieved. 161 local and 333 foreign companies, which is in total 494, participated 8th IDEF-2007 international defence industry fair which was held between 22 and 25 may 2007. From 47 countries; 264 delegation members were hosted during the fair and among them 10 were minister of defence, 4 were chief of the general staff. 595 meetings were conducted between agencies and foreign delegations and firms. 13 signing ceremonies, 9 seminars and promotion conferences were carried out.

Defence Turkey:Could you please inform us about your activities regarding IDEF 2009? What are your objectives for coming IDEF to increase the efficiency of the fair? Within the scope of these objectives, what kind of innovations and developments will IDEF 2009 offer?

The preparation and implementation efforts for IDEF-2009 was accelerated by determining a location and date for the fair. İt was agreed upon to hold 9th IDEF-2009 international defence industry in İstanbul-Beylikdüzü Tuyap fair and congress center between 27 and 30 April.

I want to emphasize the fact that some unfavorable conditions we had to face in Ankara had an effect on determining İstanbul for the fair, which has been one of the most important steps taken since the day IDEF was started to be held.

As soon as IDEF-2007 finished, we initiated the negotiations including written correspondences with Turkey Jockey Club (TJK) so that 9th IDEF-2009 fair would be held in 75th year Ankara hippodrome again. But it was informed by TJK that they could not call off the planned races during the dates when the fair would take place and they could only dedicate the hippodrome in winter when there is no race. But it is not an appropriate date for the fair. Also it was emphasized that race circuit was to be expanded and there were several projects about establishing new social facilities and open-space areas for spectators.

As you know during and after IDEF-2007 countries and large scale companies demanded additional space up to twice as big as the space they had occupied in IDEF-2007. As a result we had to inform TJK that we were not able to meet these demands under these Hippodrome conditions. As we are determined not to make any concession in meeting demands, it seems impossible to hold the IDEF fairs in 75th year Hippodrome because of TJK’ s projects which were put into practice and which ultimately will lead a space loss. Upon this, efforts to find a new location for the fair in Ankara was initiated, but it was discovered that present locations would not able to meet the increasing needs of IDEF fairs.

Finally, I think the decision on holding the fair in İstanbul will contribute IDEF fair to keep its prestige in the world and to become the biggest international defence industry in the region by taking advantages of wide facilities of İstanbul which is preparing to be the cultural center of Europe in 2010.

We as a foundation are continuing our efforts to go ahead, to maximize the number of participant countries and firms and to enable delegates and participants to reach its target audience in a best way.

I thank for your support and contributions in promoting and holding 9th IDEF-2009 international defence industry fair in a best way and wish our fair were beneficial for our country and participant firms.