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Turkish Defence & Aerospace Export Surpassed US$ 2,74 Billion in 2019!

Issue 97

In a bid to start developing its own/indigenous designs, which is a direct result of the country’s heavy investment in the defence & aerospace industry that took place during last decade, the Turkish Defence and Aerospace Sector has started to promote and export its NATO-standard compliant, state-of-the-art products at a cheaper price than normal market prices, and more importantly along with technology transfer and local production options, the world’s major players are not flexible enough to meet such requirements easily. Focusing on the lucrative international arms market, the Turkish Defence and Aerospace Sector is emerging as a new arms exporter. 

Providing more efficient, low cost, combat proven, and less problematic products for arms buyers, the Turkish Defence and Aerospace Sector has increased exports by 34.6% during January 1st – December 31st of 2019 compared to the same period the previous year. This is the first time defence exports from Turkey exceeded the US$2.7 Billion level. However, though this figure represents the best performance in terms of growing exports among all sectors in 2019, it still remained below the export target that was set for 2019 by the Defence and Aerospace Exporters’ Association (SSI) in March 2019. Exports from the Turkish Defence and Aerospace Sector were expected to reach US$3 Billion by the end of 2019.

According to export figures revealed by the Turkish Exporters’ Assembly (TIM), on January 3rd, 2020 during January 1st – December 31st of 2019, the Turkish Defence & Aerospace Sector exported a total of around US$2.741 Billion, while the said figure was around the US$2.036 Billion level in the same period of the previous year. 

Turkey’s exports hit an all-time high with US$180,468 Billion in 2019, which represents a 2.04% year-on-year increase compared with around US$168,1 Billion in 2018. With a 34.6% year-on-year increase compared to 2018, the Turkish Defence & Aerospace Sector showed the best performance in terms of growing exports among all sectors in 2019. Turkey’s top exporting industries in 2019 were the Automotive, Chemicals and Textile sectors, at around US$30,594 Billion, US$17,800 Billion and US$13,858 Billion respectively. Meanwhile, even though they do not get governmental support as much as the Turkish Defence & Aerospace Sector does, and do not have an Undersecretariat or Presidency like the Turkish Defence & Aerospace Sector, the Turkish Carpet Industry has been able to increase its exports to the US$2,535.245 Million level, representing a 11.7% increase compared to 2018 (around US$2,265 Billion).

According to TIM data, the exports carried out by the Turkish Defence & Aerospace Sector soared by 13.9% percent year-on-year in December, reaching US$288,660 Million. In December 2018 the Turkish Defence & Aerospace Industry’s arms exports amounted to around US$253,495 Million.

According to data released by the TIM, the Turkish Defence & Aerospace Industry realized US$$174,498 Million in defence and aerospace equipment exports in January, US$157,657 Million in February, US$282,567 Million in March, US$197,033 Million in April, US$248,778 Million in May, US$207,582 Million in June, US$234,060 Million in July, US$175,315 Million in August, US$156,463 Million in September, US$258,091 Million in October and US$360,284 Million in November (the highest monthly export figure seen throughout the year). 

According to data released by the TIM, the total weight of products exported by the Turkish Defence & Aerospace Industry during January 1st – December 31st of 2019 was around 44,315 tons. The total weight of products exported by the Turkish Defence & Aerospace Industry in December 2019 is around 4,728.000kg. It was 3,928.000kg in October and 3,724.000kg in November. So, the average price of Turkish Defence & Aerospace export products reached US$61 per kilogram as of December 2019. It was around US$71.44 in October and US$96,746 in November. The average price of Turkish Defence & Aerospace export products reached US$57.16 per kilogram in December 2018.

According to Defence Industry Exporters' Association Chairman of the Board Latif Aral ALİŞ the average price of Turkish export products was US$1.32 per kilogram in 2018, US$1.28 per kilogram in 2017 and US$1.26 per kilogram in 2016 and the average price of defence exports was US$46.59 in 2018, US$39.71 in 2017 and US$27.72 in 2016. The per kilogram export value of the ‘T129 ATAK Helicopter’, which is one of the high added value, indigenously developed platform solutions of the Turkish Defence & Aerospace Industry, is around US$10,000. 

According to TIM’s figures during January 1st – December 31st of 2019, the Turkish Defence & Aerospace Industry has exported US$841,397 Million (which was at US$744,723 Million level during the same period last year) in defence and aerospace equipment to North America/US, US$554,960 Million (which was at the US$549,312 Million level during the same period the previous year) to EU Member Countries, around US$38,766 Million to other European countries, around US$710,145 Million (which was at around US$311,187 Million level during the same period the previous  year, rising 128.20% compared to 2018) to Middle East countries, around US$240,913 Million (which was at the US$118,303 Million level during the same period the previous  year) to the Commonwealth of Independent States (CIS), around US$89,759 Million (which was at US$120,471 Million level during the same period the previous  year) to other Asian countries, around US$75,961 Million (which was at the US$84,349 Million level during the same period the previous year) to African countries and around US$49,435 Million (which was at around the US$51,895 Million level during the same period the previous  year) to countries in the Far East.

According to TIM’s data as of November 30th, 2019 the list of the top 15 countries that imported defence and aerospace products from Turkey is composed of; the US, Oman, Germany, Qatar, UAE, Ukraine, the UK, Serbia, India, Pakistan, Azerbaijan, Poland, Bahrain and France.

With a total of around US$748,701 Million (represents a 16.27% increase compared to the same period the previous year), in purchases, the United States was the largest recipient/importer (mainly military and civil helicopter and aircraft parts, and component sales realized under offset commitments), followed by Oman with around US$262,250 Million (represents a 74.23% increase compared to the same period the previous year, one of the largest in terms of the rate of increase, mainly stemming from FNSS PARS III ACV deliveries to the Royal Omani Army), Germany with around US$242,215 Million (represents  a 14.42% increase compared to the same period the previous  year), Qatar with around US$177,786 Million (represents a 150.47% increase compared to the same period the previous  year and is believed to stem from wheeled armored vehicles, Aselsan RCWSs and fast intervention boats sales/deliveries to the Qatar Armed Forces), the UAE with US$132,016 Million (mainly stemming from Otokar’s RABDAN 8x8 III ACV deliveries to the UAE Army), Ukraine with US$118,739 Million (represents a 711.28 % increase compared to the same period the previous year, the largest in terms of the rate of increase, mainly stemming from BAYRAKTAR TB2 Armed UAV Systems sale and Aselsan’s software defined radio set deliveries to the Ukraine Army) the Netherlands with around US$72,733 Million, the UK with US$54,019 Million, Serbia with US$41,651 Million, India with US$ 40,609 Million (represents a 40.609 % decrease compared to the same period the previous year), Pakistan with US$38,537 Million (represents a 339.41 % increase compared to the same period the previous year and mainly stemming from  the Jinnah Class Frigate Project’s contract effectivity payment and Aselsan’s deliveries to the Pakistan Armed Forces), Azerbaijan with US$36,003 Million, Poland with US$33,102 Million (represents a 31.62 % decrease compared to the same period the previous year), Bahrain with US$28,373 Million (represents a 420.14 % increase compared to the same period the previous year) and France with US$28,298 Million.

As demonstrated by the above figures, Turkey has achieved considerable increases in recent years in terms of exports and turnover figures, however  the Turkish Defence and Aerospace Sector is still dependent on potential orders from the internal market. Even though the Turkish Defence and Aerospace Sector made a considerable leap in export revenues with particularly indigenous product/platform sales in the recent period, at least 1/3 of defence exports are still being actualized under off-set commitments.

To celebrate its 35th anniversary in November 2020 the SSB is as of 31 December 2019 managing a total of around 700 defence and security programs (it was 667 in 2018 and 618 in 2017) valued at around US$70 Billion in land, air, space, sea, electronics and weapon systems areas for the TAF, SGD (Turkish National Police), MIT (the Presidency of National Intelligence Organization which reports directly to the Turkish Presidency since August 2017), and other Governmental Organizations including but not limited to the General Directorate of Forestry and the General Directorate of Mineral Research and Exploration (MTA).  According to SSB data the local content rate in defence and aerospace projects reached 68% during 2019.

On December 4, 2019 the Presidency of Defence Industries (SSB), the procurement authority under the Turkish Presidency, issued the “Strategic Plan 2019-2023,” document, which states that the Turkish Defence and Aerospace Sector’s annual turnover will rise to US$26.9 Billion in 2023, from US$8.761 Billion in 2018. According to the “Strategic Plan 2019-2023,” document Turkey plans to boost its defence and aerospace (both military and commercial) exports to US$10.2 Billion by 2023, from US$2.188 Billion in 2018 and by 2023, the local content rate in defence and aerospace projects will reach 75%, up from 65 percent in 2018, according to the plan.