Turkish Industry Determined to Stay Competitive OSSA 4th Ordinary General Assembly Convened

SSM’s steadfast commitment supporting Defense Industry provides confidence. Suggestions abound: bring SMEs into Projects earlier to maximize opportunity, competent companies should be designing instead of contract manufacturing, set determined aggressive goals

Date: Issue 73 - April 2017

The 4th Ordinary General Assembly of OSTİM Defense and Aviation cluster OSSA brought together important actors of the sector. The Deputy Minister of National Defense Mr. Şuay Alpay, SSM Undersecretary Prof. İsmail Demir and many OSSA members attended the meeting together with senior representatives of foundations and public companies.

The 4th Ordinary General Assembly Meeting of OSSA was held with the participation of the Deputy Minister of National Defense Mr. Şuay Alpay, AKP Ankara Parliament Member Mr. Emrullah İşler, Undersecretary of Defense Industries Mr. İsmail Demir, Ankara Chamber of Industry (ASO) President Mr. Nurettin Özdebir, Chairman of OSTİM Mr. Orhan Aydın, General Director of Military Factories Murat Akkaya, General Manager of Machinery and Chemistry Industry Institution Mr. Ahmet Taşkın, TAI General Manager Dr. Temel Kotil, Aselsan Chairman Mr. Mustafa Murat Şeker, Roketsan General Manager Mr. Selçuk Yaşar and OSSA members.

In the General Assembly, the activities covering the period between 1 January 2015 and 31 December 2016 were summarized by OSSA Coordinator Ms. Hilal Ünal (she left her position on 20 January).

Ms .Ünal outlined the following issues by saying: “Firstly, we introduced ourselves both within the country and abroad. We are giving low-cost training to our companies. We are delighted to have the support of our Ministry of Economy. We are trying to provide training to each and every SME in defense and aviation/aerospace and are carrying out consulting activities. We are establishing ERP systems. These are in fact over-cost items for the SMEs, but we are providing them with the support of the Ministry of Economy. As OSSA, we participated in important defense and aviation/aerospace activities abroad with our cluster members between 2015 and 2016. We are maintaining our lobbying activities. We are getting in contact with the primary industries. We have a very close relationship with SSM. We always feel their support. The ‘Defense and Aviation/Aerospace Industry Days’ (ICDDA 2016) event, held under the auspices of the Undersecretariat for Defense Industries and organized by OSSA, was completed with 5400 registered bilateral negotiations with the participation of 2000 representatives from 200 companies and 33 countries. We expect that the support and incentives we receive from the government will continue to increase in order to accelerate localization efforts. SMEs are willing to localize the subsystems.”

OSSA Chairman Mr. Mithat Ertuğ: “We are strong with the industrialists devoted to manufacturing”

OSSA Chairman Mr. Mithat Ertuğ stated that Turkey, which had been importing almost everything for the defense industry until just a while ago, entered a maturity period and said that the volume of the sector exceeded $ 3.5 billion and the employment it created went beyond $ 50 thousand. “The sector offers significant opportunities to the SMEs. 30% of the total defense industry sector revenue comes from the SMEs consisting of sub-industry. This clearly indicates the importance of SMEs within the sector”, said Mr. Ertuğ.

“In the inception period when the cluster was established, the business was perceived as ‘acquire the job and distribute it’. It was not so easy to break down the prejudices. First, there was a need to understand what the cluster was and to create a team spirit. The basis of OSSA’s motto -We are Stronger Together- was set in those days. We have industrialists standing behind us that are dedicated to this, and we are strong with them”, said Mr. Ertuğ.

Emphasizing the warm relationship with the Undersecretariat for Defense Industries (SSM), the support of the Ministry of Economy, SaSaD and many public institutions, Mr. Mithat Ertuğ said: “I would like to thank our industrialists for their participation and for not giving up the love for manufacturing, regardless of whatever happens.”

OSTIM Chairman Mr. Orhan Aydın: “We have to establish the structure similar to the Undersecretariat for Defense Industries in other sectors.”

OSTİM Chairman Mr. Orhan Aydin stated that the Undersecretariat for Defense Industries is a valuable opportunity for OSSA and the sector and mentioned that the establishment of the Undersecretariat is very influential in Turkey’s defense industry up to the point it has reached today. We are not fortunate to find a structure similar to the Undersecretariat for Defense Industries in commercial areas where we spend more money than the defense sector such as energy, transportation and health. For example, Turkey spends more on transportation projects than defense projects, but there is not a structure where you can go and discuss details about your projects and our productions. For this reason, I would like to say that the Undersecretariat for Defense Industries is extremely important in terms of the defense sector’s protection and sustainability.”

Noting that the Undersecretariat for Defense Industries has a trained workforce that qualifies the industrialization concept in Turkey, Mr. Orhan Aydın added: “We have to establish an equivalent institution similar to the Undersecretariat for Defense Industries in other sectors and this institution should be in charge of the industrialization of Turkey.” 

The OSTİM Chairman stated that they do not find it adequate that the small producers only perform activities as subcontractors and added: “We have to transform the SMEs and the subindustry companies into a structure that is capable of designing, producing, and making systems. When we analyze the practices in the world, the following slogan is used in America: ‘Think of the little guy, small business first!’ Here, there is an approach other than trade. In Turkey, on the contrary, the ‘Think big, think of the one having minimal risk, go straight to bigger’ model is adopted at first. In European Union legislation regarding the protection of small businesses, ‘First, think of the small one! As a second priority, prefer the one having know-how!’ idea is imposed.”

Mr. Orhan Aydın: “OSTİM Technology University will be established in order to meet the needs of the industrialists.”

The OSTİM Chairman gave an explanation on the question asked regarding OSTİM Technology University: “We, as OSTİM, have been exerting efforts for 2 years. The studies for the establishment of the University were brought from YOK to the Council of Ministers.  OSTİM Technology University will be established in order to meet the needs of the industrialists.” 

Following the presentation of the Board’s Annual Report and operating income-expense account, and the evaluation of the 2017-2018 activities, the members of the Board of Directors, Supervisory Board, the Full and the Reserve members were elected.

After the voting, the deficiencies in the legislation, the incentives and support to be made, and the foresights were discussed by the sector representatives. The public and private sector representatives attended the General Assembly as guests evaluated the issues regarding the OSSA and their fields. The necessity of domestic and national production was emphasized and the contributions of collaboration with SMEs to the sector were mentioned.

At the General Assembly, it was underlined that the physical infrastructure of the SMEs is still inadequate, and the related support was asked from the officials in order to reduce the physical infrastructure costs to reasonable levels. On the other hand, the critical importance of the presence of the authorities from the decision maker in the foreign lobbying activities was mentioned.  It was underlined that the SMEs should be used more actively in the localization sub-systems activities and that the SMEs should be involved in the projects from the very beginning to increase the localization rate in new projects.

Mr. Haluk Bulucu participated in the General Assembly on behalf of FNSS and underlined that the manufacturers in Turkey should be transformed into competent companies that are capable of designing instead of contract manufacturing. He also added that the industrialists in Ankara are in need of an evolution within this frame. Mr. Bulucu stated that many international companies in many European countries adopted the vision of Industry 4.0 and are launching to transfer their investments here, especially in Germany having an aged population. Mr. Bulucu emphasized that the industrialists, SMEs and sub-industry companies in Turkey should pursue these technologies in order not to miss the train.

Following the presentation of opinions, suggestions and evaluations, speeches were made by the officials of the Foundation and Public Companies as well Deputy Minister of National Defense and Public Companies officials, Deputy Minister of the Ministry of Defense Mr. Şuay Alpay and Undersecretary for Defense Industries Prof. İsmail Demir. 

TAI General Manager Dr.Temel Kotil: “The goal we set for ourselves in order to become a global player is $ 10 Billion.”

TAI General Manager Dr. Temel Kotil touched upon the importance of creating companies that will replace TAI. “If we are able to make 10 companies like TAI after this meeting, we will grow 10 times more as TAI. The Americans have this expression: ‘Hey, thanks if you do the work I’m doing, because I’ll do something else.’ We determined our consolidated financial statement for 2017 as $ 1.9 billion. According to the 2017 forecast, the revenue of our sector will reach $ 6 billion. As TAI, we are eager to realize 1/3 of this”, said Dr. Kotil. Mentioning that TAI is the number one company that awards the most subcontracts within the sector as exports, Dr. Kotil said, “We are carrying out export activities at an amount of $ 500 million with our partners here. If we had unique products and if we were working on these novel products at our factories, we could sell them ten times more. That’s why we intend for each company here to become like TAI.  “If we can achieve our determined goal of $ 10 million, we can certainly become a player on a global scale.” 

The General Director of Military Factories General Murat Akkaya said: “We can define OSTİM as a big factory. I believe that we will deliver more successful services with you in my new position. I also believe we will especially achieve the indigenous engine project together.”

The Undersecretary for Defense Industries Prof. İsmail Demir said that the OSSA cluster should be an example to other sectors and clusters and that their support will continue as the Undersecretariat.

The Deputy Minister of National Defense Mr. Şuay Alpay mentioned that they are aware of the importance of the work performed by the industry and industrialists and conveyed his thanks to everybody who carries this heavy burden.

Following the speeches, the election results were announced. The Board of Directors and Supervisory Board are comprised of the following companies: 

Board of Directors (Full): EMGE, Küçükpazarlı, Alkan Makine, Dora Makine, Mikron Mühendislik, Skymark

Supervisory Board (Full): Tolga Plastik, Akalın Isıl İşlem ve Çetek Makina.