A rising star in the sky: TEI, Engine Manufacturer in Aviation Industry

In recent years, It is obvious that TEI has taken fundamental steps to strengthen her technological infrastructure. Within the light of these developments, TEI’ s Growth rate by figures reached 250 million USD in 2007 ,

Issue 11 - June 2008

Defence Turkey: How do you evaluate the development rate of TEI in 2007? What is the growth rate compared to the recent years? How do you evaluate the position of TEI taking into consideration 2007 activities of the Turkish Defence Industry?

If we look at the figures regarding TEI’s growth rate, which is in parallel with the developments in the Aviation industry, we can see that the revenue was 75 million USD as of the end of 2004, whereas it was 250 million USD as of the end of 2007. A three-fold growth was reported over the last three years. The exportation at an amount of 140 million USD has formed the part of the total revenue of 250 million USD.

The Company targets 300-million-USD revenue at the end of 2008. It is expected nearly 190-million-USD part of the revenue will come from exportation.

As of today, we have long term contracts with our customers, mainly with our partner General Electric (GE) totally at an amount of 1,6 billion USD until 2013. Within this frame, it can be considered that the annual average amount of the incoming orders only for the production of spare parts will be over 250 million USD until 2003. In other words, at least the next 6-7 years of TEI are for granted in terms of business prospect.

Defence Turkey: TEI became the design and technology producing partner of Turkey Technology Center, which was established with its partner GE Aviation last year. What are your evaluations and comments against these developments?

We feel so excited and give great importance to Turkey Technology Center (TTC) established in Gebze. We believe that we have taken a big step in reaching our target to develop an airplane engine industry in Turkey through the establishment of TTC with GE. The studies to be performed at this center, established following the signature ceremony held on November 16th, will totally be focused on design. For example, studies on developing components of the GE origin engines used at Airbus or Boeing aircrafts will be performed. The activities of this center are not only focused on civil engines, but also on military engines.

The operation of the engine does not mean that the studies carried out on it are completed. On one hand new systems are being developed and on the other hand the currents systems are being improved. In line with the requirements determined by aviation authorities and similar institutions, the engines should be more silent, have higher performance or be environmental friendly.

The team at the TTC will first of all realize such development studies. Secondly, design studies for the new engines being developed, in addition to the current engines, will also take part amongst the activities of the center.

TTC will on one hand perform design studies and on the other hand carry development studies on production methodologies. This will carry TEI to an upper level in terms of production business. As already known, correction of some specific faults or taking some specific decisions are the processes carried out by the design engineers of the main producer since TEI has been making production under a license. Through TTC, also the TEI engineers will become decision makers in production processes.

The know-how and experiences gained as a result of the activities to be performed at TTC will provide great support and advantage to TEI for reaching at its targets.

Defence Turkey: What are TEI’s 2008 targets on investment and technological infrastructure?

In recent years, some investments have been made to strengthen TEI’s technological infrastructure. An investment at an amount of nearly 30 million USD will be made during this year and next year.

Within this frame, the activities in the fields of engine assembly, test and revision are increasing; assembly and test of 42 F110-129B engines to power 30 F16 Block 52 aircrafts, and also Depot Level Maintenance of Makila 1A1 engine of the Cougar Helicopter will be performed at TEI. The studies for Atak Helicopter Project and Honda HF120 engine still continue.

In parallel with the increasing business volume, the construction of a new facility was initiated. The construction of the new facility, having nearly 13.000 m2 closed area is planned to be completed in 2008 and put in service in 2009. The new facility will be a place where more technological studies are performed, new process and production lines are established that TEI does not currently have and thus it can be named as a “technology building”.

Defence Turkey: TEI is at the position to produce components for GEnx engines that will power Boeing 787, 747 and Airbus 350, which are currently being developed and GP7200 engines to be used at A380, which is the biggest aircraft in the world. What is the status of the studies of TEI within this scope? What is the technological excellence of TEI that makes it competitive in an international platform?

The production of 18 components is currently being manufactured for the GEnx engine developed by GE. This motor, which is currently at prototype and test stages, will be a motive for Boeing 787 Dreamliner and Boeing 747-8 of which the tests are still continuing but 700 of them were already sold on paper.

The production studies of 4 components of GP7200, which is used at Airbus 380, the biggest aircraft in the world, have been continuing since 2003.

Our sensibility especially towards quality and the factors of competitive price and timely delivery have made us a reputable and preferred company in the sector.

For example, in 2007, our metallographic laboratory took its place in the sector as a “First Class Laboratory” amongst GE suppliers. The First Class Laboratory means a laboratory where the most reliable approvals of the world are given for special processes.

Leader staffs adopted such culture are raised in TEI through intensive training activities. Total Quality and 6 Sigma are the indispensable parts of our company. The strengthening of mutual communication and delegation is ensured through a very simple organizational structure.

Defence Turkey: Within the scope of A400M project, TEI has been performing design and production activities of the two modules of the engine. What is the status of your studies within the project frame?

Through the partnership contract in terms of risk and profit share, we are in cooperation with ITP in the Consortium of Snecma/France, MTU-Germany, RollsRoyce-UK and ITP-Spain for the project regarding TP400-D6 engine that will power A400M aircraft.

The design and production responsibilities of the modules of front bearing housing and exhaust duct and special test equipments of the TP400 engine belong to TEI. We have been continuing studies since 2003.

Within this frame, the studies regarding the tests for certification and performance purposes have been accelerated. The design studies carried out in Spain by our team, composed of 35-40 design engineers, have reached the final stage. While these activities have continued under the name of “improvement”, the prototype production of such modules in TEI has also continued. As of today, the prototype production for more than 20 engines has been completed. The preparations for the engine tests have been carried out at Marshall Facilities in the UK. The first test is planned to be realized within 2008.

The engines will at first be tested on C130 and then the tests will be initiated on A400M. This development stage of the project will continue until the end of 2008 and as of 2009, the mass production activities and deliveries for aircrafts in Turkey, Germany, France, UK, Spain, Belgium and Luxemburg will be initiated.

We should underline and highlight that this project, which we have successfully accomplished until today, has a significant role for the establishment and development of our design infrastructure.

Defence Turkey: What is the status of TEI’s activities on R&D? Could you please inform us on the developed original products and systems? What is the status of your studies regarding the turbojet engine developed to be used for unmanned air vehicles?

TEI’s objective is to meet the modernization, modification and development needs of the Turkish Armed Forces and become a reputable international engine company in 2010’s.

We have four activity fields within this frame: engine components production, engine assembly and overhaul, technical services and design engineering.

In recent years, on one hand we have continuously enhanced the component variety and on the other hand renewed the production technology to increase the capacity through investments on the latest technology equipments and machinery.

It is necessary to hold design capability for being permanent in the aircraft engine industry. In line with this frame, we initiated design studies nearly 10 years ago. We recorded a progress for our design activities in 1996 together with our partner GE through “J85 Ejector Development Project” for J85 engines used in T-38 and F-5 aircrafts. This Project, which covers the design, development, flight and ground tests, certification, production and marketing of an ejector system to provide fuel saving and increase thrust, is one of the significant steps for the transition period from physical production to information generation.

Our design infrastructure became more strengthened through the participation in TP400-D6 engine project to power A400M aircraft. TEI is responsible for the design and production of the test equipments used at the test cell of this engine and of the two modules.

Another project that we have especially focused on is F136 Engine Project to power Joint Strike Fighter / JSF F-35 aircraft, which is the most important projects of the 21st century in the world regarding the aviation sector. We have been participating in the design stage of F136 engine through the agreement awarded with GE.

While these projects are being carried out, we have decided to develop a small turboprop engine due to the increase in the importance of unmanned air vehicles, both for taking place in the market in the following years and for the demonstration of the developments and technological progresses of TEI in the field of design.

Within the scope of this study, which was initiated nearly 2-2,5 years ago, a turbojet engine providing 30 HP was firstly developed. We were also in collaboration with TUSAS at this stage. For the utilization of this engine in the hull, Turna, the target drone of TUSAS, was found appropriate for this test and we began modification studies. We transformed the turbojet engine into a turboprop engine generating 90 lb power through adding power turbine, gearbox and propeller. This engine has become the first genuine study of TEI.

Within the scope of the protocol signed with TUSA? at the beginning of September 2007, the integration studies of the engine with Turna were completed following the successful accomplishment of ground tests and the first test flight was realized on April 4th, 2008. This test flight has been of great importance because the flight of the air vehicle, designed by a Turkish Company for the first time in our country, was realized by the engine developed by again a Turkish Company.

Defence Turkey: What is the participation level of TEI in the Atak and JSF Projects? What is the status of studies in this respect?

The objective of TEI is to participate in all of the national projects that are within the scope of its activity field. ATAK Project is one of the said projects. In accordance with the agreements, the production of the power turbine module of the CTS800-4 engine, developed by the consortium of Honeywell and RollsRoyce, to power T-129 helicopter will be realized in TEI. The studies are being carried out also for the realization of assembly and tests of the engine in TEI.

TEI has signed a protocol with GE for F136 engine that will power F-35 Joint Strike Fighter / JSF. TEI has been carrying out some design studies with GE for F136 engine. Besides, the production of 14 components to be used for the engines at the System Development and Demonstration (SDD) stage for the said engine is being realized. Regarding F136 engine, another important step targeted to be achieved within this year is to produce the part of the engine in TEI, of which Turkey does not have the production capability at hand until today. With the completion of such studies within 2008, it is targeted to acquire a new technology in our country.

Defence Turkey: How do you evaluate the export activities of TEI in 2007? What are your 2008 targets in export business?

TEI has taken its place amongst the leading exporters of our country with its sustainable production capacity increase towards military and commercial aircraft engines and gas turbines. The export business has formed the majority of the sales. In terms of the figures, it is recorded that TEI realized export activities at an amount of 84 million USD in 2005, 103 million USD in 2006 and 140 million USD in 2007. It is expected that the income of the export activities will reach nearly 190 million USD as of the end of 2008.

TEI continues to grow through medium and long term projects and investments. Having a global vision, TEI is the core of the aircraft engine industry in Turkey and has been contributing significantly to the economy of our country and city both for the exchange flow as a result of its production and export activities and for the activities realized until today, employment opportunities and tax payments. It will continue to grow and contribute to the country’s economy through the support and encouragement that it receives from its shareholders.