An Overview from Mr. Henrik Nordell, Secretary General of AFDA

Mr. Henrik Nordell, Secretary Gene

Tarih: Issue 18 - October 2009

Defence Turkey: Could you please inform us about your organization mission, structure and activities?

The mission of the Association of Finnish Defence and Aerospace Industries AFDA is to form a forum of mutual dialogue, to support our members in domestic and international networking, to express our members’ views towards national decision makers and to carry out dialogue with them. Participation in international trade policy cooperation is an important element of AFDA’s functions.

AFDA has a rather small secretariat, which means that very much of our activities are initiated and carried out by our members in various working bodies, like sectoral and horizontal committees and groups.

Defence Turkey: What are the main characteristics, core products and capabilities of the Finnish Defence Industries? Could you please assess the position of Finnish Defence Industry in global markets for our readers? What is your strategy to strengthen its position at international markets?

I told earlier that we have close to 90 member companies in AFDA. Majority of them are SMEs and domestically oriented. With a few exceptions of state owned companies, our members are privately owned companies. But we have among us also global market leaders in their specialized areas. I do not want to name them, but I’m sure the reader recognizes their presence even in this Defence Turkey’s Finland supplement.

The global leaders’ last decades’ history has witnessed rapid growth and internationalization in their civil or commercial products, very often the growth has taken place through international company acquisitions. This sounds courageous and great, but I can tell you that there are lessons learnt, as well.

Another aspect related to global champion’s successful internationalization it that they manufacturer of dual-use products and solutions. Further narrow, innovative hi-tech niches will be sought, in which even smaller companies may prove competitive.

Finnish defense administration and industry have worked jointly a development strategy. Our vision is that the Finnish defense and security industry is specialized, competitive and networked in the international market. It contributes to security, national and international military capabilities as well as security of supply. We are determined to follow that path, but we know it will be a learning process, as well. I want to emphasize the means to achieve our general goals through networking in international markets.

Defence Turkey: Could you please give us more information about mutual defence cooperation between Turkey and Finnish in terms of investment, joint production, joint research and development programmes? What is your strategy and short and long term plans for coming years to strengthen the defence industry cooperation between 2 countries?

My knowledge of concrete joint Turkish-Finnish defence industrial projects is limited. An important aspect in AFDA’s activities is to support our members in internationalization process, but when it concerns any bilateral business issues of companies, we as organisation step aside. I do not have at my disposal any Turkish–Finnish investment figures related to joint production, joint research and development programs in defence industries.

To strengthen the bilateral defence industry cooperation between our two countries in short term, AFDA has initiated to organize a Turkish-Finnish defence industrial day in Ankara early 2010. The initiative, which came from our Committee of International Business Programs reflects the view of our members. The message is clear: we should focus on the entry to Turkish defence markets.

In Finland we have tradition that industry has direct and open talking relationship with our government and different sectors of administration. Maybe this is linked to a rather small population in our country. We see the open industry-government dialogue as a strength factor.

In trying to come to the Turkish market we have secured the backing of our defence administration. Without the support from your national defence administration in international defence materiel business, which has always a state-trading dimension, our members were much weaker players.

In long term the question is of will of our members. Are there any activities that our members see it necessary to carry out together? Do they see AFDA as a proper player to bring our members and their Turkish partners together? Our members are my boss.

The partnership event in defence related industries between AFDA and national defence administration together with local defence industries, like the Turkish-Finnish Defence Industry Day to come, in my experience has been a rather efficient AFDA-tool to establish new contacts.

Participation in international defence industry exhibitions, like IDEF’09 in Istanbul is another good channel to reach potential business partners in Turkey. However, the participation in international exhibitions does not fall into the functions of AFDA. There are other specialized organisations in my country involved in this function.

Defence Turkey: As you are aware that in recent years Turkey has taken significant steps on defence technology. What sorts of business opportunities could be considered for the Turkish and Finnish companies to provide common and mutual interest with each other?

Absolutely, we are fully aware of the technological advancement the Turkish defence industry has experienced. There are similarities in this development in our two countries. Traditionally in Finland defence industry was a home market industry, but opening up of our defence procurements in late 1990s and onwards to international competition has changed the situation. Finnish defence forces require internationally competitive solutions and the only way to document competitiveness are our international references.

If you look at the development process from a single company’s point of view, first the company management has to make a strategic decision to become international, which at the beginning usually means export efforts to neighbouring markets. The next step is to seek a rational division of labour with a view of combining competitive edges, the comparative strengths between us and our foreign partners. We understand that the financing of the defence forces’ procurement programs comes from the national state budgets, this is to say from tax payers. The politicians as a rule have to show that the allocated funds are used rationally. How many domestic jobs the procurement secures or creates new ones, is one of the decisive factors to choosing the suppliers?

If I try to identify factors that will support mutual interest and can serve as base for joint future success stories and looking from AFDA’s perspective, I could mention the size of the Turkish defence market and rapidly advancing machine building industry, which in also hungry to internationalize in the neighbouring markets.

Defence Turkey: Can it be considered that Turkish Defence Industry will be the team player of Finnish Defence companies to reach the markets around Turkey such as Turkic Republics and Central Asia?

In our preparations to organize in Ankara early next year a defence industrial day together with the Turkey’s Ministry of National Defence and SASAD we have set as major objective to strengthen the existing business contacts and to establish new ones with Turkish defence industry and AFDA members. At the first stage we would like to study joint business opportunities in Turkish and Finnish defence materiel markets. But in the future, I wish to say not too far away in the future, we see possibilities to go together to third markets in Central Asia. It might be too early to try to identify the countries. We know that the Central Asian republics, exporters of oil and natural gas, represent certain opportunity.

Teaming with Turkish Defence Industry is the correct expression for the way our companies see the market entry in Central Asia. Turkish companies have traditional, well established relations with these countries. But before going there I see the need for a proper home work, team building in Turkey and Finland.

Defence Turkey: Would you like to give some additional information and messages for our readers?

I think, when in Finland you mention Turkey, and reciprocally I believe that when in Turkey you hear the word Finland, you mentally stop for a second and the thought “yes, we have much in common” is an important attribute determinant of your mindset.

We are looking forward to seeing many partners in Ankara at our joint defence industrial day in Ankara very soon.