TURKEY - Industry
General Manager, Makina ve Kimya Endüstrisi Kurumu (MKEK)
İzzet Artunç graduated from the Naval Post Graduate School-Monterey/US with an MSE degree and also holds an MBA degree from the University of La Verne. He was a Commander of the Turkish Submarine Group from 2005-2006 and Chief of Logistics of the TNFC from 2006-2009. He served as the Commander of Turkish Coast Guard Command as a Rear Admiral and retired in 2011. Artunç has been the General Manager and Chairman of the Board of Directors of Makina ve Kimya Endüstrisi Kurumu (MKEK) since March 2012.
Over the last 10 years, investments in R&D have boomed in both public and private companies, mainly due to the government’s support for R&D and a massive pile-up of data. In the previous 30 years, Turkish researchers would get trained overseas, whereas now there are over 180 universities spread all over the country. R&D is time-consuming. You need to train the right human resources and keep them up-to-date with recent international experiences and advances in R&D outside the country. Turkey doesn’t boast oil and gas reserves that would speed up the economy, but the country has been extensively investing in human resources over the last 20-30 years, and in education in particular. This has enabled the collection of data to be applied for the further development of the economy. Investment in R&D is not as high as in South Korea or the US, but it is growing year by year. MKEK invests around 2.5% of its annual profit into R&D. Apart from that, R&D is supported financially by the government and a few other organizations. Roughly $100 million has been invested in ongoing R&D projects supported by the Undersecretariat for Defense Industries (SSM), the Ministry of Defense, and the government. It is essential to move forward to meet the forthcoming challenges and keep up with the industry, because the global defense market is narrowing and competition is getting fierce. In a way, it is necessary to become a major global player in the defense and aerospace market to ensure we can provide for the Turkish Armed Forces. R&D is of vital importance for the defense sector.
To secure a leading position in the global market, it is necessary to collaborate with other companies in the sector and cooperate with the government. We work in close collaboration with TÜBİTAK. Some time ago, most of our products were designed overseas and produced under license. But it is no longer possible to rely on this method to set production targets. We have worked hard to expand our R&D budget in the past 10 years. We are open to international partners and are currently working with companies of strong reputation. These partnerships are potentially beneficial to the Turkish defense industry.
If you consider numbers, our main target area is the Gulf region, the Far East, Africa, and Central and South America. Lately, we have started prioritizing the Northern America region, too. Obviously, the defense market in Europe is shrinking and all of our European competitors focus on the Gulf region. Turkey has maintained strong ties with the region throughout history due to cultural connections. This gives us some remarkable advantages over our European competitors in the Gulf region and in the Turkic-speaking countries as well. Moreover, MKEK is a government company. Therefore, we speak on behalf of the government when negotiating contracts. Our Asian and Middle Eastern partners prefer to deal with a reputable and grounded company whose products are not only exported, but also used within the home country. We never export products that are not used in our armed forces.
We are looking to improve our position in North America, and in the US, in particular. For quite a long time, we were not paying enough attention to the US civilian market. The civilian market has been growing parallel to the shrinking of the military market. We must take the advantage of this and take our chances in these circumstances. The quality of our products has been acknowledged, and we are planning to reach $70 million in exports in 2014.
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