As exports continue to increase, the defense industry is looking for ways to diversify and broaden its already impressive portfolio.

Hüseyin Baysak
Latif Aral Aliş

Which regions or countries have high potential for Turkish defense products over the short and medium term, and what is the main strategy for the sector?

HÜSEYİN BAYSAK The Undersecreteriat for Defense Industries (SSM) defined a new strategy for the development of the Turkish defense and aerospace (TU D&A) industry starting in early 2000. Within the scope of this strategy, the SSM gave priority to indigenous development programs and the acquisition of defense goods from local suppliers. The strategy opened a new era for the TU D&A industry. With the SSM's support, it started building a skilled engineering department and creating a capable design team to develop indigenous platforms and systems with design, development, and testing activities. After extensive engineering work, these teams have started the delivery of their indigenous products to the inventory of the Turkish Armed Forces. Having more national products means more exports, and each year the TU D&A industry increases its exports. In 2013, the sector exported close to $1.5 billion, with gross sales of $5 billion. Expenditure for R&D in 2013 was around $900 million, and more than $230 million of this is the company's own money. The Turkish aerospace industry is now active in civil aviation, and it is on the way to becoming a proven supplier for aircraft manufacturers. Total civil aviation sales have reached $600 million in 2013. The Turkish defense industry is also active in homeland security and cyber security.

LATİF ARAL ALİŞ The Turkish defense industry is growing each and every day. The export figure of $800 million in 2008 reached $1.4 billion in 2013, and our expectation for 2014 is $2 billion. At SSI, our primary target is to increase our market share and become one of the global actors of the sector. Currently, our sectoral exports focus mainly on the US, the EU, and the Middle East. In addition to our current markets, we have set many different areas as our target, mainly the Far East and Southeast Asian countries in the short term. Defense industry projects require high levels of technology and serious investment. In this aspect, the defense industry contributes both to employment and Turkey's technological development. It is a sector with high export potential through its high value-added products. Our export performance will increase further, as it has in the past. By commissioning our UAV ANKA, our ATAK strike helicopter, our Altay battle tank, and our Hürkuş training plane, as well as many other projects, the share of the defense industry in the Turkish economy will climb higher.

What is your general outlook on the future of Turkey's defense and aerospace sector, and what are the current trends in the sector?

HB After the 2008 global crisis, many Western countries made radical cuts to their defense budgets. World defense expenditure has flattened and become uneven. The US and EU defense industries are studying the case very hard and are trying to find a solution for their survivability and competitiveness. Emerging markets are targets for all defense industries, and companies that want to be active in the emerging markets are going to find the competition very tough.

LAA The defense industry is one of the strategic sectors with growth potential for Turkey. Especially in the 2000s, significant progress was achieved in some major projects. Turkish companies undertook important roles in international projects, such as the cargo aircraft of the future A400M and the joint strike aircraft JSF-35. Furthermore, with the determination of a policy for original production, significant progress was achieved in original product design and production. Now, Turkey designs and produces its own UAV, rifle, rocket system, tank, training aircraft, warships, satellites, and software.