TBY talks to Nail Kurt, General Manager & CEO of FNSS Defense Systems Inc, on export targets, indigenous projects, and agreements with foreign defense procurers.

Nail Kurt
Nail Kurt was born in 1962 and graduated from Middle East Technical University in 1984. He began working at Nurol Holding’s Defense Division in 1987, and joined FNSS Defense Systems in 1991. As well as now being the CEO of the company, he is also the Deputy Chairman of the Turkish Defense Industries Exporters Association, Chairman of the Turkish Chapter of the Turkish-Malaysian Business Council at DEİK (the Foreign Economic Relations Board of the Turkish Union of Chambers and Commodity Exchanges [TOBB]), and also a Board Member of Turkey’s Defense and Aerospace Industry Manufacturers’ Association (SaSaD).

The Turkish defense sector recently surpassed $1 billion in exports, with an estimated annual figure of $1.4 billion. How much of that belongs to FNSS?

Our annual exports were around $100 million in 2012, and will also be at that level for 2013. According to official Turkish records, exports merely take into account all goods exported out of Turkey, which fails to account for services provided and businesses run beyond Turkey that generate revenues returning to Turkey. Thus, while discounted, the figure of $100 million-$120 million refers to everything including those services and businesses. If you were to calculate the physical goods exported alone, it would account for about $70 million to $90 million a year. Over the coming years, and as of 2015, we plan to reach the $200 million-$250 million range. Two contracts we have on hand—one with Malaysia, and the other with Saudi Arabia—in addition to another large contract we plan to sign at the end of the year, will take us to the $250 million figure.

Does your partnership with BAE Systems help with your global export reach?

FNSS' partners, such as BAE Systems or Nurol, have always left FNSS free to conduct its own internal operations and exports, and we have been able to remain independent of both. Of course, there are areas where we seek assistance, and we receive this assistance when needed. BAE Systems is a relatively new partner compared to Nurol, and has experienced impressive growth over the past 10 years, mainly through acquisitions. It took the company a while to notice FNSS' achievements, but now that our value is recognized, in many ways they see us as an example of successful market penetration, not only in Turkey, but in other parts of the world, too. This is a good example of a healthy partnership. We are also looking at other areas of cooperation with BAE Systems and Nurol, apart from land systems. Both partners are looking for new venture possibilities, and we should have a solid project within a few years.

Your last two indigenous projects include the armored amphibious bridge and the armored dozer. Are there any other indigenous projects you're working on now?

Yes. Those were very niche products required by the Turkish army, so we took the responsibility and produced these products for it. But we're also working on more widely used products, such as a tracked weapon-carrier system project that should be finalized next year. There is also a study on future Turkish amphibious combat vehicle (ACV) requirements, and we are working on a new generation of ACVs. We are also working on our Pars family of wheeled vehicles. We're developing the AV8 for Malaysia, and have also had a couple of opportunities in the Middle East, where we'll be developing the Pars range, probably with the new generation. The vehicle will see a constant evolution, which is how it is in this industry, where you design and develop something over the next decade, and then as soon as it is released you start working on the next generation versions and models of that product. Technology develops very fast in this sector, particularly on the electronics front, and there are many systems that need to be incorporated into the vehicle, which takes a lot of systems integration and design work.

You have finalized an agreement with Indonesian company Pindad to produce its new medium tank. What are your expectations from this partnership?

In May 2013, there was an agreement between the Turkish and Indonesian ministries of defense. We thought government involvement and support from both ministries would facilitate the development of the program, and we limited ourselves to the design and development of the medium tank at this stage, rather than serial production. It will probably take another two to three years to develop the product.