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Opportunities in Turkish Aerospace and Defense Markets
Ozge Eksi, Aerospace and Defense Business LeaderMay, 2015
U.S. Commercial Service | Ankara, Turkey
1U.S. Department of Commerce | International Trade Administration
Defense SnapshotEvolution in Defense Procurement and Increasing
Civilian Direction
ProcurementEarly Years
Co-Production1990’s
Development Last Decade
Multiple Rocket LauncherAttack HelicopterCoast Guard Boat
General Purpose Helicopter Light Transport AircraftArmoured Combat VehicleMobile Radar ComplexesHF SSB Radios
Pedestal Mounted StingerTank Fire Control SystemsNational Combat ShipElectronic Warfare
Turkish Defense Industry - TODAY•State owned Companies
•Military Factories•TAF Foundation Companies
•Private Companies
•Joint Ventures
Design and Production of•Land Combat Systems•Defense Electronics •Military Software & Simulation•Weapon & Ammunition•Missile And Rockets •Aviation •Naval Systems•Logistics
More than 80 Members
U.S. Department of Commerce | International Trade Administration2
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Best Guaranteed
Procurement Model Priorities
1. Local DevelopmentIndigenous design and development of priority systemsEnrichment of the product portfolio and international market share
2. International ConsortiumParticipation in joint development programs when domestic development is not considered cost-effectiveDesign / development of risk partnership potential
3. Co-Development/Co-ProductionActive participation of domestic industry Production under licenseJoint production-Joint-Marketing / Opportunities for local industries
4. Direct ProcurementOnly if above options are not feasible
U.S. Department of Commerce | International Trade Administration 3
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Best Guaranteed
2 PRIORITIES
6 CONTRACT
SSMRFI/RFP Tender Evaluation
Executive CommitteeProgram Starts
Executive CommitteeDecision
IndustryDevelopment &
Production
3 MODEL
4 APPROVAL
5 AWARDS7 PROJECT PHASE
1 REQUIREMENTS
Turkish General StaffPrioritization & 10 Year Procurement Plan
SSMFeasibility Analysis & Program Model
SSM Main Contract
8 DELIVERY
End-User(Land, Naval and Air Forces)
Availability Request
Life Cycle of Turkish Defense Procurement
U.S. Department of Commerce | International Trade Administration
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Program Models
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IP/O & OFFSET CATEGORIES
Category A • Direct Industrial Participation
Category B • Export of products / services in the areas of defence, aerospace and homeland security
Category C • Gain technology / capability• New investment in the areas of defence, aerospace
and homeland security
IP/O & OFFSET REQUIREMENTS
• Related directive revised in 2011• IP/O liability rate increased to 70% of contract
price• Emphasis given to SME workshare ( 30% of
category A – Industry Participation)• Aims to reach industrial depth • 55/60% domestic participation rate at present• A paradigm shift with new SSM administration
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CURRENT OUTLOOK OF TURKISH DEFENSE INDUSTRY
• Increased emphasis on R&D, innovative technologies, indigenous solutions
• Aggresive export targets, results driven• Total exports: $ 1.65 billion in 2014, $ 2 billion
expected in 2015• $ 8 billion overall turnover by 2016• 50% to 60% domestic participation according
to U/S Demir
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CURRENT OUTLOOK OF TURKISH DEFENSE INDUSTRY
• Increased local content requirements and offset obligations• Participation through Turkish primes • Increased business opportunities for U.S. SMEs• Modernization of the Turkish Armed Forces: Within the
following 25 year period combat weapons and equipment will need to be replaced or modernized
• Reduction in military spending due to EU accession • Advancement of national industrial capabilities
– R&D emphasis– Joint production and technological cooperation vs. FMS
and off the shelf procurement
CORE COMPETENCIES / MAIN PLATFORMS
• Air Platforms : UAVs (MALE, Mini, Tactical), Rotary Wing Platforms (Attack, Utility), Transport Aircraft (A400 M), Trainer (Hürkuş), Fighter (F16 / F35)
• Naval Platforms: National Corvette (Milgem), Coast Guard Boats, Combat Management System (GENESIS), Tactical Platforms
• Land Platforms: Tank modernisation, national tank (Altay), Tactical Vehicles, Trucks
• Arms and Ammunition : Cirit (2.77 inch laser guided) SOMJ ( Stand off missile), penetrating bomb (MKEK)
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ONGOING / FUTURE PROJECTS
• New Generation Fighter Jet (FX)• Regional Aircraft• Light Utility Helicopter• General Purpose Medium Class Helicopter• Armed UAVs• Indigenous Mission Computer for Fighters• Cyber Security • E-warfare• Satellites
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BEST PROSPECTS
• Wide range of parts and components for all platforms
• Cybersecurity • E- warfare• International Cooperation Projects (i.e. JSF) • 3rd country cooperation • Joint Development
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QUICK HINTS
• Step 1: Learn your market well - Identify Competitors• Understand Local Capabilities / Find your
match • Cooperate with Capable Partners
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QUICK HINTS CONT’D
• Step 2: Come up with a sound business plan• Consider local content requirements• Develop a realistic project timeline• Consider cost requirements• Be ready to negotiate until contract signature• Consider 3rd country opportunities - Agents / reps can be of assistance
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QUICK HINTS CONT’D
• Step 3: Show Commitment - Follow up with the stakeholders• Show commitment to the market• Be ready to collaborate and share technology
know-how• Pay regular visits • Be patient
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