Defence Turkey
Bilal Aktaş: In order to Become a Global Player, Need to Change our Point of View
The Undersecretariat for Defence Industries’ Subsystems Department Head Mr. Bilal Aktaş was our guest in this issue. For our readers, Aktaş pointed out the establishment process, vision, tasks and responsibilities, activity areas of the Subsystems Department that was established a few months ago, current status of the Powerpack Development Programme, things to be done in order to become competitive in the global market and plans for the upcoming period.
Defence Turkey: Dear Mr. Aktaş, firstly we would like to thank you for your time. You were appointed as the Department Head of the recently established Subsystems Department at the Undersecretariat for Defence Industries (SSM). Could you inform us on the establishment process, objectives, tasks and responsibilities of the Department of Subsystems?
The nationalisation move of our defence industry has had a prominent impact in our country’s political, military and economic stability and overall achievements of recent years. Turkey has now reached a technological maturity that enables the design and development of its own tanks, missiles, vessels and aircrafts. The robust and competitive integration capability of the main contractors played a major role in reaching this objective.
During the project execution activities, due to the schedule pressure, system and platform development is from time to time prioritised in our project groups rather than the subsystem level design and development activities. Therefore, the systems we refer to as local designs may still be dependent on foreign countries in second and third level subsystem, component and material aspects. The critical point here is that the domestic production of all components within a system should not be expected. Our priority is to naturalise the products that cause troubles during the import or that are subject export restrictions rather than focusing on the production of the items that are easily procured from foreign countries and have affordable unit prices.
For the overall preparation of our country’s industry on a technical level, the development of a series of technologies and subsystems connected to main systems and competence in the aforesaid areas are essential.
Within this context, the Department of Subsystems has been established as a result of the discussions with the units of our Undersecretariat, with the objective to specialise in subsystems and for the purposes of:
Identification of critical subsystems that would serve to multiple platforms or systems and execution of projects that would allow their domestic production,
Conducting the projects for the naturalisation of the subsystems and components that are deemed appropriate for domestic production,
Supporting the cooperation efforts for the domestic production of imported subsystems,
Execution of projects covering the subsystems with no domestic production or depot level maintenance (DLM) or those are difficult to supply,
Conducting the projects covering the mass production of components and subsystems (the R&D studies of which were completed) that would be used either in platforms or within the systems
As the Undersecretariat, with the establishment of this Department, we raised the applications that required the utilisation of sub-industry and SMEs within the scope of the procurement projects to a higher level. We had started to implement such measures in order to strengthen our industry in 2011. We wish to direct the sub-industry’s and SMEs potential arising from the production to the design and product ownership of the subsystems. To this end, in order to guide our industrialists accurately, we will identify the subsystems that have priority to be produced domestically and share them with our industrialists in coordination with the R&D and Technology Management and Industrialisation Departments. Within this respect, we would like to focus as far as possible to the companies known as the sub-industry and assigned as sub-contractors in defence projects.
Defence Turkey: As the Department of Subsystems, you are conducting your activities in two main groups: Electronic and Mechanical Subsystems Project Groups. Could you inform us on the activities and programmes conducted by these two groups?
Projects are approached within the framework of the policies of our Undersecretariat; identified as a result of the coordination made by our Industrialisation Department, Department of R&D and Technology Management with relevant Project departments and then executed. Within this scope, currently the Powerpack Development Package Project of the Altay Project and the Project for the Development of a Turbo Shaft Engine for the Indigenous Helicopter are conducted by our Department. We could also name subsystems such as the landing gear, real-time operation systems that have customers in multiple platforms as our potential projects. Our coordination and assessments within SSM continue regarding other projects to be executed. Particularly, enabling the entry of R&D products, with completed laboratory level prototype production, into ongoing system projects as products will be amongst our priorities.
With the Turbo Shaft Engine Development Project to be conducted by our Department, we aim to develop a turbo shaft and turboprop product family in order to meet the needs of the platforms developed by our local industry. We wish to have a local engine option that may be used in Indigenous Helicopter and in “Atak” Helicopter. Accomplishing the type certification of this engine and then releasing it to the civil market remain amongst our objectives. At the next phases, development of this turbo shaft engine’s various power types and the turboprop engine version is possible.
Defence Turkey: Are there any plans on the inclusion of new project groups to your Department in the future?
Our Department is composed of two groups namely the Electronic Subsystems and Mechanical Subsystems. Currently, we identify and group the subsystems that would serve multiple platforms or systems that are not easily procured. In my opinion, these two groups would be sufficient in the short run. Still, if deemed necessary, the establishment of new groups for the critical subsystems to be determined may be in agenda in the upcoming period.
Defence Turkey: Within the scope of the Powerpack Development Programme, it has been decided to initiate contract negotiations with Tümosan Company. What is the current status of the negotiations? Which type of studies are planned to be conducted on the Project model to be implemented?
Regarding the Powerpack Development Project and in line with Defence Industry Execution Committee’s decree of August 2014, negotiations with Tümosan A.Ş. are still ongoing but we are about to sign the contract. Studies on the content of the foreign technical support to be received within the scope of the Project are continuing. We aim to sign the contract within March (a contract signed with the parties on 17th March) and launch the Project in the first half of 2015. In this project, firstly the development of a powerpack consisting of the engine and transmission for Altay Main Battle Tank and then with the capabilities acquired in this process, development of powerpack that will be necessary for the land and naval platforms in TAF’s inventory and thus reducing the foreign dependency to a minimum are aimed. We intend to bring up the product to the serial production process of Altay tank.
Defence Turkey: We observe that as the Undersecretariat for Defence Industries, you are providing an intense support to the industry on the development and production of subsystems with high added value. Could you mention the responsibilities that fall upon the sector, university and overall governmental institutions for creating the synergy required by the defence industry to have a technological depth and produce value added products?
Presently, we are preparing lists on the required products. Our philosophy here is that we have to manufacture a part of a system. This could be either the landing gear, generator of the air defence system or real-time operation system of the computer. Another criterion here is that the final product emerging as a result of a project finds directly a function in the field. Most of the time, the studies fail to reach the aimed target when the motto is loosely like “we will manufacture the product and present it, then the requesting party will come and use it”. On the contrary, we prefer to know which subsystem we will build and for which purpose and when the subsystem is ready, we will integrate it to the platform.
We aim to cover the subsystems or the components from the domestic industry to the utmost and to this end we will work in close cooperation with the companies and the universities. Our target group is the companies that would work as sub-contractors. Most of these companies are SMEs. Therefore, our industry will have to be eager and ambitious to reach such goals and increase its capabilities and reach the required quality standards. We would especially like to see our SMEs active in high technology fields, in charge of the design and development of the components. Taking the duration of these projects into consideration, the SMEs that would like to take part in defence projects to comprehend the importance of sustainability and patience and this point bears an importance for our sector. Our expectation from the sector is the improvement of their design and R&D aspects. My advice for the production based SMEs that they establish cooperation with the small engineering companies in technoparks. With the help of the professional support, they will be receiving on their way to the final product, both their load of design engineer employment during the serial production will lessen and a sustainable eco-system for the engineering companies at technoparks will be formed.
As for your question on the responsibilities of the governmental institutions; since all the works accomplished in defence industry area have high added-value and high levels of technology, both governmental and social support for the developments in this aspect are quite important and we have that. We need to enable the transformation of this support so that they would result in the required changes in budgets and regulations which would incent the existing and potential investors in the defence industry. Last but not least the non-governmental organisations have great responsibilities in this respect.
Defence Turkey: Can we claim that Turkey extends sufficient support to the sector and the user on the basis of subsystems? How would you elaborate the current status in the big picture?
As I previously mentioned,
currently our national defence industry is mature enough to design and develop its own tanks, missiles, vessels, UAVs and aircrafts. The strong and competitive main contractors’ integration capability in system level played a major role in reaching this point.
In order to extend the defence industry, as the Undersecretariat, we aim establish the supply chain in a pyramidal structure. Within this structure, we attach importance to the execution of system projects under the competence of companies that are placed at the top of this pyramid and bear main contractor qualities as well as the formation of sub-contractors in one-level lower position that develop, manufacture, test and deliver the subsystems of the system under the responsibility of the main contractor. The ones under the sub-contractor companies are the establishments assuming the sub-industry role that provides the parts and components used within the system. Placing this pyramid of industrialisation to a solid ground is directly related with the interactions of all players with the universities and research institutions.
Currently within SSM, many system / subsystem projects are being conducted by the Department of Communications, Electronic and Information Systems (MEBS), Electronic Warfare and Radar Systems Department, R&D and Technology Management Department while the Department of Industrialisation determines the industrialisation policies. In addition to these departments, as a result of the importance attached to the subsystems by SSM and in order to fulfill the tasks that I previously mentioned, the Department of Subsystems was established four months ago. I believe that our diversity and depth regarding the systems/subsystems will be gaining strength and increasing with this brand new organisation.
Defence Turkey: Which areas do you think Turkey should be tending more in order to become more competitive in global markets and active in export markets in respect of subsystems?
Considering our defence and aerospace industry that mainly uses imported raw material and machinery, if we fail to raise the bar from the point of “how to manufacture the top-quality product with minimum cost” to “competitive product owning”, then we will fall into the middle income trap. In order to step up a level without falling into this trap, I believe that the newly-established Department of Subsystems constitutes an opportunity for the sub-industry companies that aim product owning.
Presently, the demands on the naturalisation of a component belonging to a platform or a system that exists or would enter the Turkish Armed Forces (TAF) inventory through SSM projects are being evaluated by our Undersecretariat and the required guidance is being offered. Among these demands, the ones that correspond to the prioritised subsystems identified by our Undersecretariat will be assessed and examined in accordance with the project management methodology by our Department.
Defence Turkey: Considering the subsystems, at which point should Turkey position itself within the global scale during the next era?
Regarding the subsystems, not only the defence industry aspect but also the civil sector dimension should be taken into the consideration and they should be developed and produced accordingly. At the same time, we believe that the domestic subsystems will be in such a scale that they could easily find a place at foreign markets with their price and technology aspects. First of all, if we could generate global players at the level of subsystems used by the land and naval platforms that we consider have no unresolved technical issues, we could manage to extend them to the remaining areas as well. What I wish to underline here is that in order to become a global player, we need to widen our point of view. We envision that establishing partnerships with foreign companies having certified products and markets or buying these companies would constitute an accelerating element in reaching a product and market growth.
The most prominent component in defence systems is technological independence. Owning a design capability in system level is also important but not sufficient. Becoming the designer and producer of subsystems is the next level. One cannot mention independence without dominating the sensors, software, operating systems, chips and materials of these subsystems.
Therefore, in my opinion, within the next ten years increasing our engineering know-how should be our most significant goal. In these projects, we have to increase the quantity and quality of least employed mathematicians physics, chemistry and metallurgical engineers in Turkey. Instead of having our engineering problems solved by foreign companies, we should be able to employ the foreign brains that would fill the gaps of our teams at home. The developed countries melt the brains of various countries in their projects while we struggle to break our shell because of the guidelines remaining from the cold war era.
Turkish people have the potential to reach great achievements within short period of time if guided properly; this is one of our strongest characteristics. The studies for updating and extending our Undersecretariat’s Strategic Plan, that cover the period between 2012-2016 are structured in a way so that it encompasses the period after 2016 to continue. This Strategic Plan is considered as one of the actual driving forces of this guidance.
Defence Turkey: What would you like to say on the incentives and support granted to the companies that choose to specialise in certain areas?
Defence and civil aviation sectors are quite similar sectors in respect of the technologies they employ. Both require high level reliability and challenging certification processes. If we consider merely the defence industry, we come across an area that does not provide continuous quantities of domestic demand and require severely low level of production. Therefore, our companies that aim toward subsystem owning in the defence industry sector have to take into account the civil aviation sector that could increase their market share, get their business processes approved with essential quality certifications and accomplish the process required for the acquisition of the certification of the product they decided to specialise on with patience.
We, as SSM, guarantee that if there is a domestic company manufacturing any of the subsystems that are employed in our projects, we will adopt all the necessary measures in order to include it in the procurement cycle. Moreover, I would like to take this opportunity to remind that our Undersecretariat is offering low interest loan support to the companies (for the procurement of the machinery and equipment they need) that would conduct production through a sub-contractor contract within the scope of the defence projects.
In addition, the cluster formations and technoparks in which the universities, sub-industry and SME companies could operate collectively and universities and main contractors will have the opportunity to extend their know-how and experience to sub-industry and SMEs, especially the Ankara Space and Aviation Specialisation Organised Industrial Zone and Kırıkkale Weapon Organised Industrial Zone are greatly supported by our Undersecretariat. I advise the companies that aim product owning at the subsystem level to make new investments with this purpose or extend their investments to take part in technoparks and Organised Industrial Zones where the sector concentrates.
Defence Turkey: Lastly, would you like to convey a message to Defence Turkey readers?
As the SSM Department of Subsystems, I would like to express our pleasure in sharing our assessments on our activities with the sector and other stakeholders via your magazine. I wish you success.