1. Turkish Defense & Aerospace Industry and Acquisition System
M. Arif SEZGİN, Director of Sectoral Strategies and Investment Planning Undersecretariat for Defence Industries (SSM) – Turkey

2. TURKEY AT A GLANCE 76 Million Population, 25% under age 15
Average 5,6 % growth rate forecastes through 2020
GDP more than tripled since 2002 USD 231 billion to USD 786 billion
16th largest economy in the World, Expected to be among top 10 by 2023.
Sound economic policies, strong financial structure, confident investment environment

3. AGENDA Defense & Aerospace Acquisition System and Players
Industrial Participation & Offsets in Turkish Programs
Turkish Defense & Aerospace Industry Overview
Strategies for the future

4. Defense & Aerospace Acquisition System and Players

5. Ministry of National Defense – Structure
Ministery of National Defence
(MoND)
SSM
Undersecretariat of National Defence2
Undersecretariat for Defence Industries (SSM)1
Responsibilities:
Policy making
Personnel
General procurement2
Logistics
Responsibilities:
Major Systems Procurement
Industry Policy Making
Localization
R&D
International industrial relations
1 The Undersecretariat for Defence Industries (UDI) is also referred to as “SSM” in Turkish
2 Procurement of off-the-shelf requirements of the MoND and the Turkish Armed Forces

6. Other Players – Government, Commercial Aerospace and Air Transportation
GOVERNMENT REGULATORY INSTUTIONS – (MINISTRY OF MARITIME AFFAIRS, TRANSPORT AND COMMUNICATION)
Directorate General of Aeronautics and Space Technologies (Regional Aircraft Program) (R&D Funding)
Directorate General of Civil Aviation (Local Airwothiness Certification Authority)
DHMI (State Airports Authority – Airports Management and Infrastructure Investments*
PRIVATE; AIR CARRIERS and AIRPORT CONSTRUCTORS & OPERATORS
Turkish Airlines / Cargo – Anadolu Jet -- (Turkish Technic – MRO)
Pegasus, AtlasJet, Onurair, Corendon, Sunexpress ...
(*)Private Contractors of DHMI above

7. SSM – Legal Framework Decision Funding Law No. 3238
Defence Industry Executive Committee
(Decision-Maker)
Prime Minister
Chief of General Staff
Defence Minister
Decision
Law No. 3238
Governmental Decree / 15108
Public Procurement Law (exempted by its Article 3.b)
Undersecretariat for Defence Industries
Legal Entity
Private Budget
Funding
Defence Industry Support Fund
(Source)
Continuous Financial Source
Off-Budget 7

8. SSM; MAIN ACQUISITION BODY FOR DEFENSE SYSTEM NEEDS
Committed to make Turkey superior in defense technologies
Major Systems Acquisition
R & D and Technology Management
Industry Policy Making
IP/Offsets
Localization
Credits and Investment Financing
Clustering Activities
International Industrial Cooperation
Quality, Test and Certification
# of Programs Ongoing : 310
# of Programs Contracted : 180
$ Value of the Contracts : 25.3 Billion .

9. SSM, KEY TOOLS AND STRATEGY
The Main Platform Procurement
Quality Test and Certification
Incentives and Credits / Off-Set
Export / International Cooperation
Industry and Technology Development
Industrial Participation in Acquisition Programs
Offsets (Export / Technological Cooperation)
R & D Programs
Musts and Incentives to Use SMEs
Financial Support (Credits for Investment)
A Portal for Products and Capabilities
Supports Clustering Organizations

10. SSM; Procurement Model Priorities
1. Local Development
Indigenous design and development of priority systems
Enrichment of the product portfolio and international market share
2. International Consortium
Participation in joint development programs when domestic development is not considered cost-effective
Design / development of risk partnership potential
3. Co-Development/Co-Production
Active participation of domestic industry
Production under license
Joint production-Joint-Marketing / Opportunities for local industries
4. Direct Procurement
Only if above options are not feasible

11. SSM; Program Models Distribution

12. Industrial Participation & Offsets in Turkish Programs

13. IP/O & OFFSET AND PERFORMANCE CATEGORIES
Industrial Participation and Offset Definition: Commitments of the suppliers to customer in terms of performing local activities –local content, exports and technology transfer- in specific areas and signing parallel agreements, with this purpose, to main procurement agreements.
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

14. USD 8,44 Billion USD 9,13 Billion
ACCRUED AND REALIZED OFFSETS
Total Accrued Offset Commitment : USD 17,57 Billion
USD 8,44 Billion
USD 9,13 Billion
( )
( )
Realized Exports: USD 5,9 Billion

15. AEROSPACE OFFSET COMMITMENT
Aeorospace Offset Commitment ( )
2,3 Billion

16. Turkish Defense Industry

17. Defence Industry Infrastructure – Companies
MILITARY FACTORIES
STATE OWNED
PRIVATE MAINS*
PRIVATE COMPANIES
JOINT VENTURES
AIR PLATFORMS
ESKİŞEHİR 1. HİBM
KAYSERİ 2 HİBM
TUSAŞ
BAYKAR MAKİNA;
BÜYÜKMIHÇI;
KALEKALIP; GLOBAL TEKNİK
TEI;
ALP AVIATION
LAND PLATFORMS
ARİFİYE, TUZLA & KAYSERİ FACTORIES
MKEK
OTOKAR; BMC;
HEMA; NUROL; KOLUMAN
FNSS;
MTU-TR
NAVAL PLATFORMS
GÖLCÜK, İSTANBUL, İZMİR SHIPYARDS
TURKISH NAVAL SEC.
YONCA-ONUK; RMK; ADİK;
DEARSAN; ARES YACHT;
ATLAS-MAVİ; MEGE TEKNOLOJİ, ADİK
N/A
ELECTRONICS /
SOFTWARE
ANKARA 3. HİBM
KKK 4. MAINTENANCE CENTERS
TÜBİTAK UEKAE;
TÜBİTAK MAM
ASELSAN;
HAVELSAN;
GATE; MİLSOFT; SAVRONİK; SDT; VESTEL SAVUNMA; KOÇ SAV; METEKSAN SAVUNMA; C2TECH;
KALETRON; ANTENSAN;
YÜKSEK TEKNOLOJİ; AKSA TEKNOLOJİ; ELEKTROLAND; YÜKSEL SAVUNMA; HTR;
EHSİM, STM; MİKES;
AYESAŞ;
SELEX;
NETAŞ;
SIEMENS;
ESDAŞ;
YALTES
ROCKETS-MISSILES-AMMUNITION
KKK 3. MAINTENANCE CENTER
KAYSERİ 2. HİBM
MKEK;
TÜBİTAK SAGE
ROKETSAN;
BARIŞ; KALEKALIP; TİSAŞ;
GİRSAN; SARSILMAZTAPASAN;
STOEGER
LOGISTICS
MILITARY CLOTHING FACTORIES
YAKUPOĞLU; ÖZTİRYAKİLER;
TARGET; ÖZTEK; TEKSAV; ANEL; MEGETEKNİK ASPİLSAN

18. SECTOR TURNOVER
AEROSPACE
OTHER

19. DEFENSE AND AEROSPACE EXPORTS AND TUSAŞ SHARE (IFRS)

20. AEROSPACE – PRODUCTS & PROGRAMS
Platform
Product
Status
Highlights
UAV
Operational
First Turkish MALE UAV
TAI design
Satellite
First Turkish designed satellite
Technological partner
Attack/Tactical Reconnaissance Helicopter
Joint design and development
International marketing collaboration
Trainer aircraft
Serial production orders
First Turkish Basic Trainer Aircraft
To be certified according to EASA standards
Utility helicopter for civil & military usage
Contract signed in June 2013
First Turkish design helicopter
To be certified under EASA and military requirements
Trainer / fighter aircraft
Conceptual design completed
Initial study for Turkish Trainer/Fighter Aircraft
To be designed by TAI to replace F-16 aircraft
Anka
Hürkuş
TX/FX
Indigenous helicopter
ATAK
Göktürk 2

21. AEROSPACE – PRODUCTS & PROGRAMS
ANKA – Unmanned Air Vehicle
HÜRKUŞ – Basic Trainer Aircraft
ATAK – Atack/Tactical Reconnaissance Helicopter
MALE-type UAV for reconnaissance & surveillance
Serial production contract for 10 units signed in [Oct. 2013]
Discussions with several countries
First in its class with both civil and military certification
Strong wing structure enabling different payloads
EASA certification expected in 2015
Exec. Committee decision for ordering 15 units plus 40 options taken in Oct. 2013
Optimized for firepower, payload and better economics (fuel burn and maintenance)
Joint development, international marketing rights
Interest from a number of countries

22. AEROSPACE – PRODUCTS & PROGRAMS
Light Utility Helicopter
Turkish Utility Helicopter T-70
Development of an indigenous helicopter of approx. 5 ton MTOW for national and international requirements
Civil and military certification
Development funded by SSM
Turkish version of S-70 Black Hawk International
TAI expected to manufacture and deliver first batch of 109 units to seven different end users1 in Turkey
Strong export potential especially given worldwide popularity of Sikorsky’s base model
TX/FX
Regional Jet
Development of an indigenous fighter for national/international requirements to replace current F-16 aircraft in the inventory
Program to be finalised in several stages.
Conceptual design phase completed 3rd quarter 2013
Development of a regional aircraft for international market
Modification of an already existing design is also considered
TAI to act as a prime contractor for design/development and manufacturing

23. AEROSPACE – PRODUCTS & PROGRAMS
TAI Satellite portfolio
Göktürk – 1 Project
Earth Observation Satellite & Ground Segment
Design workshare in project
Assembly & testing centre and integration
Göktürk – 2 Project
Earth Observation Satellite & Ground Segment (TAI design)
Joint development with Tübitak
Göktürk I
Göktürk II
Capabilities
In-house capability for satellite and sub-system design and testing
Experienced and skilled work force

24. Strategies for the future

25. STRATEGIC PLAN 2012-2016 FOCUS 2012-2016 2007-2011
Sustainability of the Defence Industrial Base
Reaching Excellence in Programme Management
Developing Technological Competence
Acquisition Management
Industry Management
International Cooperation

26. INDUSTRIAL CAPABILITIES AND FOCUS
Focused sector strategies to develop indigenous capabilities
Land: Armoured wheeled military land vehicles.
Naval: Naval shipbuilding capabilities: goal of design and system integration work relating to naval ships domestically
Aerospace & C4ISR: Enhancing competencies
Domestic capabilities (design & production of aerospace components and services, modernisation), new indigenous programmes
Experience in major international programmes (ie JSF, A400M, Boeing 787)

27. NEW FRONTIERS: 2015 AND BEYOND...
Advanced Jet Trainer
F-X New Generation Fighter
Medium Class Utility Helicopter
UAV Programs (Strategic Combat Rotary-Wing)
Indigenious Mission Computer for Fighters
Cyber Security
Satellite Systems
Electronic Warfare
NEW FRONTIERS: 2015 AND BEYOND...

28. SSM’S VISION FOR DEFENCE INDUSTRY
Capable, competitive and sustainable industry
Integration to the global industry
Effective supply chain with technology-intense SMEs
Indigenious solutions for domestic military requirements in strategic areas

29. SSM’s International Cooperation Offices
WASHINGTON DC OFFICE
June 2011
BRUSSELS OFFICE
January 2012
AZERBAIJANI OFFICE
2012
INDONESIA OFFICE 2012
UAE OFFICE
2012
RIYADH OFFICE
March 2011
LATIN AMERICA OFFICE
2013

30. COOPERATION WITH TURKISH INDUSTRY
Convenient Investment Environment
Incentives and exemptions (SSM and Others)
Intensive Government (SSM) Supervision for Enterpreneurs
Low cost land, promising quality and cost effective laborship
A new export hub
Potential Models
Project & Program Partnership
JV’s

31. Thank You
M. Arif SEZGİN