Muharrem Dörtkaşlı, CEO, Turkish Aerospace Industries: Interview

Muharrem Dörtka şlı, CEO, Turkish Aerospace Industries

Interview: Muharrem Dörtkaşlı

What is the strategic importance of developing the Turkish aerospace and defence industries?

MUHARREM DÖRTKAŞLI: The aerospace and defence industry promotes the development of different segments of the economy such as aeronautics, software, sensor systems and information technologies, as well as the country’s industrial base. Between 2006 and 2014, the annual revenue of Turkey’s aerospace and defence industry increased by 220%, and exports rose by 240%. By 2014 the industry’s revenues reached $5.5bn, with exports of $1.65bn. From its beginning 30 years ago, the industry continues to grow as more finances are allocated to research and development (R&D) activities, driving greater innovations in products and technologies.

To meet the future needs of the Turkish Armed Forces, the industry is working on the next generation of fighter aircraft, light utility helicopters (LUH) and unmanned air vehicle (UAV) systems. These projects offer an opportunity to collaborate in technical fields with allied nations. Other projects involving tanks, frigates and air defence systems provide similar opportunities for joint working. Technologies developed as part of these military programmes also help drive future commercial developments, with the LUH and regional airliner programmes two key examples. Further, the Ministry of Transportation, Maritime Affairs and Communications is encouraging the aerospace industry to build a national regional passenger aircraft by 2023.

In what way is the government working to increase R&D spending in the sector?

DÖRTKAŞLI: For industries to achieve long-term sustainability and stay competitive globally, they must invest in R&D activities to produce new technologies and processes. However, individual businesses, especially those in competitive and high-tech fields, require government support. Similarly, universities and small and medium-sized enterprises need to be encouraged by state incentives to participate. With this in mind, the government and the domestic aerospace and defence industry are taking a number of different steps. Individual businesses, for example, have invested in technology development zones such as the Middle East Technical University Technopolis. Not only do the businesses benefit from physical proximity to university research centres, but universities are also exposed to a business-oriented approach. The government is continuing to help incentivise such investments.

Government development programmes are also important drivers of innovation, with individual companies taking on the technical and financial risks, as well as being able to operate as an original equipment manufacturer (OEM) if they are successful. Products developed this way include the UAV platform and advanced trainer aircrafts. The same approach was taken for the LUH development programme and we expect the fighter/trainer aircraft development programme to follow the same model. In addition, EU R&D programmes such as Horizon 2020, the Clean Sky Joint Technology Initiative, the Single European Sky ATM Research Joint Undertaking and the Seventh Framework Programme are also key initiatives taking place.

To what extent are Turkish aerospace and defence products in demand at a global level?

DÖRTKAŞLI: Over the past decade there has been a steady rise in international demand for Turkish-produced defence solutions. Between 2005 and 2014 the compound annual growth rate (CAGR) of total exports was 8.8%, and the CAGR for defence exports was 19.3%. In 2014 Turkey’s total export volume was $157.6bn, with $1.65bn in defence and aerospace. Most interest is currently concentrated in the Middle East, North Africa and Asia, though sub-Saharan Africa and South America are expected to play a key role going forward. Western OEMs comprise a share of the market for Turkish component and sub-system manufacturing. The government has assisted private companies in helping to develop these relationships and is focused on further strengthening the sector’s global export market.

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The Report: Turkey 2015

Industry & Retail chapter from The Report: Turkey 2015

The Report: Turkey 2015

The Report

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