“We have become Turkey’s single largest subsystem supplier in the field of land vehicles.”
Having supplied its various subsystems to many of the land vehicles that the Turkish defence sector has rolled out in recent times, Nero Industries has started to take bold steps in the field of exports as well. The company has concluded the year with great success, thanks to the domestic and foreign sales it notched up and has started to reap the rewards of its investments on Standart Test, which has been the company’s focus. We had the opportunity to discuss the company’s on-going projects as well as its new investments and products with Alican Ökçün, Chairman of the Board at Nero Industries, and Öznur Ökçün, General Manager of Standart Test.
MSI TDR: Mr. Ökçün, could you please share your thoughts about Nero Industries’ position within the Turkish defence and aerospace?
Alican ÖKÇÜN: We can assess the company’s position from many different angles, but they all lead to the same conclusion. For example, looking at our turnover, we see that Nero Industries accomplished a turnover of ₺150 million last year. Looking at the production figures, we have produced more than 6,000 subsystems in total throughout 2018. And looking from the exports front, we made direct exports to 18 countries in total. And we see that, in terms of employees, we have reached 200. Hence, the answer to your question is that we have become Turkey’s single largest subsystem supplier in the field of land vehicles. I should add that the Presidency of Defence Industries’ (SSB’s) indigenization policies have had a considerable effect on this success.
MSI TDR: To what do you owe this rapid growth?
Alican ÖKÇÜN: This growth is actually a consistent uptrend that has been taking place for some time. We owe this particularly to the products we have rolled out under the names of ARES, ARMA, and MARS. Among these, ARES which is related to Fire Extingushing and Explosion Suppression Systems has become our flagship, turning into a product family that is the author of its own success story. Presently, we are one of three companies across the world producing these types of systems. In parallel with these developments, we have also produced ARMA Power System Solutions and MARS CBRN Filtration and Detection Systems. Thanks to these constantly developing products, we have taken part in 210 different projects since our founding, 60 of which have taken place overseas.
MSI TDR: In which direction is this rapid growth moving? Do you have a road map for what comes next?
Alican ÖKÇÜN: We utilise the gains we make to reinvest in this sector. For example, there is a 60,000-square metre new facility, we are in the process of establishing in Sakarya. This plant will not only support our production activities, but it will also bring new technologies that were hitherto absent in Turkey. In parallel with these investments, we have completed our new factory in Ankara. Standart Test has also started its activities as a company which, despite being established under the same group as Nero Industry, remains completely independent from it, and its related investments are still in progress. Furthermore, we are also opening new facilities in the United States and Bulgaria to support our export projects.
MSI TDR: We will get back to the subject of R&D and exports; however, let’s first talk about your products, ARES, ARMA, and MARS. Starting with the ARES explosion detection and fire suppression systems, what are the features of this product that make it stand out compared with its rivals?
Alican ÖKÇÜN: As the name implies, ARES system is designed to protect vehicles against explosions and fires. This product is found in many vehicles of the Turkish Armed Forces (TAF) and Ministry of Interior and has recently shown great success in fending off attacks with RPG type weapons and protecting at the crew, engine, tyre and body compartment of vehicle, especially during the Olive Branch and Euphrates Shield operations. The system operates on a principle of quickly detecting fire or explosion at the crew, engine, body and tyre compartment of the vehicle, and then activating the fire extinguisher cylinders. At this point, to avoid any misunderstanding, I should add that the fire extinguisher material in these cylinders does not damage human health. ARES fire suppression systems detect an explosion in less than three milliseconds and activate the fire extinguishers within five milliseconds, and suppress the entire explosion under 250 milliseconds. Compared with equivalent systems around the world, our product stands out as the explosion suppression system with the fastest detection rate. This is important, in that RPG ammunition starts forming a fireball inside the vehicle the moment it pierces the vehicle’s armour. This fireball expands from the size of a golf ball in the first millisecond, and to the size of a football by the fourth millisecond. And by the eighth millisecond, it becomes too large to be extinguished. Moreover, it is also important that the system makes the right decision every time. Owing to its STANAG 4317-compatible sensors and MIL PRF 62546C-compatible sensors, ARES can distinguish a lit cigarette or the light that suddenly floods the dark interior of the vehicle when its door is opened, from a real explosion. These two features further boost confidence in our systems. Thanks to its success, the number of vehicles currently using ARES solutions has reached 2,500.
MSI TDR: What kind of feedback are you getting from the users of ARES systems?
Alican ÖKÇÜN: We know that the systems we deliver are serving successfully on the field. Users send us the empty fire extinguisher tubes, following use, asking us to fill them again. Nowadays, they can meet these types of requirements with the fire extinguisher cylinder filling line that we provided to the Turkish Armed Forces (TAF). Using our decade of experience and the knowledge we’ve gained, and by looking after our nation’s interests, we have established a n infrastructure at the Directorate of the 43rd Maintenance Factory in Çorlu for the filling of cylinders and transferred this to the armed forces. With this extinguisher cylinder automatic filling line, our army has gained a more efficient and lower risk production capability, transitioning to a high-technology infrastructure in which the products it produces can be tracked through a system.
In the meantime, we are continuing to receive new purchase orders from procurement authorities.
In fact, even the continuing orders are, by themselves, a vital feedback, as well as a source of pride for us. Moreover, we are hearing from various sources that soldiers, in particular, have greater confidence getting into vehicles equipped with ARES systems.
We Aspire to Integrate ARES Fire Suppression Systems to ACVs at No Cost
MSI TDR: Are there new projects in Turkey that you are keeping track of for this product family?
Alican ÖKÇÜN: The Ministry of National Defence (MND) is considering the launch of a modernisation project for the Armoured Combat Vehicles (ACVs) in the Land Forces Command’s inventory. The project budget has not yet been determined; however, these vehicles are actively used in operations, and Turkish soldiers literally entrust their lives to them. So here is what we proposed to The MND: As Nero Industries, we can install our ARES systems to the ACVs at no cost. We can sort out the financial aspects later on, once the project budget is drafted. And even if the project does not get going, we would be pleased with having assisted our state. For, in the end, the contributions of our state have played a very important role in making Nero Industries what it is today. So we would like an opportunity to repay some of our debt to the state.
MSI TDR: Could you tell us about the development of your ARMA power system solutions?
Alican ÖKÇÜN: This product family, which we first started to develop in 2011, was initially conceived as a standard generator, but eventually became much more than that. The tools we have integrated on top of it, and the function of these tools, have practically turned ARMA systems into emergency back-ups. Presently, these systems are used on the field as devices that can operate under any conditions, and enable vehicles to execute their mission. We compare this product to a flashlight. You need a flashlight when there is a power outage; and if the flashlight happens not to work when the outage happens, then it’s as good as useless. To overcome this type of problem, our systems harbour many redundant or alternative methods of operation. For example, one of the problems soldiers most often encounter on the field is the emptying of the batteries belonging to the generator that supplies energy to the missile launcher system positioned on top of the vehicle, due to cold night temperatures. When the battery is empty, the generator will not function; and if the generator will not function, the missile will not fire. Against these types of eventualities, we have developed a system that allows the crew to start the generator by using the vehicle’s batteries, all with the press of a single button. And against the risk of a malfunction in the electronic brain of the generator, we also added a manual operation feature to the device. We make sure to add such additional features to the technical specifications of every contract we sign. But this is not something manufacturers normally prefer, due to the additional burdens it brings.
MSI TDR: How many units of ARMA product family have you delivered until now?
Alican ÖKÇÜN: If we take into account all members of ARMA family, I can say that we have delivered about 2,500 different products, both domestically and abroad.
MSI TDR: What features make this product family stand out?
Alican ÖKÇÜN: Many companies in Turkey can produce a generator by connecting a standard alternator to a standard diesel engine. However, as I have said earlier, we’ve thought about military requirements in particular, and developed systems that can power an armed platform when necessary. Since 2011, we have come up with a far more compact structure for our product. In this process, we have managed to reduce the total dimensions, weights, and costs of ARMA power systems by nearly three-quarters. Following extensive R&D investigations, we have, for instance, reduced the cable length inside the power distribution unit from 8 km to 2.5 km, and this has directly affected the volume, weight, and cost. In addition, thanks to the countless sensors we have added to our sensors, the user can immediately detect the slightest problem on the system before it turns into a malfunction. Furthermore, with the Power Take Off (PTO) alternators that we have designed for the first time, we have recently taken ARMA product family’s ability to function under all conditions a step further.
MSI TDR: Could you please give us more details about the PTO alternator?
Alican ÖKÇÜN: This system was in fact developed against the possibility of ARMA systems not functioning due to the battery discharges that I mentioned earlier. Weighing approximately 50 kg, these alternators are connected to the PTO outlet of the vehicle’s transmission, thus providing a very simple generator alternative of our own making. Just like a generator, this alternator also produces 220 volts of electricity. When necessary, the user can shift the vehicle to the PTO gear and start the vehicle’s engine to activate the system. The system conforms to IP65 standards, and also meets military requirements in terms of durability.
As I have said earlier, this system was initially developed to feed the battery of generators by starting the engine of vehicles, in cases the batteries of the generator discharge due to cold weather. However, the PTO alternator generated more interest than we had anticipated, such that this product we have only recently developed is now used on the field in about 150 vehicles. Based on the feedback we get from the field, we learned that, from time to time, the vehicle crew supplied all of the systems on the vehicle through the PTO alternator, without feeling the need to activate the generator.
MSI TDR: Are you conducting studies to further improve the alternators you use for generators?
Alican ÖKÇÜN: We purchase the finished alternators and then spend a considerable amount of time converting them in accordance with our own requirements. We try to get these products from the best manufacturers in the world; however, in our hearts, we would prefer to purchase them from domestic manufacturers. But unfortunately, alternators in Turkey are still produced according to the “manual-wiring” method and are too heavy for our needs. Opting for these products would prevent us from fulfilling our own contractual obligations. However, our doors remain wide open to the possibility of cooperating with any domestic company that can develop alternators that match the appropriate standards. Once the alternator-manufacturing companies in Turkey become capable of producing the alternators we need, we give our word that we will purchase their products instead.
MSI TDR: What can you tell us about MARS CBRN filtration and detection systems?
Alican ÖKÇÜN: MARS product family, which we have developed for land vehicles, is available with the overpressure type and mask type systems. As is the case with our other products, we have designed the MARS system with an emphasis on reliability. This product might only have to be used once throughout its lifespan; however, not fulfilling its task that one time could result in the loss of the crew. That is why everything within MARS systems is based on redundancy. For example, the pressure sensors, flow sensors, and chemical sensors are all found in MARS systems in duplicates. The system was also designed to warn the crew, in case of unexpected situations. By the way, I am not only speaking about chemical attacks here. For example, in situations such as when the filters are not properly fitted, when one of the doors of the vehicle stays open, or when high pressure is not maintained inside the vehicle, the product gives a different type of warning signal. Thanks to its self-testing feature, the device constantly tests itself and informs the user. The user knows that he/she can depend on the system as long as there it gives a green light. We have designed all of these to function automatically. However, as within our other systems, we have also included a mechanical on and off switch for the system, just in case. Even if the entire electrical system of the vehicle collapses for any reason, the vehicle crew can still activate MARS system through a direct line connected to the battery. In Turkey, this product is actively used in about 500 vehicles.
MSI TDR: Did you conduct a specific indigenisation effort for this product?
Alican ÖKÇÜN: For MARS product family, we have specifically started to produce our own chemical gas sensors. These sensors can detect any chemical attack and automatically activate the MARS system.
Although we are producing the filters for these products ourselves, regrettably, the filter paper and active carbon have to be imported from overseas. But we are in contact with various organisations in Turkey to have active carbon produced domestically.
In our opinion, one other critical capability regarding filters is the testing infrastructures. Currently, filters are tested abroad, but we will establish the necessary infrastructure for this in Turkey, within Standart Test.
MSI TDR: You are producing the ARES, ARMA and MARS for several types of vehicles. Are there vehicles on which you have integrated members of several product families at the same time?
Alican ÖKÇÜN: There are about 1,000 vehicles that have both ARES and ARMA systems.
Advanced Reliable for Critical Systems
MSI TDR: You have spoken about each of your product families individually; however, if we take a look at Nero Industries in the aggregate, what are the features that make you stand out the most?
Alican ÖKÇÜN: First of all, for all our products we emphasise the principle of “Advanced Reliability,” which also happens to be our slogan. Each Nero Industries’ product is a system of critical tactical importance. Let’s take the engine of a land vehicle, as an example: In the case of a vehicle’s engine failure, the vehicle will lose much of its functionality. But you can still use another vehicle with a functioning engine to tow it around, hauling it from one place to another. Furthermore, if that vehicle with the malfunctioning engine has a weapon system, it will still retain part of its combat capabilities despite the engine being gone. But with ARES, ARMA and MARS systems, you have no such option. If the automatic explosion extinguishing and fire suppression systems or CBRN systems on the crew compartment fail to function, you lose both the vehicle and its crew. If the generator of an air defence vehicle or missile launcher system does not function, you will not be able to use the weapon system or radar that is the whole reason for their existence. This is why we have to prioritise reliability in all of our products. It is imperative for our systems to function and fulfil their tasks whenever needed, in one way or another, and regardless of the circumstances. This is something about which we can make no concessions.
Another feature of Nero Industries is that it boasts expertise in multiple areas. We can manufacture products with very different architectures together and at the same time, and then integrate them onto vehicles. It also gives us substantial integration capabilities, as well as different perspectives. Whenever we learn something new with ARES Fire Suppression Systems, we implement this directly on ARMA Power Solution and MARS Filtration Systems. In every integration project we complete, we acquire a different experience and convey it to the ensuing projects. That is why our product families are, in fact, developing in a way that also supports each other.
MSI TDR: The number of projects you have completed brings to mind two subjects: Your integration capability and production capacity. First, we would like to ask you about integration capabilities. What can you tell us about this?
Alican ÖKÇÜN: Following the tens of successful projects we have completed, integration has become a routine activity for us. A few months ago, for example, we integrated our systems to the vehicle of a local company in Mersin in just four days.
As long as companies notice our integration and R&D capabilities, they become more willing to assign us with projects. If required, we also send our teams to their facilities to better support them in integration-related matters. Right now, we have a team in the facility of each organisation where we are integrating our systems.
MSI TDR: What can you tell us about your production capacity?
Alican ÖKÇÜN: If we take the 2018 figures as a reference, our annual production of explosion suppression systems is about 3,000 units. However, we have begun establishing a new automatic production system this year, so this number will see an increase. As for auxiliary power units and generators, our total production figure has been 2,500 units [a year]. Also under the ARMA product family, we have produced 120 power distribution units and power switching units. We’ve also manufactured 500 CBRN filtration systems. We’re, of course, also manufacturing air conditioners, and have completed the production of about 60 units.
Market Leader in Explosion Suppression Systems
MSI TDR: How would you define Nero Industries’ goals for the future?
Alican ÖKÇÜN: Right now, we are one of the world’s top three companies in the area of explosion suppression systems. In terms of turnover, the global explosion suppression systems market is valued at approximately $300 million, and our share within this global turnover is in the region of 10 percent. One of our competitors allegedly has about 40 personnel, while we have a team of 200 that work dedicatedly, day and night. With this strength we have, there is no obstacle that would prevent us from catching up and surpassing our rivals. Within the next three to four years, our aim is to become the player with the largest share of the market.
MSI TDR: In addition to your activities aimed at improving your current products, are you also working on the development of new ones?
Alican ÖKÇÜN: We are indeed. In fact, since some of these products will be totally unique, we are even considering patent applications once these products become mature. That is why I cannot disclose all of the products we are developing at the moment. However, there are two that we believe will be very effective for users, and of which I can speak with a measure of pride: the Laser Warning System and the Portable Chemical Detector. We are developing the Laser Warning System in order to enhance the defence of armoured land vehicles against laser-guided missiles with a cost-effective solution. The system senses laser signals pointed at the vehicle and automatically fires the vehicle’s smoke grenades in the direction of the laser – and therefore the direction of the potential threat. Thus, by interrupting the laser’s contact with the vehicle, it eliminates the missile’s guidance capability. We have completed the first prototypes of the system, and we are currently continuing with the field tests. We are also in talks with a user for a serial production contract. There are many products of this type on the market; however, unlike our competitors, our product is a far more cost-effective system. I can say that it costs four to five times less than its rivals. As a result, and contrary to its rivals, our products become an effective solution that can be integrated not just to critical platforms such as main battle tanks, but to all types of land vehicles.
MSI TDR: Could you tell us about your Portable Chemical Detector?
Alican ÖKÇÜN: We are developing this product so as to provide infantry units with a practical chemical detection device. In fact, within our MARS systems, there already are chemical sensors against CBRN attacks. But this product will be a system that is light and ergonomic enough to be carried manually by soldiers. Since the device will have a very low level of power consumption, it will be operated using commercial batteries. We are even designing this product to be capable of working in integration with MARS systems on vehicles. Accordingly, when mechanised infantry units disembark from their armoured vehicles, they will be able to easily detach the detection device from its place on the vehicle and carry it around manually. As a result, it will not be necessary for soldiers to carry another detector inside the vehicle. Another idea and vision we have for this product is to integrate to the weather detection system we will mount on top of the vehicle. This system which receives information about chemicals from the detector, and combines them with the weather information it generates, such as temperature, wind direction, and air pressure, to calculate where the chemical attack will spread, and how much effect it will have. This is a subject we’re continuing to work on.
MSI TDR: Will Nero Industries start working on naval and air platforms as well in the coming period?
Alican ÖKÇÜN: We already have ongoing works aimed at naval and air platforms, although I cannot speak more of this at the moment for reasons of confidentiality. However, for the GÖKBEY, Turkey’s first indigenous helicopter, we are ready to provide a variant of the ARES systems, for example. But of course, we need to develop new types of sensors and extinguisher tubes for that. These new types of sensors will be installed on the helicopter in its engine compartment, landing gear, cabin, and cargo section.
And for civilian maritime vehicles, we have developed the maritime variants of the battery management system and AC/DC converters of ARMA product family. With these products, we are planning to make an inroad into the civilian sector. In fact, we expect that the civilian sector will account for five percent of our sales turnover for the year.
MSI TDR: One of the topics highly discussed by the sector in recent times is indigenisation. What ratios of indigenisation have you actually achieved in your products?
Alican ÖKÇÜN: I can say that our indigenisation ratios are at around 87 percent for ARES, 72 percent for ARMA, and 75 percent for MARS.
Nero Industries Grows Together with its Subsidiary Industry
MSI TDR: Having opened the subject of indigenisation, could you tell us about your industrialisation policies? How are Nero Industries’ relations with its suppliers?
Alican ÖKÇÜN: We are currently working in Turkey with 450 component supplier companies, and this number is constantly increasing. For some of the components they supply us with, these companies find themselves having to obtain them from abroad. But thanks to our extensive efforts, the number of foreign-sourced products is gradually decreasing. In addition, with the moving of Nero Industries’ headquarters to Ankara, the number of supplier companies in Ankara has also started to increase. The company headquarters’ move was something done as part of a promise we had given the MND. Last year, we procured more than ₺60 million worth of parts from the industry in Ankara. While growing as a company, we also contribute to the development of the subsidiary industry. This development is not just in monetary terms. For example, we try to improve the quality systems of our suppliers, as much as we can.
ARES: A Product that Exports Itself
MSI TDR: On the subject of exports… You have said that Nero Industries exports directly to 18 countries. Can you share your thoughts with us about exports?
Alican ÖKÇÜN: Actually, the answer lies once again in our products. When you have a product family that is as strong and well-proven on the field, success in exports is inevitable. This success of the ARES also promotes confidence in the ARMA and MARS systems. MARS, in particular, is pushing forward confidently on the path opened by the ARES. Our next target in this area will be the export of our ARMA products. The number of countries to which we have exported so far stands at 18, but we will increase this number many folds in the upcoming period. We will achieve this with the 20-strong business development team we have just started to form. Despite only being a few months since this team was established, they have already succeeded in making $6 million of exports in the last two months. The current share of exports in our turnover is around 15 percent, and our total export forecast for this year is ₺100 million. As we continue to meet our targets, the share of exports in our turnover will grow as well, and we are following different export methods to achieve this.
Strategic Capability Borne from Massive Investment
MSI TDR: You spoke about a new 60,000-square metre factory you are constructing in Sakarya. Could you tell us about the latest position with the factory’s construction, and which activities you plan to conduct there?
Alican ÖKÇÜN: We have already completed the first phase of our investments for this facility, where we will have 150 employees and have started with the second phase. As part of this second phase, we plan to complete all construction activities by the end of 2019. The enclosed area within the facility will be a total 40,000 square metres. Furthermore, we will establish Turkey’s largest clean room in this facility.
Within this facility, we will primarily be focusing on the production and R&D of single-pixel infrared sensors. This sensor is a highly critical component that we specifically use in the ARES explosion suppression systems, as well as the MARS CBRN filtration systems. This is because these sensors are used for detecting chemical gases, lasers and infrared. For ARES alone, our annual requirement for sensors is in the region of 30,000 units.
Indigenous Production of Infrared Sensors
MSI TDR: Are there any R&D studies you are currently conducting in this area?
Alican ÖKÇÜN: Owing to the R&D investigations we are conducting with our six-strong team and the support of various universities, we have, in the past four years, acquired a set of significant capabilities for these components. We have reached the point where we can design single-pixel infrared sensors in line with our own needs. The production of semiconductors is something that is already being done in Turkey. We’ve had a number of trial productions, with components sent from here, and the packaging done in Taiwan. We utilised these products in our systems, tested their sensitivity, and got positive results.
Besides this, the hermetic packaging process – which is a very critical stage in the production of these products – still has to be done abroad, unfortunately. Certain organisations in Turkey have the infrastructure for carrying out this process; however, all our attempts at getting permission to use these infrastructures have been unsuccessful, which is why we decided to take steps towards acquiring this capability ourselves in our factory at Sakarya. But this part of the project will likely be a long one.
MSI TDR: What is the usability of these products in the civilian sector?
Alican ÖKÇÜN: These products have a wide range of applications, from households to the food sector. For example, the fire detectors used in homes have these types of sensors. Similarly, variants of these sensors are used to detect spoiled food in the food industry. We will first produce these sensors to meet our own needs. But in the ensuing stage, our goal is to produce them for companies in both the Turkish defence and aerospace sector and civilian sectors. We know that there is a market size of about $130-140 million in this particular area.
Standart Test: A Fully Independent Company
MSI TDR: In addition to its current investments, Nero Industries is also exhibiting horizontal growth by establishing companies such as Standart Test. Can you tell us about Standart Test’s role within the Turkish defence and aerospace sector?
Öznur ÖKÇÜN: Standart Test was established in 2017 within the same group as Nero Industries, with the aim of having the testing activities required by the Turkish defence and aerospace sector carried out by an independent organisation. Standart Test is in no way affiliated with Nero Industries. The reason for this arrangement was to position at an equal distance from all companies in the sector, including Nero Industries. This has increased a step further the reliability of the testing activities we perform here in this facility. As such, it is out of the question for a Nero Industries personnel to intervene in any way on a testing activity conducted in Standart Test.
MSI TDR: Can you give a brief outline of Standart Test’s activities?
Öznur ÖKÇÜN: Standart Test is a company that focuses on providing many different testing services to the defence and aerospace sector. We will execute these tests within the frame of the MIL-STD 810G, MIL-STD 1275D, and MIL-STD 461F documents. We will be capable of subjecting a land vehicle that comes to Standart Test’s facilities, including those the size of missile launcher systems, to all necessary ambient and EMI/EMC tests. We will hence be able to complete, within this facility, all of the tests a company might need for one of its products of a military nature. The facility will also carry out tests that previously could not be done in Turkey. For example, thanks to this facility, we can now perform solar radiation tests to a platform the size of an armoured vehicle. Furthermore, we currently hold the environmental testing cabin with the highest heating and cooling capacity in Turkey. On another note, as part of the exclusivity agreement we signed with TRTEST in January, companies that have testing requirements first have to apply to TRTEST.
On behalf of our readers, we would like to thank Alican Ökçün, General Manager of Nero Industries, and Öznur Ökçün, General Manager of Standart Test, for taking the time to answer our questions and for providing us with such valuable information.