YALTES, a company that is inseparable from the Turkish naval sector thanks to its indigenous products and export successes, is celebrating its 20th founding anniversary in November. Bülent Hamzaoğlu, General Manager of YALTES shared the history of the company, its current state, and its future plans for MSI TDR readers.
MSI TDR: Mr. Hamzaoğlu, you are celebrating the 20th anniversary of YALTES’ founding and we would like to touch on plenty of topics in this interview. We would like to establish some context for the rest of the interview with our first question as well. In this regard, what do you consider the top 3 achievements of your company in the past 20 years?
Bülent HAMZAOĞLU: In the Past 20 years, YALTES became one of the crucial companies in the Turkish naval sector with its ability to create indigenous, effective, and exportable platforms. As such, I think the first place should go to our PİKET 3000 solution, an Integrated Platform Management System (IPMS). We are the first and only solution provider in this area within Türkiye.
As IPMS directly affects the survivability and firepower of a naval platform, it is among the most critical systems for the platform’s performance. It is only possible for a platform to have effective detection, defence, and strike capabilities through IPMS working in the background and performing its duties. IPMS cannot exactly be an off-the-shelf solution, as it needs to adapt to the platform itself. Not to mention, if you need to procure critical systems like IPMS for a platform from abroad, then that platform is not completely indigenous.
As YALTES, we saw that there was a need for IPMS, and we created our solution from scratch using our own resources. We also created the first and only solution in this field within Thales Group. In addition, we achieved a rather high domestic product ratio in our IPMS.
I would like to give the second and third places to the Combat Management Systems (CMS) for surface and submarine platforms. Our surface CMS efforts started with us producing systems as a part of Thales Group and evolved into us designing and providing indigenous solutions from the desired specifications. Our surface CMS components are used in 30 navies across the world.
Our indigenous submarine CMS solutions were created from scratch, using our own resources from the start. We are also the first and only provider of such solutions in Thales Group.
I would like to highlight that we achieved these successes by creating an ecosystem, sometimes gaining capabilities that had not existed in Türkiye, and increasing the domestic product ratio.
Today, we can offer indigenous solutions that can compete in the international markets, utilising the state-of-the-art technologies and meeting developing requirements in IPMSs, surface CMSs and submarine CMSs. As for Türkiye, although other companies exist that produce solutions in these fields under licence production models, we are the only company that offer indigenous solutions. We do not have any Turkish competitors for IPMS either. Of course, we are proud of this situation.
MSI TDR: What kind of partnership structure and aims did YALTES have during its founding?
Bülent HAMZAOĞLU: When YALTES was founded in 2002, its scope was production of the operator consoles for CMSs Thales provided to the world in Türkiye and increasing the domestic contribution to Integrated Maritime Surveillance System (IMSS) and GENESİS projects. As such, we can say YALTES started its journey as a project company. The partnership structure during its founding was 60 percent of the company belonging to Turkish Yalçın Group and 40 percent to Thales Netherlands.
Project companies tend to stagnate after completing the project they were founded for, and we have seen examples of this happening in Türkiye. However, we did not have such a period, as we took on important duties for the production of Thales’ MOC Mk3 consoles and we continued these activities for projects both in Türkiye and abroad. Furthermore, we became a company that produces CMSs, tests them, and integrates them into vessels. We had also achieved various successes regarding software, and integration of various sensors and weapon systems into CMS.
Today, we can offer indigenous solutions that can compete in the international markets, utilising the state-of-the-art technologies and meeting developing requirements in IPMSs, surface CMSs and submarine CMSs. As for Türkiye, although other companies exist that produce solutions in these fields under licence production models, we are the only company that offer indigenous solutions. We do not have any Turkish competitors for IPMS either. Of course, we are proud of this situation.
YALTES Developed as the Sector Did
MSI TDR: In your 20th year message we published in the January issue of MSI TDR, you used the expression “We consider the founding and then the transformation of YALTES has been one of the best examples telling the story of the development of Turkish defence sector.” What kind of parallels did the developments of Turkish defence sector and YALTES show?
Bülent HAMZAOĞLU: GENESİS and MİLGEM projects played a very important role in the ability of Turkish naval sector to provide indigenous platforms. Without GENESİS, MİLGEM would not be a completely indigenous project; it would be a vessel with original hull and super-structure design but an imported CMS.
End users, procurement authorities, and sector companies alike, the sector as a whole experienced many firsts in these projects, as nothing came ready for use from abroad. For example, how to set up documentation or configuration management? How to test a vessel that has not been delivered to an end-user? Who must crew the vessel? These were questions without defined answers, but the sector found them in this process.
YALTES also grew and developed with these projects. We had the advantage of learning from Thales Netherlands in many different subjects. The structured system they provided, along with technology transfer and institutional experience they had on how to start delving into various subjects contributed greatly to us. As such, we were able to be ready whenever that was required.
The development of the sector encouraged us to both develop indigenous solutions and expand to different fields. Türkiye did not have a solution like IPMS, and we created that through MİLGEM project. The end-users, procurement authorities, and sector companies, gaining experience through projects for surface platforms, started spending effort on submarine platforms, and we started offering submarine CMS solutions when there were no other solutions like ours in Türkiye.
In short, YALTES was a part of every journey Türkiye commenced to provide indigenous naval platforms or solutions in the 2000s. Our company presented its indigenous solutions in our expertise. These solutions both met the needs of Turkish Naval Forces and became part of naval platforms Türkiye exported.
MSI TDR: Would you consider YALTES developing parallel to the sector as a sign of YALTES determining its strategies right and managed well? Can you share some insights on that?
Bülent HAMZAOĞLU: As YALTES, we are certain of the following: It might be too late to start developing products and services if you wait for opportunities for that. As such, we are spending effort in many subjects, laying the foundation for them, with our own resources. When you wait for opportunities, you cannot have a sustainable corporation either. We see examples of this, companies that bring together a team for a project, only to disband the team after it. On the other hand, we are a product company. We are advancing through providing our clients with our current products and foreseeing future demands to develop new products along with improving existing ones. We also put a great emphasis on our human resources, and its sustainability, for that reason.
As being a Thales company strengthens our hand regarding strategy as well. Thales Group has certain demands from its member companies, including corporate processes like strategic planning, R&D with own resources, and more.
MSI TDR: Obviously YALTES has faced various challenges in its journey to today. What were the most prominent challenges YALTES faced and how did you overcome them?
Bülent HAMZAOĞLU: We have worked with many platforms and plenty of end-users during our 20 years. As such, the challenges YALTES employees faced would certainly fill an entire library, especially regarding projects. We always have been solution oriented during these challenges, and our approach certainly helped overcome many of them. For example, Thales Netherlands was responsible for the software part for a certain project. There needed to be constant changes on the software, and both performing these changes and testing new versions simply took so much time. We then offered to take on the software leg of the project as well, and this was accepted moving forward. Of course, we did reduce the risk of delays with this move, but we also took on a significant workload as well. However, we were sure our engineers were able to rise up to this challenge, and we were not wrong.
Another challenge I can discuss is getting YALTES’ brand recognition to the level it needed to be. When YALTES was founded, 40 percent of the company belonged to Thales Netherlands. In 2011, YALTES was completely acquired by Thales, making us a Thales Group company. On the other hand, we never had foreign employees during these 20 years, other than members of the board. We perform all our activities in Türkiye with Turkish engineers. We were established in line with the laws of the Republic of Türkiye and we work here. We pay our taxes to Türkiye. As such, we are a company that develops national and domestic solutions. We never rebranded a Thales product as a YALTES one. We develop our indigenous solutions, and we do this while being competitive across the globe. I think sector stakeholders see this clearly nowadays as well. After all, all naval platforms produced in Türkiye, whether for Turkish Naval Forces or abroad, carried at least one YALTES product in the last 10-15 years and continue to do so.
In short, YALTES was a part of every journey Türkiye commenced to provide indigenous naval platforms or solutions in the 2000s. Our company presented its indigenous solutions in our expertise. These solutions both met the needs of Turkish Naval Forces and became part of naval platforms Türkiye exported.
Defence Industry Agency and Turkish Naval Forces Command Played the Main Role
MSI TDR: Which organisations and people helped you become the company you are today?
Bülent HAMZAOĞLU: The first place undoubtedly belongs to Defence Industry Agency (SSB) and Turkish Naval Forces Command (TNFC). SSB and TNFC are our procurement authority or end-user in many projects, and the projects they commenced, and their vision ensured us and many other companies in the sector would produce indigenous solutions. Turkish Naval Research Centre Command (TNRCC / ARMERKOM), and Design Project Office (DPO), then named MİLGEM Project Office, contributed heavily.
We saw a similar contribution from TÜBİTAK BİLGEM for projects aimed at submarine platforms. They trusted us and helped us take our first steps in this field.
SSB, that guides the sector and is the procurement authority for many naval projects, and main contractors for these projects, companies like ASELSAN, HAVELSAN, and STM, played important roles on YALTES’ development.
Of course, Thales Group, as it supported us since our founding and guided us too.
Last but not least, I would like to highlight the contributions of our past and current employees. YALTES’ greatest capital has always been its employees, and the company is what it is now thanks to them along with support from stakeholders.
MSI TDR: What kind of ecosystem did YALTES create in 20 years?
Bülent HAMZAOĞLU: In our communications with our main contractors, we always highlight that we are the solution partner for them. When we are the main contractor ourselves, we wish to have a similar relationship with our subcontractors. Undoubtedly, a win-win for both parties lies beneath a relationship like this. Of course, we can look for the cheapest price for a solution that is widely available, that is not specialised for us or our sector. However, our criteria for a product to be procured by one of our solution partners are very different. The sustainability of our solution partners then becomes critical for us also. We take steps to ensure their sustainability in this regard. For example, we prioritise them for payments. Our solution partners start seeing us differently. Perhaps one can describe it as “YALTES’ name is enough to get things going.” They do whatever they can for us, and thanks to them we can get very special services.
With our approach, we created an ecosystem where we can receive various hardware and services. This ecosystem brought many companies to the sector and increased our domestic product ratio of our products.
MSI TDR: What can you share on the domestic product ratios of your products and solutions?
Bülent HAMZAOĞLU: In our solutions and products, we do not have off the shelf complete systems procured from abroad. Of course, there are subsystems and units like computers, network equipment, and cameras that aren’t produced in Türkiye. You can often find them cheaper abroad. However, we procure them from Turkish distributors, even if it costs more, allowing us to enjoy the delivery services from a domestic company and increase our domestic product ratio. Sometimes we can even request special services. For example, our solutions for CMS include many computers and if we attempted to test all of them ourselves, we would have a significantly increased workload. We can require the testing services from the distributor or the documentation that is needed in the project. We can have them do the deployment process. Using processes and applications like these, we were able to raise the domestic product ratio of IPMS to 80 percent, even though it includes many components procured from abroad.
We are constantly looking to increase these numbers too. For example, we are starting to use alternative or substitute solutions produced in Türkiye, if they are certified by Turkish Lloyd.
We develop our indigenous solutions, and we do this while being competitive across the globe. I think sector stakeholders see this clearly nowadays as well. After all, all naval platforms produced in Türkiye, whether for Turkish Naval Forces or abroad, carried at least one YALTES product in the last 10-15 years and continue to do so.
Support from Thales, a World Giant
MSI TDR: An important milestone for YALTES has been the complete acquisition of the company by Thales Group in 2011. What kind of advantages does being wholly owned by Thales Group offer to YALTES?
Bülent HAMZAOĞLU: Thales is certainly a world giant. Its corporate structure, business style, and current resources certainly make a difference. For example, our processes have been conceptualised as to comply with the expectations Thales has from its subsidiaries. This, of course, ensures the business goes forward smoothly. Every single thing is done by the book and audited very effectively. On the other hand, as Thales competes globally in technology driven fields, it also puts great emphasis on innovation and speed of solution or product development. In other words, Thales does not have the corporate bloat that might be seen in other large organisations. Everyone provides an added value, and there is always a share given to R&D from the revenue. Thales Group has a significant training and learning infrastructure. People with capability and desire to learn are nurtured through this infrastructure.
In addition, as Thales operates across the entire world, it definitely broadens our horizons regarding marketing and business development. We can access critical information, and through them we can follow important projects. Likewise, Thales Group provides advantages to us regarding after sales support.
MSI TDR: What would you like to share on the technologies Thales brought to YALTES and its investments in your company?
Bülent HAMZAOĞLU: We started our activities during our founding phase with a technology transfer process from Thales regarding CMSs. We received crucial information on the designing, production and testing processes of these products and the know-how regarding business flow, laying the groundwork for us. I would like to add that back then, YALTES employees were the first ones to receive IPC certification in the sector. We also took on a work package on critical sensor integration while we did our baby steps, with Thales’ support.
In the following period, there were many examples where we benefited greatly from the experience and know-how Thales have acquired over the years. In addition, YALTES proved itself as a design house and an excellence centre with the capabilities it developed.
We clearly see that the world is extremely competitive. However, YALTES is making waves as a company that understands the end-users and adapts its products in line with their demands in this competitive scene. Our company achieves this with our experienced personnel, with some of the serving in the TNFC in the past and some gaining experience through many projects for years. Our personnel can easily communicate with our end-users and can understand them.
One Step Ahead of Competition, Both in Türkiye and Abroad
MSI TDR: What are your thoughts on the position YALTES is in, both in Türkiye and in the sector?
Bülent HAMZAOĞLU: YALTES is now a company that can design indigenous products on management and mission systems for naval platforms in Türkiye, a company that can adapt, produce, test, and integrate these products in line with customer demands, and a company that is preferred by end-users, procurement authorities, and main contractors.
Of course, there is competition in Türkiye. However, we are ahead of the competition in two issues: One is our indigenous solutions we create through our engineering capabilities. We do not choose the easy road of licence production or providing off-the-shelf solutions we found elsewhere. As such, we can adapt the solutions quickly and easily for the needs of our end-users.
The other is our products being special solutions that meet military requirements. Yes, there are often solutions in civilian markets that have similar names or functions to those used in military platforms. However, these solutions neither meet the requirements of a military end-user completely nor can be integrated into military vessels due to environmental conditions. In contrast, our solutions completely meet the needs of military platforms, making us one and only in Türkiye.
MSI TDR: And what kind of position does YALTES occupy in the world?
Bülent HAMZAOĞLU: We clearly see that the world is extremely competitive. However, YALTES is making waves as a company that understands the end-users and adapts its products in line with their demands in this competitive scene. Our company achieves this with our experienced personnel, with some of the serving in the TNFC in the past and some gaining experience through many projects for years. Our personnel can easily communicate with our end-users and can understand them.
Our technologies and quality ensure our competitiveness around the world as well. As such, we are taking part in many European vessel procurement projects under Thales’ umbrella.
And the greatest proof of that is our products being used in 30 countries across the globe.
We aim to both continue with our current roles and take on new ones in Turkish indigenous platform development and construction projects, Turkish naval exports, and various Thales projects across the globe, while maintaining our client diversity. As such, we aim to cooperate with the integrators with which we could not previously work together.
Human Resources: The Key for Sustainability
MSI TDR: You underline the importance of human resources in YALTES. The campaign you ran for 8 March International Women’s Day enjoyed great attention as well. In addition, you have mentioned that you are proud to see your former employees working for other companies in the sector in your messages and interviews, describing YALTES as an academy. That is certainly a novel approach in this sector. Could we hear from you YALTES’ approach and policies on human resources?
Bülent HAMZAOĞLU: We consider the human capital as the greatest asset in YALTES’ books. We have many colleagues that have been here since our founding, with close to 20 years of experience in our company. As such, we are able to build a structure with a corporate culture that brings experience, know-how, and new generations together.
In our field, it is crucial to communicate well with the end-users and to have sector knowledge. For this reason, we have staff that previously worked as a part of naval forces in different levels. They bring an immense experience and know-how on determining which functions and features our products should have, interfacing with other systems, platform integration, platform deployment, and integrated logistics support. Around a fifth of our current personnel force used to serve in the naval forces.
Our employees with civilian backgrounds gained a significant experience through many different projects over the years, becoming experts in their fields. In addition, the colleagues I have mentioned hold a significant share of our management positions. For example, our technical manager and software engineering manager have been a part of YALTES since its founding.
YALTES to Continue Its Controlled Growth
MSI TDR: What will the future bring for YALTES?
Bülent HAMZAOĞLU: To answer your question regarding products, it is clear that mission and management systems for naval platforms are under constant development, with a few main trends being the following: Reduction of hardware footprint, reduction of personnel needs through automation, and development of innovative human machine interfaces like holograms. We spend our R&D efforts in these trends.
We plan to grow in a controlled manner, sustaining our profits. Our employment numbers may see an increase, but we do not think it will double, for example. As for our location, we are pleased to be in Teknopark Istanbul. And on the production front, we do not see an expansion soon, as we work with our ecosystem.
We aim to both continue with our current roles and take on new ones in Turkish indigenous platform development and construction projects, Turkish naval exports, and various Thales projects across the globe, while maintaining our client diversity. As such, we aim to cooperate with the integrators with which we could not previously work together.
We consider modernisation and logistics support as fields that will have a significant share in both our revenue and our activities. Many naval platforms in various naval forces use previous generation solutions from Thales. If these platforms need new capabilities or to be modernised, YALTES becomes the right address within Thales Group, with our company taking on certain modernisation projects by itself. In addition, we plan to be a part of modernisation projects by Turkish companies around the world and all such projects in Türkiye, like we have been doing so far.
Unmanned vehicles will occupy a crucial spot in future battlefields, and we are performing R&D on these using our own resources. We took part in a Turkish unmanned surface vessel project with our IPMS solution. As we use the same system for both manned and unmanned platforms, it is rather easy for manned platforms to control unmanned ones without requiring significant changes.
MSI TDR: Anything you would like to add?
Bülent HAMZAOĞLU: YALTES is a company that achieved all its successes through its indigenous efforts and its expert staff. We are cultivating both our new colleagues and our managers. We owe all our success to our past and current employees. I thank them once more in our 20th year. I am confident that we will continue to find new successes with our current and future employees.
We would like to thank Bülent Hamzaoğlu, General Manager of YALTES for taking the time to answer our questions, and for providing us with such valuable information.