You can read the interview published in the September 2019 Issue of MSI Turkish Defence Review here:
“Our priority is to achieve what others cannot.”
SMS Defence launched its activities aimed at indigenisation in 1991, long before local participation ranked high on the agenda of the sector. Today, the company has almost 5,000 products and offers solutions to many users both in Turkey and abroad. We had the opportunity to learn more about SMS Defence, whose experienced and devoted workforce has overcome many difficulties, from Necmi Şahin, General Manager of the company.
MSI TDR: Mr. Şahin, how were the foundations of SMS Defence laid?
Necmi ŞAHİN: One of the milestones in the Turkish defence and aerospace sector was the Cyprus Peace Operation carried out by the Turkish Armed Forces in 1974. What happened in this period and thereafter was a turning point for us. Following the embargo implemented against our country at that time, my father was one of the first people in Turkey who was involved in the initiative to kickstart indigenous production. His efforts inspired me, and I established SMS Defence in Izmir in 1991. Today, SMS Defence is a huge family that includes not only its employees, but also its subcontractors that are engaged in modelling, casting, heat treatment, rubber/plastics, forge technologies, protective metal coatings, machining and metal processing. This family is composed of qualified, respectable, talented and ambitious people who have experienced the pleasure of taking part in indigenous and national production for 28 years; I am proud to be a member of this family.
MSI TDR: Since 1991, SMS Defence continues its operations and growth in Izmir, where the defence and aerospace ecosystem is not deeply established. What has been the driving force behind this success?
Necmi ŞAHİN: There are many valuable companies serving within the defence and aerospace ecosystem in our country. Our priority is to achieve what others cannot, especially in the field of spare parts, and this is where we stand apart from others. Think about a spare part supplied from abroad: This part is needed to allow a vehicle to continue operating, but it must be procured from abroad. Until now, nobody has tried or managed to produce it in the country. As you already know, it is difficult to procure parts from abroad due to the export permits required and the fluctuations in foreign currency exchange rates, especially in recent years. We have always maintained an interest in parts and subsystems that are difficult to produce, and have had some success in producing them within the country. We have produced parts that nobody dared to produce in Turkey. In general, such spare parts are produced only by their original producers in the world, and so we have become the second source. I can say that there is no third source. For example, we are the second source in the world of various transmission electronic control units, the production of which has been discontinued by the original producer. The same applies to the transmission housings. We now sell these products as spare parts to many countries around the world. This business approach has contributed a great deal to the development of SMS Defence. None of the items we produce is a one-time order or a temporary product line. Our goal is to be lasting in every field in which we work. To this end, we follow up the parts we deliver and, if necessary, we make modifications according to the feedback from our users. We always stand with our users.
Of course, every member of the SMS Defence family is 100 percent focused on customer satisfaction, and their dedication is one of the cornerstones of our success.
Our Goal is to Reduce Foreign Dependency to as Low a Level as Possible
MSI TDR: Could you tell us about your company’s production infrastructure and some numerical data that will help our readers get to know SMS Defence better?
Necmi ŞAHİN: As SMS Defence, we produce various parts for a broad range of land platforms at our factory, which has an enclosed area of 5,000 square metres. Annually, we are able to process approximately 65 tons of light metal alloys such as aluminium, zinc and bronze, as well as 825 tons of sheet metal, steel alloy and stainless steel as raw material. As a results of our efforts, we have been able to increase our turnover by 50 percent every year over the past five-year period. With our indigenous products, our aim is to continue meeting the needs of the Turkish Armed Forces (TAF), aiming to reduce its foreign dependency in our field of activity. We also offer many of our products for use abroad, thus contributing to Turkey’s export figures.
MSI TDR: SMS Defence stands out with a broad range of products. Could you tell us about your company’s lines of business, and what kind of products it produces?
Necmi ŞAHİN: We produce spare parts for engines, gearboxes, hydraulic pumps and motors, transmission parts and mechanical seals. Our production is mainly for tracked vehicles, although in line with the demands of our customers, we have also started to produce spare parts for wheeled vehicles in recent years. We produce spare parts and subsystems for around 25 different tracked and wheeled vehicles, producing more than 5,000 spare parts for HMMWV, NAVISTAR MAXXPRO, M109, CENTAURO, AMX 30, OSHKOSH, PATRIA AMV, BTR-2, AMX-56 MBT, CAIMAN, M2 BRADLEY, M113 Series, T-155 FIRTINA, AAPC/ACV, M60A1, M60A3, M88A1, M88A2 and M578. We work with many countries that have these vehicles in their inventories, including Turkey.
Our many years of experience have led us to produce this wide variety of products. For example, a tender previously issued by an institution included about 50 items. We were already producing 30 of them, but we are now producing the remaining 20 items, and have added them to our product range. We also produce special testing equipment for the components we produce. None of our products are delivered without being 100 percent verified through various tests. This is a clear indication of the importance we attach to both customer satisfaction and product life.
So far, our work has generally been aimed and geared towards the end user. Our goal for 2020, however, is to take part in major projects carried out by the Presidency of Defence Industries (SSB) together with prime contractors. We are aware that life cycle management has become particularly prominence in the vehicle projects carried out in recent years, and we consider this to be an extremely positive development. We believe that we can provide significant services to our armed forces and prime contractors, especially in the provision, planning, stock management and cost effective delivery of various groups of spare parts.
Product Range to be Further Expanded
MSI TDR: SMS Defence showcased two new products at IDEF’19. What works are you conducting to further expand your product range?
Necmi ŞAHİN: In the last two years, we have established a team that focuses on the production of our own products, and we showcased two such products that were developed by this team for the first time at IDEF’19, being the Electrical Fuel Pump and the Electronically Controlled Transmission Control. We have indigenised both of these products to satisfy the requirements of TAF. The Electrical Fuel Pump, which we have developed for use on M60A3 tanks, complies with the MIL-DTL-62011 and MIL-P-6201 standards and is capable of operating at different voltages and pressure levels. On the other hand, the Electronically Controlled Transmission Control has been developed for the M113 armoured combat vehicle.
We are continuing to invest in R&D to increase the number of our own products, in parallel to our spare parts business. We allocate 15 percent of our turnover to R&D expenditures, and with the work of our engineers within this scope, we will launch new products in 2020.
MSI TDR: SMS Defence has also seen tremendous success in the export market. To better explain the extent of your efforts in this direction, could you tell us about the share of exports in your turnover and the change in this ratio over the last five years?
Necmi ŞAHİN: We have managed to increase the share of exports in our turnover up to 30 percent, and this rate is increasing gradually each year. Our aim is to increase this figure to 50 percent within 5 years, and we have updated our strategic plan accordingly.
SMS Defence’s Experienced Staff Overcomes Challenges
MSI TDR: What can you tell us about the human resources of SMS Defence?
Necmi ŞAHİN: Our workforce is comprised of 60 percent blue-collar and 40 percent white-collar personnel. We are a good team, a good family that works as a single whole. Our employees have a very strong sense of belonging. As such, the main driving force behind our success is not our workbenches, but rather our human resources. Because in the end, our works centre around engineering activities. We may sometimes encounter problems that are difficult to resolve, but the years of experience of our workforce has enabled us to overcome all such obstacles. Other companies may also have adequate production infrastructure, facilities and capabilities; but without the same experience and dedication, they cannot accomplish what we do.
SMS Defence Sets Sights on TAF Engine Renewal Projects
MSI TDR: What projects are included in the future targets of SMS Defence?
Necmi ŞAHİN: Our most important target is the tank modernisation projects, especially the overhaul of tank engines within the scope of these projects. Currently, the TAF is carrying out tank engine overhaul works on its own, while in the rest of the world, we observe that this task is carried out by private companies. We produce and deliver many of the spare parts used in engine renewal activities to numerous companies around the world. We are keen to offer our expertise in tank engine overhaul to the TAF as well, and seek to provide such services abroad. With this in mind, we will be carrying out detailed studies in 2020. With the services we will provide, especially to the Middle East market, we aim to open a door to many new successes.
SMS Defence showcased both the Electrical Fuel Pump and the Electronically Controlled Transmission Control for the first time at IDEF’19.
We are also working on the transmission of the ALTAY Main Battle Tank. We want to take part in and contribute to this project that will further enhance Turkey’s power. In short, we are ready to offer the strength of our experience to future studies.
We are working to strengthen our engineering team and bench and test equipment park so as to provide a broader range of services to the land vehicle manufacturers in the defence sector. Our only goal in each of our studies is to increase the rate of local participation in the country. We have been striving to achieve this goal since the day we were founded, and while we have come a long way, we shall continue our efforts in this regard.
On behalf of our readers, we would like to thank Necmi Şahin, General Manager of SMS Defence, for taking the time to answer our questions and for providing us with such valuable information.