Home EDITORIAL COMMENT Turkish Defence and Aerospace Sector Broke Monthly and Yearly Export Records

Turkish Defence and Aerospace Sector Broke Monthly and Yearly Export Records

by MSI

As Turkish Exporters Assembly (TİM) announced the export data of the Turkish defence and aerospace sector for December 2021 as $433,009,000, the sector’s export revenue for the year 2021 has also been revealed. Sector increased its export revenue by 41.5 percent compared to the last year and broke its newest record of $3,224,786,000. As such, the sector reached its highest export revenue by month and by year.

While we have heard of rumours saying Baykar was the company with the highest exports by platform, no details have been announced on the performance of the companies. As such, we shall make no further comments on the companies’ exports for now and instead, continue with the Global Strategies Conference for Defence and Aerospace Industry, held at the beginning of December.

Antalya Hosted Stakeholders of Sector Exports

The roadmap for the exports of the sector were discussed in the 2nd Global Strategies Conference for Defence and Aerospace Industry, held in Antalya on 4-5 December. In the event, sector officials also met with Dr. Mehmet Muş, Minister of Trade and Mevlüt Çavuşoğlu, Minister of Foreign Affairs.

The beginning of the event saw a speech by Minister Çavuşoğlu, in which he shared they were working closely with Presidency of Defence Industries and the sector, and that they were establishing a Department of Defence Industries within the ministry to better coordinate their efforts.  Roundtable talks and panel discussions were also held in the event regarding the ways to increase export revenue for the sector.

Minister Dr. Muş attended the second day of the event and informed the participants on the sector’s access to financing in exports: “To solve the potential collateral problems our exporters may find in financing acquisition; Export Expansion Inc. (İhracatı Geliştirme A.Ş.) has been founded with equity from TİM and Eximbank. The corporation will benefit solely our exporters, and it is aimed to solve their biggest problem, finding guarantees for credit, and reduce the cost of acquiring credit for them.”

Prof. Dr. İsmail Demir, President of Defence Industries made a speech at the conclusion of the event and shared the following regarding the results of the activities that were closed to the press: “We analysed the world geography and observed that we need to develop a strategy for every and each country. Starting negotiations with financial readiness, lobbying, establishing a presence, organising companies rather than offices were all at the top of our agenda. During the export process, it is very important for our companies to not compete with each other, and we will make sure this does not happen.”

The absence of Ministry of National Defence was telling in the event where Dr. Mehmet Muş, Minister of Trade and Mevlüt Çavuşoğlu, Minister of Foreign Affairs met with sector officials.

Another highlight of the event was “10th Year Export Champions” award ceremony, and its award categories, held for the 10th founding anniversary of Defence and Aerospace Industry Exporters’ Association (SSI).

SMEs and Their Place for Exports

Sustainability in exports is as important as the export revenues. Technology-oriented SMEs, as they reduce the costs and dependency on foreign imports, along with increasing national share in the industry, come into the picture in this regard.

We will not be touching on how these technology-oriented SMEs achieve direct export capabilities in addition to indirect export for now.

In order to break new record in exports, or sustaining current levels at the very least, it is necessary for these technology-oriented SMEs to keep being in the game. Their development must be supported, and new technology-oriented SMEs must join the fray, even.

Let’s take a look at award categories again. SMEs were not able to win awards in top three exporters by revenue, nor they could win Air Vehicles, Land Vehicles, Naval Vehicles, Electronic Systems, Armed Turrets, Small Arms, Rockets and Missiles, or Simulator categories considering the nature of these.

It is clear that changes must be made in order to see the names of SMEs in future export data or export awards. Tackling this problem must be done in a very wide area, from developing export strategies through finding answers to how SMEs can export their solutions to developing and retaining human resources to make exports possible for these SMEs. Perhaps holding an award ceremony for SMEs could be considered the least important part of this problem.

On the other hand, while it is not that important for the problem in general, it is very important for SMEs to be remembered in this process. We all know the Aesop tale with the lion and the mouse. Just as in that tale, it might be the mouse that saves the lion one day.

When we look at countries with developed defence industries, we see affirmative action-like policies and applications for the development and protection of SMEs, especially technology-oriented ones. Some examples for these are:

  • Only accepting SMEs to bids under a given cost and
  • Barring large companies from bids regarding systems or subsystems that can be produced by existing SMEs.

A Turkish defence and aerospace sector that can positively discriminate for SMEs in award ceremonies will speed up the solution process for its structural problems, leading to achieving its desired healthy structure much quicker.

As for awards, examples from some previous applications from various organisations can be utilised and different award categories for “large companies”, “SMEs” and even “start-ups” can be created.

We would like to state once again without categorising companies by their size or without regulating the relationships between parties that occupy different layers in the sector, a healthy development of the sector, and one of the indicators of this process, the sustainability of the exports cannot be achieved.

We wish to be with you again, dear reader, in our February issue that will include the important developments in January.

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