Home INTERVIEWS Ruhi BAYTAR, Founder of PEM Engineering: “In the coming period, it will be both economically and technologically beneficial to take on grand projects in cooperation with financial and technological partners, and with countries that we can trust.”

Ruhi BAYTAR, Founder of PEM Engineering: “In the coming period, it will be both economically and technologically beneficial to take on grand projects in cooperation with financial and technological partners, and with countries that we can trust.”

by MSI

PEM Engineering, which stands out as an exemplary entrepreneurial success story in the Turkish defence and aerospace sector, is undergoing a major management change, with the second generation taking over after the retirement of Founder Ruhi Baytar. On the eve of this change, we talked to Ruhi Baytar about the foundation of the company and its progress to date.

MSI TDR: You are what one would call an industrial worker who has been involved in the defence sector for a long time. Can you give us a summary of the many years of your working life at a time when you are preparing to leave your office to the next generation?

Ruhi BAYTAR: Firstly, I would like to offer my thanks to MSI TDR, which provides an invaluable service to the Turkish defence sector, for giving me this opportunity as I prepare to retire at the end of a long and tiring 60 years working in both the public sector in the early 1960s, and in the private sector since the 1980s. As you publish your 200th issue for the Turkish edition, I wish for your continued success.

I started working in the defence sector around 33 years ago. Our priority was always the good of the country, and we have passed through four stages on our journey.

The first of these four stages was the foundation of PEM Engineering and the works related to representation of foreign companies in Turkey. In the years leading to 1980s and even to 1990s, the Turkish defence sector was, unfortunately, still in its founding period, and our country had to meet most of its needs from overseas, but in time, a few highly effective and successful companies began to be established in every branch of the defence sector thanks to the adoption of appropriate policies and the constructive efforts of the users and governments of the period. This led to a reduction in foreign dependency, and every branch of the defence sector started to make headway in exports. It is admirable to see that this growth is still continuing at full throttle today. More importantly, many manufacturers started operating in similar branches, and this led to constructive competition, which further accelerated development. Accordingly, product quality in these areas reached global standards, and even surpassed them in some areas.

PEM Engineering was involved only in representation at the outset of my career, dealing mostly with electronics-based NATO projects, and working together with foreign companies on more than 30 projects of this kind. As electronic systems have, on average, a 20–25 year effective and economic lifespan, the systems delivered in these projects are eventually replaced with new systems that are compatible with today’s technologies, and that are being created by local companies, and this cycle continues. This is really something to be proud of for our country.

We upgraded our operations in the second stage of our business, spearheading a long-term initiative in which the foreign companies with which we worked would invest some of the profits made from our country back into Turkey.

Convincing companies in this direction required long-term effort, but our efforts finally bore fruit, and a plant was built in Ankara for the manufacture of electronics. This was followed by another plant that entered into operation in İzmir working in the field of electro-mechanics. Consequently, 300–400 people came to be employed, depending on the workload, in these two medium-size companies. In time, these plants started to make exports, with the plant in İzmir in particular being successful in this regard, exporting more than half of its production. In short, both plants contributed considerably to the local sector, to the economy and to employment. This makes us very proud.

In the third stage, PEM Engineering developed a strategy that would see it working with foreign companies not only at home, but also abroad, after many years of effort and hard work. Several projects were developed in this field, and there are still intensive works to be carried out on some of such projects. We attach particular importance to cooperating with companies in Turkey in our works at this stage.

The defence sector of our country is making rapid progress. In the fourth and latest stage, PEM Engineering has been carrying out works to enter into the field of production for the last 7–8 years, with a view to contributing to this change and development. This led PEM Engineering to become a partner of GES Engineering, with the aim of combining our efforts to make the maximum contribution to the defence sector of our country. On the other hand, our works related to exports are continuing, and some products have started to be exported. Our efforts to increase our exports are gaining momentum, with our goal being to export a large proportion – at minimum, 40 percent – of our production. While our works in this regard are still at an early phase, as of now, 150 people are employed, and it is aimed to increase this number to 500 within the next 2 years.

Another indispensable aspect of the defence sector, and in fact in every area, is competition. Development is only possible through competition, as without it there is only laziness and inertia. Competition needs to be created as much as possible in all areas, except for in some very specific circumstances. The number one rule when you want to produce the best in the most economical way is to create as competitive an environment as possible.

MSI TDR: We believe one need a former career that supports your area of interest if he is to have success in your working life. Could you tell us a little about your life before you set out on this journey?

Ruhi BAYTAR: I joined the army in 1962, serving as a signal officer, and so electronics were a natural field of interest for me.

I commanded various units in the signal corps, and worked as an instructor in the signal corps school until 1979. I was assigned to the Naples Headquarters of NATO between 1979 and 1982, where I was tasked with overseeing the communication, information system and radar projects of the Southern Region. Afterwards, in 1982, I was assigned to the General Staff, Department of Communications and Electronics, Project Systems Branch, where I joined a team working on the development of communication and information systems, and radar projects for our country, and worked for 5 years in this department, and for the final 2 years as director. During that period, I participated in working group 18 (communications), working group 29 (information systems) and working group 28 (radar) meetings at the NATO Headquarters in Brussels for around 1 week every month due to the abundance of projects.

The experience I gained at that time influenced my choice of career, and also facilitated my communication and collaboration in our works with foreign companies. I owe a lot to the Turkish Armed Forces, and thus to my country, for providing me with this opportunity. I have made every effort to pay this debt back throughout my life.

MSI TDR: Could you share with us your thoughts of the sector, based on the knowledge and experience you gained during your working life?

Ruhi BAYTAR: The defence sector produces advanced technology products, but what’s more interesting is the fact that the evolution of these products, that is, how they change and develop, comes very quickly. Adapting to this pace can never be done through mimicry or reverse engineering. While it is true that many countries in the world choose this method in many areas, it doesn’t mean that such practices are ethical, legal or appropriate.  Furthermore, once a system has been copied, a more advanced system enters the product line. As such, this approach is neither right nor sustainable. What is right is R&D, and its outcome as indigenous designs. In recent years, indigenous design in particular has been attributed great importance, although works in this regard need to be increased and made more widespread. This is only possible if the related universities, public institutions and private companies allocate sufficient funds to R&D. Our state provides all the support it can in this regard, but increasing the funds allocated to such projects that promise a high return can be helpful. Furthermore, companies should think of R&D as a priority investment area when planning their expenditures related to their earnings.

Mechanical and electromechanical products are, of course, important in the defence sector, but what’s more important are software-centric systems or components with their high added value. Highly effective and competent units need to be created within public institutions and private companies, and production, capacity and capabilities need to be improved by all means necessary.

Another indispensable aspect of the defence sector, and in fact in every area, is competition. Development is only possible through competition, as without it there is only laziness and inertia. Competition needs to be created as much as possible in all areas, except for in some very specific circumstances. The number one rule when you want to produce the best in the most economical way is to create as competitive an environment as possible.

Much can be said about these issues, but I would like to end with one final point. In the coming period, it will be beneficial for the sector to implement major projects, both from an economic and technological standpoint, and to work with financial and technological partners and countries that we can trust. I think this will have the following benefits:

  • The financial load can be shared, so projects can be completed before the planned date.
  • A synergy can be created around the workforce and technologies of the participating countries,  easing the process forsolutions.
  • As it will be easier to enter the markets of not only our country, but also of the other participating countries, it will be easier to market products, and market boundaries can be expanded.
  • This organic and reciprocally created bond will serve as a political gain when necessary.

MSI TDR: You are handing over your responsibilities at PEM Engineering to your children, meaning that PEM Engineering is becoming a company managed by the second generation. Could you tell us how you have prepared PEM Engineering for such a handover?

Ruhi BAYTAR: When I started this job, I was alone. I came to the conclusion that my children needed to have a good education if they were to contribute to this work in the future, and so I sent them both to the United States to study for their college degrees. When they returned to Turkey, I encouraged them to work with me. Naturally, they had a hard time at first. I told them, “Don’t push yourselves; just watch me first.” They watched me for the first 6–7 months, and then I slowly started giving them various tasks. I am very happy to see that my two children have reached a point where they can manage the company without me. In the future, I will continue to support them as the Honorary President of PEM Engineering, and will help them as much as I can when they need my experience.

On behalf of our readers, we would like to thank Ruhi Baytar, Founder of PEM Engineering, for taking the time to answer our questions and for providing us with such valuable information.

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