Home SPECIAL COVERAGES SaSaD Publishes 2021 Performance Report: Sector Leaves Pandemic Behind

SaSaD Publishes 2021 Performance Report: Sector Leaves Pandemic Behind

by Can Kılınç

Defence and Aerospace Industry Manufacturers Association (SaSaD) published 2021 Defence and Aerospace Industry Performance Report on June 5. When important metrics like turnover, overseas sales revenue, and R&D investments are evaluated, it is clear that the sector is leaving the pandemic behind and showing an upward trend once more.

Osman Okyay, Chairman of the Board of SaSaD

The report is the only open-source report and provides a reference for the metrics regarding the sector. It is published every year, and this year’s data was acquired from the answers received from 81 SaSaD member companies responding to the survey. In the opening of the report, it was stated that SaSaD had 206 manufacturers in total as members. As such, the participation rate for the survey was around 39 percent.

According to the data in the report, the sector’s turnover increased by 14.72 percent and its overseas sales revenue increased by 42 percent. The sector also spent 30 percent more for developing technologies and product. The biggest change in the sector data is the 43 percent increase in equity spending by sector companies. In the foreword of the report, prepared by Osman Okyay, Chairman of the Board of SaSaD, this fact is evaluated as the clearest indication of companies requiring less external support as they advance to the future.

Figure 2. The change in sector revenue and employment figures between 2017-2021

Some important metrics for the 2021 performance of the sector are as follows:

  • Turnover: $10,159,297,769
  • Overseas Sales Revenue: $3,224,786,000
  • Value of Recently Received Orders: 8,575,000,000
  • Imports: $2,062,204,996
  • R&D Spending: $1,639,545,306
  • Total Employment: 75,660
  • Revenue per Capita: $134,276
  • Revenue from Abroad per Capita: $42,622

In comparison with 2020, the numbers for 2021 changed as follows:

  • Total revenue increased from $8,855,799,282 to $10,159,297,769 (14.72 percent).
  • Overseas sales revenue increased from $2,265,829,152 to $3,224,786,000 (42.32 percent).
  • R&D spending increased from $1,240,798,564 to $1,639,545,306 (32.14 percent).

Imports decreased from $2,161,265,932 to $2,062,204,996 (-4.58 percent) while total employment reduced from 77,566 people to 75,660 people (-2.46 percent).

Land Systems at the Top

Figure 3. Breakdown of turnover for year 2021 by sectors.

By revenue, land systems were at the top once more by sectoral breakdown like previous years. The second place went to Weapons, Munitions, Missiles sector as it enjoyed a great leap compared to last year (from 9.65 percent to 16.44 percent). The complete sectoral breakdown for revenue is as follows:

  • Land Systems: $2,347,000,000, 23.10 percent
  • Weapons, Munitions, Missiles: 1,670,000,000, 16.44 percent
  • Military Aviation: $1,652,000,000, 16.26 percent
  • Civil Aviation: 1,643,000,000, 16.18 percent
  • Marine Systems: 1,164,000,000, 11.45 percent
  • Maintenance, Repair, Overhaul: 710,000,000, 6.99 percent
  • Security: 590,000,000, 5.81 percent
  • Other: 383,000,000, 3.77 percent

Domestic part of the total turnover was $7,778,000,000 while $6,322,000,000 of this turnover being from the end-users and remaining $1,456,000,000 from the industrialists. The overseas turnover of $2,381,000,000 saw a distribution of $1,434,000,000 from the end-users and $947,000,000 from the industrialists.

Civil Aviation Topped the Charts for Exports

In 2021, the overseas sales revenue increased by 42.32 percent compared to the last year, reaching $3,225,000,000. This data point shows that the exports bounced back to pre-pandemic levels and then even grew higher.

The sectoral breakdown of export revenue are as follows:

  • Civil Aviation: $944,000,000, 29.25 percent
  • Land Systems: $631,000,000, 19.57 percent
  • Military Aviation: $534,000,000, 16.57 percent
  • Weapons, Munitions, Missiles: $498,000,000, 15.44 percent
  • Marine Systems: $459,000,000, 14.24 percent
  • Other: $63,000,000, 1.97 percent
  • Security: $48,000,000, 1.49 percent
  • Maintenance, Repair, Overhaul: $48,000,000, 1.48 percent

The exports to the USA increased by 47 percent, reaching $897,000,000, while these data points were 84 percent and $679,000,000 for Europe and 28 percent and $1,649,000,000 for the rest of the world.

Backlog Increased Significantly

Figure 4. Breakdown of exports for year 2021 by sectors.

According to the data, recently received orders rose by 38.89 percent compared to 2020, reaching $8,576,000,000. The top 3 sectors by received orders were civil aviation, weapons, munitions, missiles, and land systems. In addition, 51 percent of these orders were received from overseas.

Ankara, the Centre of Gravity for the Sector

This year’s report also included employment and revenue figures by provinces. According to the data, 61.68 percent of total revenue was received by companies based in Ankara and 16.44 percent was received by companies based in Istanbul. Likewise, 68 percent of people employed in the sector was centred in Ankara, while this number was 24 percent for Istanbul.

Defence and Aerospace SMEs Enjoyed $532,000,000 Revenue

SaSaD also published separate versions of the report focusing on large companies and small and medium enterprises (SMEs).

In the SME focused version of the report, results from 42 SMEs that answered the survey were also included. According to the data, the performance of sectoral SMEs are as follows:

  • Turnover: $532,000,000
  • Revenue per Capita: $137,078
  • Overseas Sales Revenue: $185,000,000
  • Value of Received Orders: $139,000,000
  • Imports: $31,000,000
  • R&D Spending: 41,000,000
  • Total Employment: 3.881 people

The largest share of turnover for SMEs was received for land systems with 48.05 percent, followed by marine systems with 27.30 percent. However, even though these sectors made up over 75 percent of the turnover, the share of total received orders for said sectors was only 33 percent. The top 3 sectors by received orders for SMEs were land systems, weapons, munitions, missiles, and military aviation.

Figure 5. Breakdown of turnover by SMEs for year 2021 by sectors.

SMEs Deliver Directly to End Users

The institutions and organizations to which SMEs deliver their products were also noticed in the report. SMEs delivered over 50 percent of their goods directly to end-users, both in Türkiye and abroad, rather than main contractors.

Sector Will Be Negatively Affected by Input Costs

Chairman Okyay also included some insights on the future in the foreword: “We have entered a period with rising commodity prices, due to the effects of the pandemic and Russo-Ukrainian Conflict. We foresee that the rising input prices will negatively affect our sector in 2022. If we were to continue the growth that we enjoyed last year in 2022, the price increases must be controlled and we must spend effort on developing alternative solutions as well.

Figure 6. Breakdown of Turkish and overseas sales by SMEs for year 2021 (all the number are in $ Million).

We wish to see the increase in the revenue are reflected in the employment figures, as well as the overall increase in performance in 2022 data as well. Our priority target continues to be the protection of current markets, creating new markets, and achieving better results through our companies developing dual purpose products and services.”

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