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Defense and Aerospace Manufacturers Association

Defense and Aviation Industry

Performance Report

DEFENSE AND AEROSPACE MANUFACTURERS ASSOCIATION

2013

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TABLE OF CONTENTS

1. ABOUT SASAD

2. PREFACE

3. ABOUT THE PERFORMANCE REPORT

4. SALES

4.1. Overview

4.2. Sub-sectors

4.2.1. Turnover Per Capita

4.2.2. Shares of Sub-sectors in Total Turnover

4.2.3. Direct Contribution Shares of Employees working in Sub-Sectors to

Their Relevant Sectors

5. ORDERS RECEIVED

6. EXPORT

6.1. Distribution of Exports

7. IMPORTS

7.1. Distribution of Imports According to Sub-sectors

8. PRODUCT AND TECHNOLOGY DEVELOPMENT

8.1. Product Development

8.2. Technology Development

9. EMPLOYMENT

10. GENERAL OVERVIEW

11. COMPANIES CONTRIBUTING TO PERFORMANCE DATA

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1. ABOUT SASADKIN

Defense and Aviation Industry Manufacturers

Association was founded in 1990 and since then it

has been serving to the manufacturers and

organizations operating in the fields of Land, Naval,

Air, space and security with the mission of

contributing to the development and strengthening

of the industry.

SASAD is involved in various activities and initiatives so

that its members can operate in a more suitable job

and work environment. It tries to solve the industry

related problems by presenting them to the attention

of the relevant authorities and represents all the fields

of the industry both at home and abroad.

SASAD, is an active member of European Aviation, Space and Defense,

Security Organization and contributes to shaping the views and

recommendations of the industry in European Union Committees through this

organization. It supports the international expansion of its members through

protocols signed with similar institutions of the countries.

SASAD has 130 manufacturers and organizations and 4 conglomerations

under its roof. According to the 2013 performance report, US $5 billion of sales

(turnover), $1.4 billion of exports and 32,000 employees contribute directly to

the country's economy.

S

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2. PREFACE

2013 Industry Performance Document is composed of performance data

of 65 members responding to the survey form prepared by SaSaD. The

performance data of our members that has commercial confidentiality is

treated as confidential information and not shared with third parties except

the Secretary General's Senior Management. It is determined that the

performance of 70 firms responding to our survey constitutes 90-95% of the

total performance of the industry and thus this report is considered to reflect

the data necessary to analyze the performance of the Turkish Defense and

Aviation Industry.

We present our gratitude to our respondents. We believe that the report

prepared with their contributions will be valued by our sector players and

decision makers.

In addition, industry performance data will be shared with European

Defense and Aviation Industries Association (ASD) and reflected on European

Union platforms.

Our press also uses our similar reports widely in the industry news and this

report will be shared with the Turkish Public through the media.

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Turkish Defense and

Aviation Industry

Performance Report 2013

3. ABOUT THE PERFORMANCE REPORT

Like every year, Defense and Aviation Industry Manufacturers Association

(SASAD) measures the performance of the Turkish Defense and Aviation

Industry with the data collected from the member companies, institutions,

and organizations and releases to the interested parties for review after

coordination with the Under secretariat for Defense Industries.

The Performance Report is deepened this year to include the sub-

sectors. In this context, the following areas are considered;

• Land Platform Manufacturers

• Naval Platform Manufacturers

• Aviation and Space System and Subsystem Manufacturers

• Electronics

• Electrics

• Informatics

• Rocket Missile Weapons and Ammunition

• R&D and Engineering

• Machine, Mold, Spare Parts

• Clothing, Apparel

• Other Manufacturers and Institutions

This will provide the opportunity to conduct an in-depth investigation of the

sub-sectors in the coming years.

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Data collected from 65 SASAD Members (The list of the Companies,

Institutions, and Organizations is in attachment A.) includes the main subjects

of;

• Sales,

• Export,

• Import,

• Product Development Expenditure [Equity and Customer / Public Incentives (R&D)]

• Technology Development Expenditure (R&T)

• Employment

The turnover and export data in the field of civil aviation and space is

included in the performance (turnover) as of 2009 and the foreign currency

generating services of the companies and organizations is included as of

2013.

When an overall assessment of the year 2013 is made, it can be

concluded that the industry continued its uptrend that it had caught at the

beginning of the year 2000, its Total Sales (Turnover) continued to increase, it

benefited more from R&D incentives and it achieved a great success

especially in the field of exports. On the other hand, import continues to

decline every year. The entire dollar values mentioned in the report is defined

as "US Dollar".

Turkish Defense and Aviation Industries Performance of the year 2013 is

presented in the following table as a summary before proceeding to the

detailed descriptions.

AREA OF PERFORMANCE

Billion Dollars

Billion Euros

Sales 5,076 $ 3,822 €

Export 1,569 $ 1,181 €

Import 1,326 $ 0,988 €

R&D Expenditure 0,926 $ 0,697 €

Employment 32,368 People

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4. SALES

4.1. Overview

The total sales of World Defence and Aviation Industry gradually

decreases compared to 2010 and previous years. The causes of this decrease

are determined as the 2008 global financial crisis and the constraints in the

defence budgets of the manufacturing countries, the change in perceived

threats, as well as the termination of Iraq operation and that the operation in

Afghanistan is approaching the end. The total turnover of 100 large firms

selected in the world defence industry in 2013 is around 411 billion USD. (There

are also ASELSAN and TUSAŞ companies among these 100 companies.)

(source: SIPRİ 2013) The share of Turkish Defence and Aviation Industry in this

turnover is 1.2%. The total turnover of our industry in 2013 was $5,076 billion. The

foreign currency generating services are also included in this figure. Industry

average for Turnover Per Capita is $156,821. When compared with the

turnover per capita in 2012 ($142,019), a significant improvement is observed.

However, the fact that we are well below the world industry average

($317,580), emerges as an important problem of our industry.

During the 4 year period, from 2010 to 2013, the total change in turnover

is calculated as 63.91%.

Total turnover increase in 2013 was 5.75%, compared to 2012. This data,

which is low compared to the average of the last 4 years, may be due to the

fact that some important system deliveries (ATAK and SG Search and Rescue

Vessel) could not be invoiced due to prolonged Group Acceptance Tests.

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* The production of military factories and shipyards, which is $550 million, is

included.

TOTAL TURNOVER GRAPH OF THE LAST 4 YEARS ($ BILLION)

4.2. Sub-sectors

In order to deepen the performance evaluation this year, the turnover

distribution of our companies and organizations in land, marine, air systems

and civil aviation and space fields is also measured. The resulting table is

presented in the following graph.

The largest share in turnover comes from the sub-sector of land systems,

with $1.5 billion (34%). Aerial Systems sub-sector follows Land systems sub-

sector with sales of $1.3 billion. When civil aviation sales are added to

defence aviation systems, total aviation sub-sector sales reach $1.9 billion.

$4,174

$4,400

$4,800

$5,076

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

2010

2011

2012

2013

TABLE OF TOTAL TURNOVER (Billion $)

Years Total Turnover % Change

(Compared to 2009)

% Change

(Annual)

2009 $3,067

2010 $4,174 % 36.09 % 36.09

2011 $4,400 % 43.46 % 5.41

2012 $4,800 % 56.50 % 9.09

2013* $5,076 % 65.50 % 5.75

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As a result, the share of aviation systems sub-sector including space is

around 45% of the total sales.

The share of the maritime sub-sector in the total sales is approximately

13%. It is estimated that the reason for this low rate is due to the difficulties in

delivery of the main platforms.

We can see that the subject of space which has not been much of an

issue in the previous years began to get its share in the industry, although in a

limited scope. The success of this sub-sector, which requires very high

technology, is important for the whole industry.

2013 SALES GRAPH OF DEFENSE (IN TERMS OF SUB-SECTORS); CIVIL AVIATION;

SPACE

CIVIL AVIATION;

$608,724,329 ;

14%

SPACE;

$3,568,477 ;

0%

LAND (DEFENSE);

$1,543,596,192;

34%

MARITIME

(DEFENSE);

$613,268,060 ;

14%

AIR (DEFENSE);

$1,361,479,628 ;

30%OTHER;

$383,038,973 ; 8%

Note: Other means security and service (logistics) industry exports.

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4.2.1. Turnover Per Capita

The number of employees operating in the defence and aviation

industries and providing the specified turnover was 32,368. Yield per capita

based on the turnover of sub-sectors is shown in the below graph. According

to data, the highest yield is in aviation defence sub-sector with $168,715,

followed by civil aviation with $151,122. Considering that a main air platform

for sale is not produced in our industry yet, turnover per capita can be

assessed to result from spare parts production, job sharing due to joint

projects, maintenance, repair, innovations and offset-based operations.

There are also good signs for the future in the civil aviation sub-sector.

Turkey, who has future plans to make its own passenger plane, is observed

that it's improving its technological infrastructure in this area.

GRAPH OF SALES PER CAPITA OF DEFENSE (IN TERMS OF SUB-SECTORS); CIVIL

AVIATION; SPACE IN 2013

$151,122

$51,431

$114,165

$133,328

$168,715

$284,787

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000

CIVIL AVIATION

SPACE

LAND (DEFENSE)

MARITIME (DEFENSE)

AIR (DEFENSE)

OTHER Export of the security and service (logistics) sector.

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4.2.2. Shares of Sub-sectors in Total Turnover

We have stated that the companies, institutions, and organizations

operating under the SASAD framework, are grouped into 11 sub-sectors and

that we have prepared our performance report in this context. The share of

these sub-sectors in 2013 sales is shown in the chart below along with their

percentages. It is observed that the success in the field of electronics is

followed by space sub-sector, land platforms, arms ammunition rockets

missiles and naval platforms sub-sectors, respectively. When the shrinking

domestic and foreign markets are taken into consideration, the policies and

the strategies providing the sustainability in maritime and land sub-sectors

should be pursued as quickly as possible. On the other hand, increasing their

competitiveness in foreign markets alongside sustainability is considered

crucial for other sub-sectors.

GRAPH of the TURNOVER DISTRIBUTION ACCORDING to SUB-SECTORS in 2013

LAND PLATFORMS;

$500,235,205.95;

11%

NAVAL PLATFORMS;

224,780,278.72 $;

5%

AVIATION - SPACE;

$1,205,141,186.00;

27%

INFORMATICS;

$299,486,390.68; 7%

ELECTRIC &

ELECTRONICS;

$1,330,476,562.02;

29%

WEAPONS-

AMMUNITION

ROCKET MISSILE;

$583,550,128.11;

13%

R&D ENGINEERING;

$138,837,377.49;

3%

MATERIAL - MOLD -

SPARE PARTS;

$34,669,727.51; 1%

CLOTHING &

APPAREL;

$202,018,706.60; 4%

OTHER

MANUFACTURERS;

$6,559,324.00; 0%

RELATED

CORPORATIONS;

$126,237.05; 0%

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4.2.3. Direct Contribution Shares of Employees Working in Sub-

sectors to Their Relevant Sectors

The sub-sector's share in the total turnover and its number of employees,

generally show its direct contribution to the industry. Industry average for

turnover per capita was calculated at $156,821. Considering that calculating

this ratio is an important indicator in terms of employee productivity and

competitiveness in that sector, this ratio is also given in the below graph.

GRAPH of SALES REVENUE PER CAPITA of SUB-SECTORS in 2013

$92,379.53

$420,150.05

$149,744.18

$292,181.84

$229,934.30

$71,417.22

$103,071.54

$37,807.77

$229,306.13

$27,676.47

$21,039.50

$0.00 $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 $300,000.00 $350,000.00 $400,000.00 $450,000.00

LAND PLATFORMS

NAVAL PLATFORMS

AVIATION - SPACE

INFORMATICS

ELECTRIC & ELECTRONICS

WEAPONS AMMUNITION

ROCKET MISSILE

R&D ENGINEERING

MATERIAL - MOLD

- SPARE PARTS

CLOTHING & APPAREL

OTHER MANUFACTURERS

RELATED CORPORATIONS

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Note 1: The high turnover per capita of the naval platforms sub-sector is due

to the fact there is intensive subcontractor use in this sector and it is not

included in the number of employees.

Note 2: The reason for the low per capita turnover in the Weapons /

Ammunition sub-sector is the fact that the employees employed by the MKEK

in civil sales are not separated from the total number of employees and the

total number of employees is taken in determining the ratio.

Note 3: Defense and Aviation Industry World 2013 Sales Per Capita data is

presented below.

Highest: 364,994 $ Lowest: 253,787 $ Average: 317,580 $

Annual Employee Earnings (Including Tax, SS Premiums etc.)

ILO Data ($): USA..55,047; UK..44,222; France..39,600; Germany..42,121;

S.Korea..36,757; Israel..28,722; Italy..33,849; Czech Rep..20,487; Turkey..20,772.

Aviation & Defense Industry ($) : USA.. 80,175 , Turkey.. 34,750

European Union (2008) (Euro): France..68,800; UK..64,920; Germany..78,700;

Italy..52,700; Spain..53,300.

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5. ORDERS RECEIVED

In our 2013 survey, we opened a new chapter to try to assess the

workload of our companies and organizations over the coming years.

Considering the orders received in our industry on the basis of sub-sectors in

the graph below, it is predicted that the industry will continue its vitality in the

coming years. When the total new order amount of $8 billion received in the

year 2013 is compared to the annual turnover of our industry at $5,076 billion,

it is seen that a 1.5 years of work is readily taken in their order books.

When this comparison is made on the basis of the sub-major sectors; it is

seen that aviation and space have registered orders worth of 2.5 years in

order books in 2013, as well as orders worth of 2 months for informatics (due to

the fact that data cannot be obtained from one of the main players), 3 years

for electric-electronics, 9 months for arms ammunition rocket and 9 months for

naval platforms were also received.

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GRAPH of ORDERS RECEIVED IN 2013 ALLOCATED IN TERMS OF SUB-SECTORS

6. EXPORT

Turkish Defense and Aviation Industry exports reached $1,569 billion in

2013. According to Defense Industry Exporters Association, this value is seen as

$1.4 billion. The difference between the two figures is due to the addition of

the foreign currency that the firms earned for the services that they have

provided for various reasons such as maintenance, repair, modernization

engineering, to the export revenues by SaSaD.

Land Platforms;

391,243,508.01 $;

5%

Naval Platforms;

165,144,665.50 $;

2%

Aviation - Space;

3,131,620,743.33 $;

38%

Informatics;

40,674,412.68 $;

1%

Electrics and

Electronics;

3,714,567,787.89 $;

45%

Weapons-

Ammunition

Rocket Missile;

661,465,941.71 $;

8%

R&D Engineering;

64,604,599.51 $;

1%Material - Mold -

Spare parts;

22,132,914.79 $;

0%

Other

Manufacturers;

28,697,850.41 $;

0%

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One of the noteworthy things about the table is that exports have

increased in parallel and slightly above with the average turnover. This also

indicates that our industry has started to follow a growth trend based on

export.

Turkish Defense and Aviation Industry exports increased by 84%

compared to 2010, by 9.2% compared to 2012 based on SSIB data; by 24.3%

based on SaSaD data which includes foreign exchange generating services.

The diversity of the new indigenous systems that the industry players have

included in their product ranges and that these products have been taken

into the TAF(Turkish Armed Forces) inventory are considered to be important

factors in the increase in exports. The industry has now reached a state of

technology producing and exporting industry. The products and services that

enter the inventory of the Turkish Armed Forces are regarded highly in the

world market since they are accepted as products favored by a strong army

and proven in the operational settings.

The export performance of the Turkish Defense and Aviation Industries is

summarized in the following graphs and charts.

TABLE OF LAST 4 YEARS EXPORTS ($ MILLION)

Years Total Turnover % Change

(Compared to 2010)

% Change

(Annual)

2010 853 $

2011 1,100 $ % 28.96 % 28.96

2012 1,262 $ % 47.95 % 14.73

2013 1,570 $ % 84.02 % 24.38

2010 853 % Change Compared to 2010

2013 1,569 % 84

2012 (SSIB) 1,262 % of Change

2013 (SSIB) 1,391 According to 2012 SSIB 2013 SSIB: 10%

2013

(SaSaD) 1,569 According to 2012 SSIB 2013 SASAD: 24%

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TABLE OF TOTAL EXPORT REVENUES OF THE LAST 4 YEARS ($ MILLION)

From 2012 onwards Defense and Aviation Industry data is started to be

published by the Defense and Aviation Exporters Association according to the

industry's customs entry outwards. Although SaSaD uses this data, it also

includes foreign currency generating services in export figures of the

performance report. As a matter of fact, the total amount of exports

published by SSIB for 2013 is $1,391 billion.

SIPRI 2013 takes the countries' reports into account when ranking the first

15 countries in exports. Three different export declarations can be made in

these notifications. A large number of countries include the number of

invoices they have issued for exports as of the end of the relevant year, to

account for that year's exports. This is how it should be. Turkey is also making it

this way. But the two other countries along with Israel are reporting the

amount of the contracts they have signed for the following years as the

amount of export value. This situation is also not accepted by analysts who

prepare the report. The UK does not give export figures due to claiming that it

creates confusion, while China continues not to disclose at all. In SIPRI 2013,

Turkey takes place in the highest exporting countries list as one of the highest

15 countries. In 2013, exports accounted for 118% of the industry's total

imports. This rate was 89.7% in 2012.

$853

$1,100

$1,262

$1,570

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800

2010

2011

2012

2013

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2013 EXPORT DISTRIBUTION for CIVIL AVIATION, SPACE, LAND, SEA, AIR

SYSTEMS, OTHER (SECURITY AND LOGISTICS) SECTORS

SECTORS TOTAL EXPORTS

LAND PLATFORMS 220,497,556.04 USD

NAVAL PLATFORMS 27,826,385.00 USD

AVIATION - SPACE 904,558,480.00 USD

INFORMATICS 30,707,027.57 USD

ELECTRIC & ELECTRONICS 218,096,831.90 USD

WEAPONS-AMMUNITION ROCKET

MISSILE 122,164,191.14 USD

R&D ENGINEERING 6,021,038.35 USD

MATERIAL MOLD PARTS 8,691,326.97 USD

CLOTHING & APPAREL 27,150,582.35 USD

OTHER MANUFACTURERS 3,969,405.00 USD

TOTAL 1,569,682,824.33 USD

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GRAPH OF THE 2013 EXPORT DISTRIBUTION OF SUB-SECTORS

As can be seen clearly in the above graph, the largest share of exports

belongs to the aviation and space sub-sector. Land platforms, electric-

electronics, and weapons ammunition rocket/missile sub-sectors are following

the aviation and space sector.

Turkey; is successfully running the programs of ANKA Unmanned Aerial

Vehicle which is in the production stage within the scope of air platforms,

Hürkuş Trainer Aircraft, T-129 Attack Helicopter which is co-produced with

Drones and Göktürk Series Satellite programs. Although all these products are

still waiting to be included in the export portfolio, a very sensitive area such as

aviation and space has been captured with a significant export potential, by

the existing strong and advanced technology infrastructure.

LAND PLATFORMS;

220,497,556.04 $;

14%

SPACE;

4,426,435 $ ;

26%

AVIATION - SPACE;

904,558,480.00 $;

58%

INFORMATICS;

30,707,027.57 $;

2%

ELECTRICS and

ELECTRONICS;

218,096,831.90 $;

14%

WEAPONS-

AMMUNITION

ROCKET MISSILE;

122,164,191.14 $;

8%

R&D ENGINEERING;

6,021,038.35 USD;

0%MATERIAL - MOLD -

SPARE PARTS;

8,691,326.97 USD;

0%

CLOTHING &

APPAREL;

27,150,582.35 $;

2%

OTHER

MANUFACTURERS;

3,969,405.00 $; 0%

RELATED

CORPORATIONS;

0,00 $; 0%

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In the graph below, individual sub-sectors' per-capita export revenues

are shown. Aviation and space sub-sector is still the one with highest per

capita export revenue. The added value of superior technology production

makes a significant difference for the industry when compared to other

industries.

2013 GRAPH OF PER CAPITA EXPORTS OF SUBSECTORS

6.1. Distribution of Export

What is noteworthy in exports is that Non-European sales are increased

by 137% compared to the previous year. In this increase, the share of sales to

USA and Gulf countries in aviation is significant.

$40,719.77

$52,011.93

$112,395.44

$29,958.08

$37,691.72

$14,950.95

$4,469.96

$9,478.00

$30,817.91

$16,748.54

$0.00 $20,000.00 $40,000.00 $60,000.00 $80,000.00 $100,000.00 $120,000.00

1. LAND PLATFORMS

2. NAVAL PLATFORMS

3. AVIATION - SPACE

4. INFORMATICS

5. ELECTRIC & ELECTRONICS

6. WEAPONS-AMMUNITION

ROCKET MISSILE

7. R&D ENGINEERING

8. MATERIAL - MOLD

- SPARE PARTS

9. CLOTHING & APPAREL

10. OTHER MANUFACTURERS

11. RELATED CORPORATIONS

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While cutbacks in defense spending in developed countries is bringing a

reduction in new platform production; the spending is oriented towards

maintenance, renovation, and modernization of the systems that are

currently in the inventory of world armies. It should be expected that these

issues will be the sought-after capabilities of the markets. There are significant

leaps in unmanned aerial vehicles in the field of civil aviation and space, in

the world markets and it is assessed that this expansion trend will continue.

While these become the new favorites of the industry market, logistics

(service/maintenance) is standing out as another developing area. The

industry has succeeded in marketing its new products and developing

technological capability. It must support its activities in this direction with;

logistics support to the systems accepted into the inventory as well as

development of their performance and civil aviation and space services.

2011 EXPORT DISTRIBUTION ($ MILLION)

Years Europe Non - Europe

2011 694 $ 395 $

523 € 297 €

2011 EXPORT DISTRIBUTION

Europe

64%

Non - Europe

36%

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Exports to Europe and western countries generally focus on sub-systems

and informatics fields. It is noted that system-level products constitute the

sales to the Gulf and Central Asia etc. countries. The persistent

implementation of offset applications in public procurement has led to

positive developments in the exports of the defense and especially aviation

sectors and it will continue to do so in the future.

It is noted that $694 million worth of 2011 exports were made to Europe.

When it comes to 2012, it was seen that exports to Europe have fallen by half.

As a consequence, naturally, Non-Europe exports are observed to be

increasing. For the significant part of our exports to Europe and the USA, in

fact for almost all of it; the sub-systems and machine molds, spare parts, as

well as software-oriented products are at the forefront and moreover most of

the exports are offset-based goods and services. This situation did not change

in 2013.

2012 EXPORT DISTRIBUTION (Million)


2012 325 $ 937 $

245 € 706 €


Europe

26%

Non - Europe

74%

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2013 336 $ 1,233 $

253 € 928 €


Europe

21%

Non - Europe

79%

24



Years Europe USA Other

2013 336 $ 680 $ 554 $

253 € 512 € 417 €


7. IMPORTS

A decrease of 6% is observed in the imports of the year 2013 compared

to the imports of 2012. In fact, the goods and services imported are more

important than the import figures. Turkey today, has to import the power units

in all the main sectors. A large part of the import items is in this scope. The

second type of imports is qualified materials (sensors/detectors / special

alloys, metals, chemicals, etc.) and semi-finished products and finished goods

are also important items in our imports. However, exports account for 118% of

the industry's total imports and this is an important assessment.

Europe

21%

USA

43%

Other

36%

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TABLE OF TOTAL IMPORTS FOR THE LAST 2 YEARS ($ MILLION)

Years Total Turnover % Change (Compared to 2012) % Change (Annual)

2012 1,409 $

2013 1,327 $ -6% -6%

TABLE OF TOTAL IMPORTS FOR THE LAST 2 YEARS ($ MILLION)

7.1. Distribution of Imports According to Sub-sectors

Each sub-sector imports is included in the graph. Although the details of

imports are not seen, the imported goods change according to the nature of

the sub-sector. Our imports continue in a balanced manner, in a wide

spectrum ranging from power units to special alloy metals, qualified raw

materials, and semi-finished products.

1407

1327

1280 1300 1320 1340 1360 1380 1400 1420

2012

2013

26


IMPORT DISTRIBUTION ACCORDING TO SUB-SECTORS

8. PRODUCT AND TECHNOLOGY DEVELOPMENT

In the period from 1985 to this day, Turkey has become one of the most

important centers of power today thanks to a huge mobilization of Defense

and Aviation Industry. While continuing its efforts to meet the needs of the

Armed Forces in Turkey with products which are produced with high domestic

contribution and indigenous technology, its contribution to the country's

economy is direct and maximal. There are significant improvements taking

place with all firms in the industry, large and small, as well as with government

incentives and support. Thanks to enacted incentive laws, set up

Technocities, university, and industry collaboration studies, the industry started

to have a voice in the overseas markets.

LAND PLATFORMS;

160.141.973,17 $;

12%

NAVAL PLATFORMS;

56,954,612.70 $;

4%

AVIATION - SPACE;

543,218,527.63 $;

41% INFORMATICS;

11,723,368.57 USD;

1%

ELECTRIC &

ELECTRONICS;

355,282,408.16 $;

27%

WEAPONS-

AMMUNITION

ROCKET MISSILE;

124,122,558.54 $;

9%R&D ENGINEERING;

8,679,191.13 $;

1%

MATERIAL MOLD

PARTS;

2,066,701.67;

0%

CLOTHING &

APPAREL;

62,766,709.50 $;

5%

OTHER

MANUFACTURERS;

1,888,574.55 $; 0%

RELATED

CORPORATIONS;

0,00 $; 0%

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Defense and Aviation Industry is the one with the highest product and

technology development expenditure among all industries of our country.

In 2012, $772 million was spent on product and technology development

in the industry, with approximately $200 million financed from equity sources.

This number is equivalent to 16% of the total turnover. In 2013, the expenditure

amount in this context was realized at $927 million, which amount to 18% of

2013 sales revenues (turnover). A product and technology development

expenditure on this scale makes a significant difference for the industry when

compared to other industries. Total product and technology development

expenditure per capita was calculated as $29,186.

When we consider the turnover and export results, it is clear that we are

in the right direction in terms of investments since the support and incentives

made to product and technology development expenditures as well as

expenditures made from equity helped our industry to develop much needed

indigenous products and technologies.

In the charts and graphs presented below, the developments in this area

are demonstrated with figures. Technocities and product and technology

development centers supported by our government directly affect the

development and future of the industry which has already become highly

concentrated in product and technology developments.

Product and technology development expenditures in terms of equity

and project support in the last four years are presented in the following graph.

TABLE PRODUCT AND TECHNOLOGY DEVELOPMENT EXPENDITURES

FOR THE LAST 4 YEARS ($ Million)

Years PRODUCT AND

TECHNOLOGY

DEVELOPMENT (EQUITY)

PRODUCT AND

TECHNOLOGY

DEVELOPMENT

(PROJECT INCENTIVES)

TOTAL PRODUCT

AND

TECHNOLOGY

DEVELOPMENT

2010 143 $ 523 $ 666 $

2011 221 $ 451 $ 672 $

2012 200 $ 572 $ 772 $

2013 237 $ 690 $ 927 $

28


GRAPH OF PRODUCT AND TECHNOLOGY DEVELOPMENT EXPENDITURES FOR THE

LAST 4 YEARS ($ MILLION)

In the last 4 years, per capita equity and project support expenditures

are shown in the below table. As you can see from the tables above and

below, both total and per capita equity product and technology

development expenditures show a significant increase (66%). This rate is 32%

in R&D expenditures supported with projects.

TABLE OF PER CAPITA PRODUCT AND TECHNOLOGY DEVELOPMENT

EXPENDITURES FOR THE LAST 4 YEARS

Years

PRODUCT AND

TECHNOLOGY

DEVELOPMENT

(EQUITY)

PRODUCT AND

TECHNOLOGY

DEVELOPMENT

(PROJECT INCENTIVES)

TOTAL PRODUCT AND

TECHNOLOGY DEVELOPMENT

2010 4,503 $ 16,470 $ 20,973 $

2011 6,960 $ 14,202 $ 21,162 $

2012 6,298 $ 18,013 $ 24,311 $

2013 7,461 $ 21,726 $ 29,186 $

$143

$221

$200

$238

$523

$451

$572

$690

$666

$672

$772

$928

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

2010

2011

2012

2013

Total With Project Incentives With Equity

29


GRAPH OF PER CAPITA PRODUCT AND TECHNOLOGY DEVELOPMENT

EXPENDITURES FOR THE LAST 4 YEARS

Sub-sector R&D expenditure per capita is shown in the following graph.

Typically the largest expenditure belongs to aviation and space sub-sector.

Turkey has the potential to provide significant development in the aviation

and space field, as shown with this indicator.

Product and technology development expenditure distribution on the

basis of the sub-sectors is given in the graph below. The highest share belongs

to electric-electronics sub-sector, followed by the weapons and ammunition

in second place.

$4,418

$6,828

$6,179

$7,353

$16,158

$13,933

$17,672

$21,325

$20,576

$20,761

$23,850

$28,678

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

2010

2011

2012

2013

Total With Project Incentives With Equity

30


8.1. Product Development

GRAPH OF 2013 PRODUCT DEVELOPMENT DISTRIBUTION ACCORDING TO SUB-

SECTORS

8.2. Technology Development

Turkey stepped up its Defense and Aviation Industrial Technology

Development activities. Turkey will take its place in the top rankings of

product and technology exporting countries in the next 10 years, by directing

its experience gained in system development to subsystem components and

technology development. As of 2013, SaSaD started to track its members'

technology development efforts and keep a record of statistics on

expenditures in this field. To give you an idea about technology development

activities, the below graph is presenting expenditure information in this field.

LAND PLATFORMS;

111,409,329.48 $;

13%

NAVAL PLATFORMS;

$3,477,468.93 ;

0%

AVIATION - SPACE;

$115,812,852.72 ;

14%

INFORMATICS;

9,349,040.92 $ ;

1%

ELECTRIC &

ELECTRONICS;

367,673,996.96 $;

44%

WEAPONS

AMMUNITION

ROCKET MISSILE;

222,762,900.21 $ ;

27%

R&D ENGINEERING;

$4,881,413.58 ; 1%

MATERIAL - MOLD -

SPARE PARTS;

$1,061,926.36 ; 0%

RELATED

CORPORATIONS;

$195,421.47 ;

0%

31


GRAPH OF 2013 TECHNOLOGY DEVELOPMENT EXPENDITURE DISTRIBUTION

LAND PLATFORMS;

$- ; 0%

NAVAL PLATFORMS;

$- ; 0%

AVIATION - SPACE;

$5,674,392.40; 6%

INFORMATICS;

$2,317,782.46 $ ;

3%

ELECTRIC &

ELECTRONICS;

47,590,810.78 $ ;

53%

WEAPONS-

AMMUNITION

ROCKET MISSILE;

30,145,582.95 $ ;

34%R&D ENGINEERING;

$2,998,790.48; 3%

MATERIAL - MOLD -

SPARE PARTS;

$832,903.65; 1%

RELATED

CORPORATIONS; $-

; 0%

32


9. EMPLOYMENT

According to the information received from our companies, this performance

was achieved with 32,368 employees. The numbers of people working in the

11 sub-sectors are listed in the following table.

TABLE OF EMPLOYMENT DISTRIBUTION BY SECTOR

SECTORS İ EMPLOYMENT

LAND PLATFORMS 5,415 People

NAVAL PLATFORMS 535 People

AVIATION - SPACE 8,048 People

INFORMATICS 1,025 People

ELECTRIC & ELECTRONICS 5,786 People

WEAPONS-AMMUNITION ROCKET

MISSILE 8,171 People

R&D ENGINEERING 1,347 People

MATERIAL - MOLD - SPARE PARTS 917 People

CLOTHING & APPAREL 881 People

OTHER MANUFACTURERS 237 People

RELATED CORPORATIONS 6 People

TOTAL : 32,368 People

EMPLOYEE PROFILE OF 2013

ENGINEER 11,662

OTHER DEPARTMENTS (UNIVERSITY) 3,715

TECHNICAL OPERATOR 10,791

OTHER 6,199

33


EMPLOYEE PROFILE OF 2013

CIVIL

AVIATION SPACE LAND MARINE AIR OTHER

4,028 69 13,679 4,681 8,189 232 1,470 21

4,028 69 13,679 4,681 8,189 1,723

ENGINEER; 11662;

36%

OTHER

DEPARTMENTS

(UNIVERSITY);

3715; 12% TECHNICAL

OPERATOR;

10791; 33%

OTHER; 6199; 19%

TOTAL INDUSTRY EMPLOYMENT IN THE LAST 2 YEARS

Years

2012 33,491 People

2013 32,368 People

34


GRAPH OF 2013 SUB-SECTORS EMPLOYMENT

33,491 32,368

0

5000

10000

15000

20000

25000

30000

35000

40000

2012 2013

LAND PLATFORMS;

5415; 17%

NAVAL PLATFORMS;

535; 1%

AVIATION - SPACE;

8048; 25%

INFORMATICS;

1025; 3%ELECTRICS AND

ELECTRONICS; 5786;

18%

WEAPONS-

AMMUNITION ROCKET

MISSILE;

8171; 25%

R&D ENGINEERING;

1347; 4%MATERIALS-MOLD;

917; 3%

CLOTHING &

APPAREL;

881; 3%

OTHER

MANUFACTURERS;

237; 1%

RELATED

CORPORATIONS;

6; 0%

35


GRAPH of 2013 EMPLOYMENT IN DEFENSE (BY SUB-SECTOR);

CIVIL AVIATION; SPACE

CIVIL AVIATION;

4028; 13%

SPACE; 69;

0%

LAND; 13679;

42%

MARINE; 4681;

15%

AIR; 8189;

25%OTHER; 1723;

5%

36


10. GENERAL OVERVIEW:

As a result of the collective evaluation of the industry performance data above; the

following assessments are made.

1- The industry continues its development trend.

2- The increase in total sales was slightly lower than in other years. At first glance,

it can be assessed that delays in the group acceptance stage of the products,

which are ready for delivery and billing, led to this result. But similar problems,

in terms of different sales amounts, reoccur each year. Therefore; it is

necessary to analyze this issue in depth from the perspective of the

sustainability of the competencies gained by the industry to identify causes

and define measures.

3- Development in exports is considered to be positive. It is assessed that the

industrialists of the developed western countries will enter into a new quest

and will begin to take a more active role in emerging markets due to

narrowing of the resources in their defense budgets. This reveals that the

players of the industry will face a wider and more intense competition in these

markets in the coming periods. For this reason, it is assessed that for expanding

the range of sellable products and entering the market with more affordable

prices (despite the positive development in per capita production, it is still

below world values of values of 250-360 thousand US Dollars which may

constitute an obstacle.); it is necessary to be ready for technology transfer,

have a positive attitude for local contribution/offset demands, make

advancements in forming partnerships (joint venture) and engage in intensive

business development/marketing.

4- In the short to medium term, it is expected that there will be the high demand

in civil aviation and compel the existing production capacity, thus there will

be a need for new players to enter the supplier list. The positive development

which began in civil aviation will probably grow exponentially and we suggest

that our members take note of this area in particular.

5- Also, unmanned aerial vehicles, helicopters, satellite (communications,

intelligence) intelligent cities/homeland security (including cybersecurity),

modernization of marine systems and land systems, precision munitions,/big

data issues, will continue to take place in the list of searched

products/services, in the short/medium term.


37


6- It is observed that positive steps have been taken on external dependency

and the import expenditure has a tendency to decrease. In this context,

attention should be paid to the design and use of inputs outside the supply

control of export sources to reduce external dependency (Use of COTS

products) and it is crucial to focus on subsystem, component, and

technology development efforts for producing the critical inputs

domestically and to increase the allocation of equity and project support to

this area.

7- It seems that our industry players, who are in the position of integrators and

have the ability to market platforms and systems, did not yet reach sufficient

size as compared to the world companies that they will compete with. It is

suggested that since growth is an indispensable prerequisite for active

competition, necessary arrangements and measures should be taken.

The assessment of these data shows that in order to reach the objectives

declared by Turkish Defense and Aviation Industry, the strategies and policies

related to the above matters should be reviewed and any possible measure must

be immediately taken. As of this year, all the players of the industry should take

more concrete and realistic steps in sustainability and enhancing competition in

foreign markets.


38


11. COMPANIES CONTRIBUTING TO PERFORMANCE DATA

1. SELEX ES Elektronik TURKEY A.Ş.

2. AKANA Mühendislik ve Ticaret Ltd. Şti.

3. ALP HAVACILIK SANAYİ VE TİCARET AŞ.

4. ANOVA PROJE VE DANIŞMANLIK TİC. LTD. ŞTİ.

5. ASELSAN A.Ş.

6. AYDIN YAZILIM VE ELEKTRONİK SANAYİ A.Ş

7. BİTES Savunma Havacılık ve Uzay Teknolojileri Ltd. Şti

8. C TECH Bilişim Teknolojileri San. Ve Tic. A.Ş

9. DELTA ELEKTRONİK TİCARET VE SANAYİ LİMİTED ŞİRKETİ

10. DESAN SHIPYARD A.Ş.

11. ESEN SİSTEM

12. ETA ELEKTRONİK TASARIM SANAYİ VE TİCARET A.Ş.

13. ETC

14. FNSS SAVUNMA SİSTEMLERİ A.Ş.

15. GATE ELEKTRONİK San. ve Tic. A.Ş.

16. HST OTOMOTİV İMALAT SANAYİ VE TİCARET A.Ş.

17. İSTANBUL DENİZCİLİK GEMİ İNŞA SAN. VE TİC. A.Ş.

18. İŞBİR ELEKTRİK SANAYİ A.Ş.

19. KOLUMAN MOTORLU Araçlar Ticaret ve Sanayi A.Ş.

20. MERCEDES-BENZ TÜRK A.Ş.

21. MİKES A.Ş.

22. NUROL TEKNOLOJİ SAN. VE MADENCİLİK TİC. A.Ş

23. ODAK KOMPOZİT TEKNOLOJİLERİ A.Ş.

24. OTOKAR OTOMOTİV VE SAVUNMA SAN. A.Ş.

25. Pİ MAKİNA A.Ş.

26. REPKON MAKİNA VE KALIP SANAYİ VE TİCARET A.Ş.

27. SDT Uzay ve Savunma Teknolojileri A.Ş

28. TEI - TUSAŞ Motor Sanayii A.Ş.

29. TUSAŞ-TÜRK HAVACILIK VE UZAY SANAYİİ A.Ş.

30. ALTAY KOLLEKTİF ŞİRKETLER DURAL VE ORT.

31. ATEL TEKNOLOJİ VE SAVUNMA SANAYİİ A.Ş.

32. AVS SARACİYE TEKSTİL KONFEKSİYON

33. ESDAŞ ELEKTRONİK SİSTEMLER DESTEK SANAYİ VE TİCARET A.Ş.

34. FİGES FİZİK VE GEOMETRİDE BİLGİSAYAR SİMÜLASYONU A.Ş.

35. GATE Elektronik San. ve Tic. A.Ş.

36. GİRSAN MAKİNE ve HAFİF SİLAH SANAYİ A.Ş.

37. GLOBAL TEKNİK A.Ş.

39


38. HAVELSAN TEKNO RADAR A.Ş.

39. HAVELSAN A.Ş.

40. İSTANBUL DENİZCİLİK GEMİ İNŞA SAN. VE TİC. A.Ş.

41. KOÇ BİLGİ VE SAVUNMA TEKNOLOJİLERİ A.Ş.

42. KRL Bilgisayar Ltd. Şti.

43. MEGE TEKNIK A.Ş.

44. METEKSAN SAVUNMA SANAYİİ A.Ş.

45. MİLPER PERVANE Teknolojileri A.Ş.

46. MİLSOFT YAZILIM TEKNOLOJİLERİ A.Ş.

47. MKEK

48. NUROL MAKİNA A.Ş.

49. OTOKAR OTOMOTİV VE SAVUNMA SAN. A.Ş.

50. ÖZTİRYAKİLER MADENİ EŞYA SAN. ve TİC. A.Ş

51. ROKETSAN ROKET SANAYİİ VE TİCARET A.Ş.

52. SAMSUN YURT SAVUNMA Sanayi ve Ticaret A.Ş.

53. SAVUNMA TEKNOLOJİLERİ MÜHENDİSLİK ve Danışmanlık A.Ş.

54. ŞENER OTOMOTİV YEDEK PARÇA MAK. SAN. VE TİC. LTD. ŞTİ.

55. TEKNO KAUÇUK SANAYİİ A.Ş.

56. TEKNODROM ROBOTİK ve OTOMASYON SAN. TİC. A.Ş.

57. AEROTİM MÜHENDİSLİK YAZILIM DANIŞMANLIK TİC.SAN. LTD. ŞTİ.

58. TİSAŞ TRABZON SİLAH SANAYİ A.Ş

59. TRANSVARO A.Ş.

60. TURAÇ DIŞ TİCARET LTD. ŞTİ.

61. TÜBİTAK MAM

62. TÜBİTAK SAGE

63. YAKUPOĞLU TEKSTİL VE DERİ SAN. TİC. A.Ş.

64. YALTES ELEKTRONİK VE BİLGİ SİSTEMLERİ ÜRETİM VE TİCARET A.Ş.

65. YONCA - ONUK ADİ ORTAKLIĞI

40


Notes:

41


Notes:

defense and aerospace manufacturers association · defense and aviation industries association...

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