Turkey’s defense industry eyes export expansion as government navigates geopolitical scene

ANKARA, Turkey – Turkey’s defense and aerospace sales have increased tenfold over the past two decades as the sector’s export business grew by nearly 1,200 percent, according to data released May 3 by one of the industry‘s umbrella organizations in the country.

Sales in 2002 were equivalent to approximately $1 billion and annual exports were approximately $248 million. But in 2021, Turkey’s defense and aerospace sales reached $10.1 billion and exports totaled $3.2 billion, surpassing $2.6 billion in imports, reported the Defense Industry Manufacturers Association.

And Turkish companies won new orders worth $8.5 billion in the same year, during which the industry employed 75,000 people and spent $1.6 billion on research and development, found association.

“These numbers speak for themselves. It’s a story of dramatic growth,” said Ozgur Eksi, defense analyst at Ankara. “Over the past two decades, Turkish engineering has achieved several milestones with indigenous solutions, which then paved the way for lucrative export contracts.”

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Additionally, Turkey’s defense and aerospace exports in the first half of 2022 hit a record high of nearly $2 billion, up 48% from the same period in 2021, official statistics revealed. July 19. According to the Assembly of Turkish Exporters, exports could approach or exceed the $4 billion mark by the end of 2022, an all-time high for the year.

Drone Deals

“The rise in exports, which came after two years of decline during the pandemic in 2020 and 2021, should be attributed primarily to aerospace, and home-built drones in particular,” Eksi told Defense News. “These figures tell us that Turkish industry’s dependence on local sales is decreasing and that exports are helping Turkish companies become self-sufficient.

Ukraine, for example, has become a regular buyer of Bayraktar TB2 drones, produced by the Turkish company Baykar. Drone deliveries began before Russia invaded Ukraine on February 24, but have continued since. In May, Kyiv received 12 TB2s and associated operating systems, then ordered another 24.

In total, Turkey has supplied 96 TB2 drones worldwide, including to Poland, the first European customer. Two government officials working on defense industry exports told Defense News that potential buyers include the UK, Hungary, Latvia, Lithuania, Saudi Arabia, Bosnia and Herzegovina, Serbia , Slovakia, Uruguay and Albania.

In 2019, the drone maker partnered with Ukrainian state arms export organization Ukrspecexport to work on drone technology in the country. Through this relationship, Baykar hoped to source from Ukraine MS-500V-S family turboprops which generate 950 to 1,050 brake horsepower as well as AI-450C series turboprops which provide 450 to 630 brake horsepower. brake for the Akinci drone.

In 2021, Baykar secured land in Ukraine to build a test, training and maintenance center and a TB2 drone systems factory. But Russia’s February 24 invasion of Ukraine stalled those plans.

Although the company did not disclose the exact location of its planned project, citing security concerns, industry sources told Defense News that the land was around Kharkiv and Donetsk, which were the target of Russian attacks.

“Such co-production plans between Turkey and Ukraine have been postponed indefinitely. Significant delays are to be expected, and in some cases it can take years,” depending on how the Russian invasion unfolds, Eksi said.

Central Asia is also becoming another market for the TB2. Last year, Kyrgyzstan signed a deal to buy the armed drone, becoming the first country in Central Asia to buy the system, although it’s unclear how many have been ordered.

In May 2022, Turkey and Kazakhstan agreed to co-produce Turkish drones which the Central Asian country purchased in 2021. The Anka, made by Turkish Aerospace Industries, will be jointly produced at a factory in Kazakhstan, which officials plan to open in late 2022 or early 2023. TAI was ranked 67th in this year’s Top 100 list, along with two other Turkish companies: Aselsan at 49th and Roketsan at 86th.

Also in May, reports surfaced that Tajikistan, another Central Asian country, had bought the TB2, with neighboring Kyrgyzstan expressing concern amid an arms race between the two countries.

More recently, Turkey’s Ambassador to Bangladesh, Osman Turan, said on July 25 that the Dhaka government and Baykar have agreed on contractual terms for the sale of TB2 to the Asian nation. The ambassador did not provide a quantity or contract value.

By air, land and sea

While Africa is a new market for Turkish defense companies, defense and aerospace exports to the continent are increasing from $83 million in 2020 to $288 million in 2021. Turkish companies have sold various equipment and armored vehicles to 14 African countries: Burkina Faso, Algeria, Chad, Morocco, Ghana, Kenya, Mali, Mauritania, Niger, Nigeria, Senegal, Somalia, Rwanda and Uganda.

“Threats of terror, growing geopolitical rivalry [and] growing conflict zones have dictated a significant increase in defense spending in Africa, providing, among other things, export opportunities for Turkish manufacturers,” wrote Mursel Bayram, associate professor at Ankara University of Social Sciences.

For its part, Nurol Makina, which manufactures the Yoruk and Ejder Yalcin four-wheel drive tactical armored vehicles, has sold its products in 18 countries, from Chile to Malaysia and from Senegal to Uzbekistan.

The two vehicles entered the inventory of Hungary, a member of the European Union and NATO, in September 2019, and the company announced in March 2022 its debut on the European market by opening a site in the country . Nurol Managing Director Engin Aykol said the new facility aims to create solutions specifically for the Hungarian Land Forces.

Also in March, Nurol delivered 40 Gidran tactical wheeled armored vehicles to Hungary, and another 100 are to be produced there. Gidran is the name given to Nurol’s Ejder Yalçın mine-resistant and ambush-protected vehicle, which is used by the Turkish military.

The Turkish maritime market has also made strides in Ukraine. In November 2020, the two countries signed an industrial cooperation agreement, under which Turkey started construction of the first Ada-class corvette for Ukraine in 2021, with delivery scheduled for 2023. A second Ada-class corvette Ada is to be built by Ukrainian shipyard OKEAN. .

However, diplomatic problems are slowing down some of Turkey’s programs and putting an end to export deals.

In 2018, Pakistan selected the Turkish T129 attack helicopter to replace its fleet of AH-1F Cobra gunships acquired in the 1980s. Pakistan signed a $1.5 billion contract with TAI for 30 T129 helicopters; however, the deal did not progress as the T129 engine is a joint US-UK product which requires export licenses before delivery can take place.

The 5-ton T129 is a twin-engine multirole helicopter produced under license from the Italian-British company AgustaWestland and based on the A129 Mangusta. It is powered by two LHTEC T800-4A turboshaft engines, each capable of producing 1,014 kilowatts of power output.

The T800-4A is an export version of the CTS800 engine. LHTEC, the engine manufacturer, is a joint venture between the American company Honeywell and the British company Rolls-Royce.

US lawmakers quietly froze all major US arms sales to NATO ally Turkey for nearly two years, Defense News reported in August 2020, to pressure Ankara into abandoning its Russian-made S-400 surface-to-air defense system, but Turkey’s government has yet to do so.

Nonetheless, Turkey and the Philippines announced in May 2021 that TAI would export six T129 helicopters to the Asian nation without US restrictions; almost a year later, in March, the Philippines received the first two aircraft, with the remaining four expected to be delivered in 2023.

Last month, TAI announced new agreements to export six T129s to Nigeria. The company also announced the sale of an unspecified batch of its Hurkus HYEU, an advanced version of the Hurkus basic trainer aircraft, to Chad.

TAI has already sold two HYEU platforms to Niger and is currently competing to sell 18 to the Malaysian military. TAI declined to comment on the contract value for the Nigerian and Chadian agreements, and it would not provide a quantity for the aircraft agreement with Chad.

Southeast Asia has also served as a market for Turkish radar technology. A procurement official from the Turkish Presidency of Defense Industries said negotiations between the state-controlled defense organization ASFAT and the Philippine government reached a final stage in April for Turkish-made offshore patrol boats. The source said Turkey is planning a $600 million contract for the export deal.

Burak Ege Bekdil is Turkey correspondent for Defense News. He has written for Hurriyet Daily News and worked as Ankara bureau chief for Dow Jones Newswires and CNBC-e television. He is also a member of the Middle East Forum and writes regularly for the Middle East Quarterly and the Gatestone Institute.

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