Interview: Selçuk Yaşar, President and CEO of ROKETSAN – MSI Turkish Defence Review / MSI TDR Reference Magazine of Turkish Defence and Aviation Industry

Interview: Selçuk Yaşar, President and CEO of ROKETSAN

6 Haziran 2017
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“We keep making a difference through our innovative and unique products.”

 

As one of the industry’s most energetic companies in recent times, thanks to the new products it is offering its customers, ROKETSAN is taking part in IDEF 2017 with its ever-growing product family. Selçuk Yaşar, President and CEO of ROKETSAN, spoke to MSI TDR about how they develop their products, the current status with these products, and their plans for the future.

 

MSI TDR: ROKETSAN works on a broad spectrum of products that covers different needs. Some of these are not shared with the public for confidentiality reasons, although we can sometimes find hints and clues about them in documents that are made public, such as the SSM’s reports. Could you tell us – without going into too much detail – about this large product family, in broad terms, such as how many members it has and their areas of application?

Selçuk YAŞAR: We express ROKETSAN’s vision using these words: “To become a leading organisation in rocket and missile systems, from the depths of the sea all the way to space”, and we’re continuing to work successfully in line with this vision.

ROKETSAN’s first products were the 107 mm and 122 mm artillery rockets. These systems were generally used throughout the world; however, our difference is that we were the first to use composite solid fuel in them. We delivered these systems both to the Turkish Armed Forces (TAF) and to our customers overseas. Twenty-one years have passed since then, and ROKETSAN still pursues innovative and unique products. We keep making a difference through our innovative and unique products.

In the category of artillery rocket products, we later produced the KASIRGA rocket and YILDIRIM missile. We developed the JOBARIA for the United Arab Emirates (UAE), for which there is no comparable example in the world. We also developed the guided version of the KASIRGA, making our first delivery last year. Next, we’re working on the guided version of the 122 mm, for which we’re about to complete the qualifications process. It’s a product we developed ourselves, by being proactive. Once it’s ready, we initially expect to receive orders from the TAF.

During this entire process, we developed different warheads and fuses for our rockets and missiles.

In the area of artillery rockets, somewhere between the KASIRGA and the 122 mm, we’re thinking about developing a low-cost guided system, with a range of approximately 60-70 km.

Our work on air-to-surface tactical missiles first began with the CİRİT. The qualification for the CİRİT was completed in 2011, and the system was both delivered to the TAF and exported. We’ve also completed the qualification process for our UMTAS and OMTAS anti-tank missiles. Using our own resources, we also developed the laser-guided L-UMTAS missile. Another variant product we’ve also qualified in 2016 is the Smart Micro Munitions (MAM). The MAM-L, a variant of the L-UMTAS, is a currently used product with great export potential. Qualification work is also ongoing for the MAM-C, a variant of the CİRİT.

Our laser guidance kit, TEBER, will be entering serial production this year. We expect substantial orders for this product both in Turkey and from overseas; we’re continuing to hold talks about potential orders. This is also a product we developed through our own resources.

Our state has assigned a range of tasks to us, and we’re conducting projects in accordance with these tasks. ROKETSAN is continuing to work on creating competent product families in its areas of interest.

 

MSI TDR: A quick look reveals that a large portion of ROKETSAN’s new products have been developed using its own resources. Could you tell us about your approach towards developing new products?

Selçuk YAŞAR: ROKETSAN is a company that is constantly increasing its turnover and making a profit. As we develop new products, we’re frequently in contact with the TAF. We’re trying to understand their needs and approach them proactively. There are three points we highlight in our approach:

  1. Being innovative,
  2. Engaging in development activities with our own resources when need be, and
  3. Acting fast.

Therefore, most of the time, we can consult with the TAF and develop innovative products with advanced technologies, depending on the existing needs, without having to wait for the launch of an official project. We believe that we’ve been successful in this. For us, the criteria for success are having the products used by the Armed Forces, and ensuring they are innovative, indigenous and national. All ROKETSAN products are indigenous and national, so we can change the products’ software and hardware without having to ask anyone.

In addition to the products it has developed as part of the tasks it was assigned with, ROKETSAN has also produced at least as many products using its own resources. In this context, in 2016, we delivered the MAM-L in the same month we signed its contract. This, you see, is very important: The MAM-L did not have its own development contract, and the contract we signed was the first for the MAM-L. This is a highly uncommon situation for the Turkish defence and aerospace industry, and may even be a first. But of course, to accomplish a feat such as this one, you need to make some serious preparations beforehand. With the authority granted to us by our Executive Board, we had already purchased the materials and started production. This allowed us to make the deliveries as soon as the contracts were signed.

In fact, I’d like to speak a little more about this development process. To come up with a product, you must first prepare its subsystems. For example, when we first started working on the CİRİT, UMTAS and OMTAS about ten years ago, we didn’t have many of the subsystems we needed. So we developed a considerable portion of them through our own projects. That’s why the development of these products took more time. But once the subsystems are ready, you can develop a product very quickly.

We do have our road maps for subsystems. We make predictions about what kind of technology we’ll need in 5 or 10 years’ time, and make investments with our own resources. For some of these investments we submit project proposals to the state in order to receive support. This allows us to shorten development processes that normally take seven or eight years to about three or four years.

 

MSI TDR: How is this general picture you’ve described, regarding the development process, mirrored in your export activities?

Selçuk YAŞAR: When developing products, we act proactively, often in a groundbreaking way. But in the end, the resulting products also need to be cost effective. That’s because supplying them to the TAF is not sufficient. A country’s armed forces can opt to purchase products from a domestic company even if they are expensive, or insufficient in terms of capabilities. So the place where you can make a realistic comparison between products is the international markets. That’s why, for us, the main criterion for success is being able to compete abroad.

Another aspect about exports is the market size. There is only a certain figure you can reach in your domestic market sales, whereas in the international market, the sales figure you can reach is several times larger. This is an area where interstate relations are also relevant.

We’re creating alternatives to make sure our products won’t be subject to regulations, such as the ITAR. There are certain components we receive from abroad. When choosing them, we make sure they can be supplied and obtained from several sources. Sometimes, there can be risks that not only stem from regulations, but also from suppliers. Prices may rise, or their production capabilities might prove insufficient. So we come up with solutions for all these possibilities, taking our own precautions.

In the coming period, we anticipate that the Turkish defence and aerospace industry will break many boundaries, becoming unconfined. It will experience a spill-over, so to speak. The industry is now rolling out its own platforms. You have ROKETSAN products being used in the ATAK helicopter, the ANKA, BAYRAKTAR and KARAYEL UAVs and the HÜRKUŞ aircraft. Once its qualification process is completed, the TEBER will have a special place in the market. All these platforms and products will trigger this spill-over.

 

Constant Development

MSI TDR: What is the pace, right now, at ROKETSAN in the areas of development and production?

Selçuk YAŞAR: We’re carrying out indigenisation for all the subsystems in our products, something to which our solution partners are also contributing. We’ll continue to produce our products for many more years. For example, we anticipate that we’ll be producing the UMTAS for at least three more decades. But the missile won’t always remain the same; we’ll constantly develop it, making improvements and adding new capabilities. Its hardware and software will undergo changes. New versions will be released. We’re already making preparations for all this. Right now, we’re developing around 300 sub-systems and technologies. Our pace of work always remains high. As technology advances and abilities develop, we launch new studies. It’s possible that five years from now, we’ll indigenise a component that we’re currently procuring from abroad; everything is proceeding according to our plans and programmes.

Looking at our product development and improvement projects, I can say that we have about 60 ongoing projects at the moment. Some of them are related to complete products, such as missile, while others are related to products we deliver as subsystems, such as rocket engines. Excluding fuses, we’ve about 25 products right now. Over the next 6 or 7 years, we’ll be adding at least 20 to 25 products to these. So in a way, in the next 6 or 7 years, we’ll actually be introducing about the same number of products that we have launched since our founding, 29 years ago. So after coming up with 25 products in 29 years, we’ll be coming up with 25 more in the next 7-8 years. How do we manage to do this? Thanks to our past experience and our rising level of technological readiness, we can launch products faster and within shorter time frames.

 

MSI TDR: In recent times, the OMTAS and UMTAS is the only missile family in the world market to have completed their qualification process and entered into the inventory. How will this advantage be reflected in your export activities? How do you assess the positions of the OMTAS and UMTAS in the market?

Selçuk YAŞAR: UMTAS and OMTAS are the most recent anti-tank missiles in the market. In line with the requirements of the modern battlefield, they were created through a modern product development process and by using the latest technologies. When determining their set of requirements for these missiles, the TAF, our first customer, examined different products on the market, noting the best features of each. This gives us a big advantage over our competitors.

Soon, we’ll organise a fire test in which we’ll demonstrate our missiles’ capabilities to representatives from five or six countries.

 

MSI TDR: ROKETSAN doesn’t just recommend products with fixed capabilities or features to its customers; in other words, it is very open to changing its products according to customer requests. This is something many companies avoid doing, or cannot afford to do. So, what factor is it that enables ROKETSAN to pursue this approach? Do you design your products in a modular way, suitable for customisation? Or is it the flexibility of your engineering team that allows you to provide such services?

Selçuk YAŞAR: This is something our overseas customers also point out. They say that other companies are unable to show the same level of flexibility as ROKETSAN. We listen to our customers and react very quickly. For example, in the UAE, we were asked to perform fire tests with the CİRİT from a fixed wing aircraft within a period of two months, which we were able to do successfully. We worked very closely with the platform manufacturer there. As with the JOBARIA example, we also develop customised products. All this requires significant engineering capabilities.

There are customers who prefer us specifically for this reason, and we want to use this to our advantage. Of course, our biggest advantage is that our products are exclusively based on ROKETSAN designs. This allows us to come up with new versions and to modify the features of our existing products. We can therefore bring tailored solutions.

 

MSI TDR: Work on the development of the SOM-J continues at a rapid pace. What are the advantages of the SOMA-J compared with its competitors? Why should F-35 users wait for the SOM-J?

Selçuk YAŞAR: Just as with our other products, our work on different versions of the SOM missiles is continuing nonstop. In addition to the new versions, we’re also working on indigenising some of the subsystems procured from abroad.

There is a competitor for the SOM-J. The relevant company began working on it long time before we started our own work on the SOM-J, but I can say that we’ll be catching with them. Our biggest advantage is that we’re working with Lockheed Martin, the company that developed the F-35 aircraft. Lockheed Martin is taking part – also provides financial support – in the integration work of the SOM-J to the F-35. Our target customers also include the US Air Force. We consider the synergy resulting from the joint action of the aircraft manufacturer and the missile manufacturer as another great advantage of the SOM-J, in addition to its technical features.

 

We’re Open to Collaboration

MSI TDR: In the past, you have signed various memorandums of understanding as well as contracts concerning the integration of various missiles – such as the CİRİT, UMTAS, TEBER and SOM – to different platforms. Have you carried out similar collaborative work more recently?

Selçuk YAŞAR: The latest development in this regard was the successful fire test the HÜRKUŞ accomplished with the L-UMTAS missile in April. Also in April, at the LAAD exhibition in Brazil, we discussed with Embraer the integration of various ROKETSAN munitions to the Super Tucano aircraft.

On this particular topic, we have this advantage: Aircraft manufacturers are generally knowledgeable only about their own aircraft; we, on the other hand, have worked on many manned and unmanned aircraft. We therefore have far-ranging experience on the subject of integration.

 

MSI TDR: Will there be any tangible developments in the coming period with regard to foreign collaborations?

Selçuk YAŞAR: ROKETSAN is a technology company, and it can engage in various collaboration models, such as local production, establishing a joint venture company, and joint product development. We’ve had examples of these before. For example, currently, in the UAE, we have established three separate product integration facilities. We’ve established these facilities and provided training for the personnel in charge about how to carry out their work.

Establishing a joint company is a model we’re open to; but its feasibility depends on the business volume and continuity. When you do something like this, you basically become a local company, and have to keep getting business in order to survive. If, for example, you invest $100 million but only get $50 million worth of business, this won’t be sustainable.

Another model can be the establishment of a consortium. This, too, involves considerations related to business volume and existing requirements.

 

MSI TDR: Could you tell us about ROKETSAN’s domestic business partners and the size of this ecosystem?

Selçuk YAŞAR: In the past months, we have carried out a highly successful workshop with the companies we work with. About 280 took part in this event. This what we said during the workshop: When we say solution partner, we’re speaking about companies that can shoulder responsibilities together with us; carry out R&D and develop our subsystems or the components we require; and qualify these subsystems and components before producing them for us. Such companies don’t need to be established from scratch. To expand our solution partner ecosystem, we visited around 70 companies in Turkey. We met with many companies offering highly advanced skills, which we aren’t working with currently, but may in the future.

Looking at the general picture, you see, at its very base, are the companies that produce components for us. These companies might be providing us with small electric motors or CNC machining services. There are many highly talented SMEs in these areas. The category above this is that of subcontractors, which not only provide components, but also carry out assembly and installation. And on top of them, at the next stage, are the companies that make designs, or improve existing ones. We define these companies as our solution partners. We are ready to work will all companies in Turkey belonging to these three categories. Of course, in the defence and aerospace industry, production takes place in batches; there is no such thing as making products and putting them on a shelf. That’s why companies sometimes experience ups and downs; they might produce for us for five consecutive years, but then not receive any business for two years. But then, they can start receiving business once again. We need companies that can adapt to all these kinds of conditions.

I can cite as an example a company in Istanbul that produces electric motors. We used to purchase the electric motor of the MAM-L, UMTAS and OMTAS from abroad, as there was no one producing them in Turkey. One day, we found a company that said that it could develop these with its own resources. Of course, this wasn’t an easy process; we did run into some delays. But in the end, they were successful, and this component was indigenised. As a result, we’re also using these engine products, as we are able to sell them without having to get permission from the country of the former manufacturer. Maybe in the future, this company will be able to export this product itself.

At ROKETSAN, we can easily achieve a domestic contribution ratio above 70 percent. In the coming period, we want to take this ratio even higher.

 

MSI TDR: Can you tell us about latest situation with your activities under the Researcher Training Programme for Defence Industries (SAYP)?

Selçuk YAŞAR: There are currently 44 projects being conducted under the SAYP, 24 of which are ROKETSAN projects. So basically, ROKETSAN is carrying out more than half of the projects in a programme in which the entire industry participates. This clearly illustrates the importance we attach to R&D and cooperation with universities, and we are proud of this. We want to increase this number even further.

 

Growth to Continue

MSI TDR: In the coming period, what should our readers expect from ROKETSAN? What kind of a ROKETSAN will we see in five years? Could you share with us your projections about turnover, the number of employees and exports?

Selçuk YAŞAR: In the last 12 to 13 years, ROKETSAN’s turnover has grown nearly eight-fold, while its number of employees has increased three-fold. The share of exports in our turnover varies from one year to the next, averaging 50 percent in the last three years. Looking long term, we want our exports to be within the 25 to 30 percent range of our turnover. As the technological features of the system you develop increases, the need for expertise during their use increases as well; this also affects the rate of our export activities. You can sell gun bullets at a very high rate; but when it comes to a missile such as the CİRİT, you need a platform that can launch it, as well as users with expertise and knowledge on how to use it.

We’re developing higher value-added products. With the expansion of our product family and the successes we achieve in foreign markets, we expect to make an entry into the top 100 defence companies list in the not too distant future, perhaps in 2017.

We currently have over 2,200 employees and more than half are engineers. The number of our employees in our R&D centre is 800, and most of them are engineers too. In the future, with the exception of very critical operations, we plan to have all our production carried out by subcontractors and solution partners. In the past year, we have held a number of workshops across Turkey; we have met with various clusters, organised industrial zones, and teknoparks. And this is what we have very clearly emphasised: If there is someone with a certain skill, capable of doing something specific, we won’t repeat what is already being done; instead, we will support it. That’s why we won’t have very large increases in personnel; we will grow through our ecosystem.

We also focus on the training of our employees. For example, until now, we have sent 12 of our colleagues, who are engineering directors, to several leading universities in the US, so that they can study innovation management. This has had some very positive results. It is the younger generations – to which the colleagues I mentioned belong to – who will carry us to the future. We’re working to preserve and improve our corporate culture. By looking at what others are doing to become successful, and watching how they are going about it, we can learn about the relevant methods and processes, and by applying them, keep up with the rest of the world. This isn’t something you can achieve just by sitting where you are and reading the Internet. You have to go and see those places. Globally, we are competing with the best companies in our field. We might be smaller than some of them in terms of size, but we have confidence in our vision.

 

MSI TDR: We are all aware of Turkey’s export targets for 2023. How do you position yourself within the context of these goals? How will ROKETSAN contribute to country’s 2023 export targets?

Selçuk YAŞAR: Right now, we have submitted proposals for projects both in Turkey and abroad with a total value in excess of $6 billion. Of course, particularly on the export front, there are different dynamics such as relationships between countries and credit mechanisms. In 2023, we aim to have a turnover in the region of $1 billion. We also envisage a significant percent of this turnover will be from exports. I therefore predict that we might contribute to Turkey’s export target by about $350-400 million.

 

MSI TDR: How does ROKETSAN position itself in the Turkish Fighter Development (TF-X) project?

Selçuk YAŞAR: We’re certainly involved in this project and are in contact with the project team. The TF-X will not only use ROKETSAN’s current missiles, such as the SOM-J, but also the missiles and munitions the company will develop in the future.

 

MSI TDR: What will be on your agenda at IDEF?

Selçuk YAŞAR: At each IDEF event we’re leasing a gradually larger area. This is because we’re starting to need ever more space for our products, as both the dimensions and the variety of our products are increasing. This year, for example, we’ll be showcasing certain products at our indoor stand, and other products outside in the open area.

We won’t just put our products on a stand to display them. We’ll be presenting them to our visitors together with their associated concept of use. We will be showing what kind of capabilities these products can deliver to them. So our visitors will be able to visualise the concept and use of these products in their minds’ eye.

We’re planning to host many foreign visitors at the exhibition and are currently making preparations for this.

 

MSI TDR: Is there anything you would like to add?

Selçuk YAŞAR: For the last 1.5 years, we have been working on our document concerning ROKETSAN’s 2035 vision. We have prepared this document and shared it with the relevant state authorities. We may not be able to know for sure what products there will be in 20 years’ time, but we have included in that document the capabilities, knowledge, skills, workforce and investments that will be needed to come up with those products. This document will be like a flaming beacon, guiding ROKETSAN towards the future.

 

On behalf of our readers, we would like to thank Selçuk Yaşar, President and CEO of ROKETSAN, for taking the time to answer our questions and for providing us with such valuable information.

 

To reach the original interview as it was published in our magazine:

http://www.milscint.com/en/files/2017/06/54_61_144-idef2017-ROKETSAN-en.pdf

 

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