Opening Up Business with Export, the Secret Behind MILMAST’s Success: Producing what Has Not Been Produced Before

22 Mayıs 2019
1 - C - MILMAST

Established in 2017 with a view to producing critical products that as yet are not produced in Turkey, MILMAST has accomplished something rare in the sector, having signed its first sales contract with a foreign company. The rapid success achieved by MILMAST, which was established by FİGES, one of the leading engineering companies in the Turkish defence and aerospace sector, has brought with it new partnerships and investments.

 

The secret behind MILMAST’s success lies in the company’s founding philosophy. The history of MILMAST starts with Mr. Koray Gökalp, who is the General Manager of FİGES and who has been the General Manager and a Member of the Board of Directors of MILMAST since its establishment. Upon a decision to venture into the field of technological production and industrialization, FİGES took the decision to focus on the production of mast systems, which Turkey had to import for years.

After starting to develop products to satisfy the needs of ASELSAN, one of Turkey’s largest users of mast systems, the growth of the company proceeded quickly. Commenting on the support provided by ASELSAN in this process, Gökalp said, “ASELSAN’s engineers and the ecosystem developed by the company provided us with unique support while we, as an engineering company, matured our thoughts on the development of such a product, as well as in the production stage.

 

Ready-to-deliver telescopic mast systems produced by MILMAST, for production capacity has reached 60 per month.

Ready-to-deliver telescopic mast systems produced by MILMAST, for production capacity has reached 60 per month.

 

Partnership with SSTEK within One Month of Establishment

After passing the R&D phase and making its first product ready in early 2017, FİGES officially established MILMAST in October the same year. About one month later, Defense Industry Technologies Inc. (SSTEK) acquired 30 percent of MILMAST’s shares and became a partner of the company. Speaking about SSTEK’s partnership with MILMAST, Gökalp said: “Although it has been a short time since our establishment, SSTEK’s partnership with us is an indication of the complete trust in our product. We used all of the income from this sale of shares to finance the ongoing investments of MILMAST, in order to not to abuse this trust. This investment by SSTEK came at a critical time, and contributed significantly to our growth into a company that proceeds with confident steps while making sales of its initial product, while at the same time carrying out studies into new products.”

 

Visionary Investments Results In Exports

Following its establishment, MILMAST continued its investments, and by early 2018 the company had gained the ability to engage in serial production. The company received its first large order, for the production of 101 masts with a value of $3 million from South Korean LIG Nex1, only a few months after its establishment. Gökalp described the success of the company as follows: Throughout the official establishment period of MILMAST, we made investments with a bold vision, using a large proportion of the 2016 revenues of FİGES to purchase the necessary raw materials for mast systems. During our negotiations with LIG Nex1 in early 2018, they came and visited our factory, and found a facility that was ready for serial production, leading them to sign a contract with us. The fact that the product we developed when we didn’t sell even a single product, that the plant we established, and that the investment we made for raw materials brought this order to us.”

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Immediately after signing the contract with LIG Nex1, MILMAST started to receive large orders from the domestic market, and has since signed a total of seven contracts – four with ASELSAN, two with Otokar and one with TÜBİTAK. As some of these contracts are for projects with foreign end users, MILMAST is engaged in indirect exports, aside from its own direct exports to LIG Nex1.

 

MILMAST’s FTM series masts. The masts exported by MILMAST to LIG Nex1 are part of this product family.

MILMAST’s FTM series masts. The masts exported by MILMAST to LIG Nex1 are part of this product family.

New Contracts on the Agenda

MILMAST is already in negotiations with various prime contractors in the country, and continues to pursue new export opportunities through its participation at foreign exhibitions. MILMAST has started to attend such exhibitions in 2018, and has to date promoted its products at DSA in Malaysia, Eurosatory in France and ARMY in Russia. Within Turkey, the company has participated at the SAHA, EXPO, and SEDEC exhibitions, and will also be displaying its capabilities at IDEF’19 between April 30 and May 3, and is preparing to sign an important agreement during this exhibition.

Furthermore, the company is also making moves to open representative offices in its target export markets, building on the confidence it has gained from its success during acceptance tests and deliveries. The company is planning to sign representation agreements in the near future on the sale of MILMAST products with two companies – one in Belgium for the European market and one in Russia for the Russian market. The next goal for the company is to sign similar representation agreements in Qatar and the United Arab Emirates.

MILMAST carries out the necessary marketing activities in the civil field for the assurance of commercial sustainability. The sectors on which the company focuses on the civilian side include telecommunications and field lighting.

 

MILMAST took part at many international exhibitions in 2018.

MILMAST took part at many international exhibitions in 2018.

2020 Capacity Already at Maximum

The company produced a total of 104 masts in 2018, and has already produced 35 masts in January 2019. While continuing its efforts to further increase production capacity, MILMAST, as of February this year, has the ability to produce 60 masts per month, but with the recent orders, capacity for both 2019 nd 2020 has been filled.

Within this process, the company has made investments amounting to some $11 million into R&D and infrastructure, and plans are in place to invest a further $1.2 million. The future targets of the company include increasing monthly production capacity to 102 masts, as a first step, and then to more than 600 masts.

The company’s accomplishments have attracted various partnership offers that Gökalp describes as follows: “Compared to the first day of establishment, MILMAST’s value has increased approximately 100-fold. This is not a value estimated through mathematical calculations; it is real market value of our company. We can say this, as various foreign investors have offered 15 million dollars for a 10 percent share of the company.”

 

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