Turkey's Unique Geo-strategic Position Influences the Country's
Defence Procurement Policies, Says Frost & Sullivan
- Frost & Sullivan forecasts indicate that Turkey's defence budget will continue to rise
steadily
LONDON, Dec. 17, 2012 /PRNewswire/ -- Turkey is 15th among the global top military
spenders and 6th in Europe,
accounting for 1.1 per cent of global military spending for the
year 2011. The state's unique geo-political condition, where both
domestic and foreign security threats remain a genuine concern, has
encouraged sustained military spending in contrast to global
trends. However, Turkey's main
procurement agency, the Undersecretariat of Defence (SSM), has
expressed its commitment to reducing Turkey's dependence on foreign procurement and
that the modernisation trends should be considered within this
context.
Frost & Sullivan's recent study on "Revenue Opportunity
& Stakeholder Mapping - Turkey Defence Market," finds that the
market earned revenues of USD 18.76
billion in 2012 and estimate it to reach USD 24.70 billion in 2021. The Compound Annual
Growth Rate (CAGR) is calculated at 3.29 per cent (2011-2020).
"Turkey's bilateral position as
a North Atlantic Treaty Organisation (NATO) member with significant
West Asian associations is being leveraged to drive growth in its
domestic defence market," says Frost & Sullivan Research
Analyst Yasha Izadpanah, one of the
authors of the study. "Investment in domestic manufacturing
infrastructure is the principal trend in the Turkish Defence Market
at present. This will continue, buoyed by Turkey's steady economy and political intent
to establish a self-reliant defence industry."
The Turkish market is dominated by the Turkish Armed Forces
Foundation (TAFF), a governmental organisation that owns a full or
partial share in 18 of Turkey's
leading defence companies. As the domestic market becomes
increasingly self sufficient it can be expected that Turkish
companies will become globally competitive, particularly through
the exportation of the four key national projects; the Altay Battle
Tank, the ANKA MALE UAV, T-129 Attack Helicopter and the Milgem
Corvette.
"However, Turkey lacks much of
the technology and infrastructure required to fulfill its new
military ambitions, which is what makes good business opportunities
for companies with advanced capabilities, particularly in air and
naval programs," adds Frost & Sullivan Research Analyst
Koray Ozkal, co-author of the
research. Entry to the Turkish market should be supported by a
partnership with local companies looking to raise their expertise
and industrial infrastructure.
"Frost & Sullivan research indicates that C4ISR and air
platforms make 66 per cent of military imports as a result of
Turkey's lack of infrastructure.
However, the time to build this cooperation is now as the
opportunities for partnership will diminish as indigenous technical
capability continues to grow in Turkey," he notes.
As budget reduction continues in the US and Europe, the defence industry is required to
look toward new markets. Turkey's
increasing ventures beyond its borders, act as a bridge to
potentially lucrative new markets. This element of the Turkish
market should be considered for long term investments.
"Turkey will potentially become
a major exporter to GCC and ASEAN countries; and, TAF will play an
increasingly integral military role in the Middle East and beyond, requiring next
generation technologies," concludes Koray
Ozkal. "The Turkish market, however difficult to enter and
operate, is an attractive target for companies otherwise dependent
on other European and North American Markets."
Frost & Sullivan study on "Revenue Opportunity &
Stakeholder Mapping- Turkey Defence Market" (M77B-16) will be
available soon. If you would like to obtain more information about
this report, please contact Joanna
Lewandowska, Corporate Communications, at
joanna.lewandowska@frost.com. Please include your full contact
details in the query.
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