The Turkish defense industry sector has posted a 24.3% increase in turnover in 2019 year-on-year, reaching $10.8 billion, while sector reports show that the companies operating in defense and aerospace fields have put new products on their agendas for the next two years.
The turnover of the sector increased by 30.9% in 2018 compared with the previous year.
The figures were released in a report by the Defense and Aerospace Industry Manufacturers Association (SASAD) that was published most recently last week, although a bit delayed due to the coronavirus outbreak.
The report included data obtained through the official records and results of the industry expectations survey which was for the first time included in the report.
According to the survey, almost all companies expect growth in the next two years, and a significant portion of them plan to invest in new products. Some 59% of the companies that responded to the survey stated that growth will be their priority in the next two years, while 34% said they expect the growth to be at a "low-medium scale.”
When asked about the plans of the companies for the upcoming two years, 65% of them said they plan to add new products, 55% said they were planning to open up to new markets, and 83% said they are aiming for further growth in existing markets.
Any merger plans?
Companies, when asked about their priorities, have different views on merging. Some 42% of the firms stated that they would say yes to formal cooperation with other firms, and 35% to informal cooperation, while 76% of them stated that they are not expecting mergers or acquisitions.
Some 55% of the companies stated that they would make improvements and developments in their existing products, and 43% answered that they planned new investments in more than one product. Only 2% of the companies declared that they would withdraw an obsolete product from the market or would withdraw from an existing market.
Investment and equity
The companies were also asked the ratio of their own resources for their investment in product-technology development. While 26% of the firms declared that their product-technology development investments financed from their equities is more than 10% of total turnover, 19% stated that it was 6%-10% of the turnover and another 19% stated that it was 4%-5% of their turnover.
Among the surveyed companies, 30% of them stated that this rate would be over 10% in the next two years, while 20% of the firms stated that it will exceed 6%-10% and 20% of the companies stated that they would allocate a technology-product development budget of up to 5% of their turnovers.
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