SSM INDUSTRIAL PARTICIPATION OFFSET APPLICATIONS

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SSMINDUSTRIAL PARTICIPATION - OFFSET
APPLICATIONS
MINISTRY OF NATIONAL DEFENCE Undersecretariat
for Defence Industries
Göknur PILLI Offset Local Content Manager
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PRESENTATION PLAN

• Undersecretariat for Defence Industries (SSM)
• Industrial Participation/Offset Directive-2007
• Offset Commitment Realization Figures
• Criteria for Success in Offset

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UNDERSECRETARIAT FOR DEFENCE INDUSTRIES
Establishment Law 3238

• To put into effect the decisions taken by Defence
  Industry Executive Committee,
• To reorganize existing local industry in line
  with the prerequisites of defence industry,
• To plan the production of modern arms and
  equipment at private and/or public sector
  entities,
• To conduct research and develop the modern arms
  and equipments as well as to have their
  prototypes built,
• To coordinate offset and the export of defence
  goods.

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OFFSET MECHANISM FOR MND
MINISTRY OF NATIONAL DEFENCE

• UNDERSECRETARY
• (MILITARY)
• Direct Procurement

• UNDERSECRETARY (CIVILIAN)
• Undersecretariat for Defence Industry, SSM
• Co-production Modernization

OFFSET
SSM INDUSTRIALIZATION and A.T.I.P.
DEPARTMENT Offset and Local Content Branch
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NUMBER OF PROJECTS MANAGED BY SSM
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PURPOSE OF INDUSTRIAL PARTICIPATION / OFFSET
APPLICATIONS

• To protect and improve the local defence
  industry,
• To provide transition flexibility for military
  and civil products,
• To contribute to the modernization of the
  technological infrastructure,
• To set possible grounds for the integration of
  local-foreign companies.

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INDUSTRIAL PARTICIPATION / OFFSET
(IP/O)DIRECTIVE 2007 (1)

• Category-A Local content
• Category-B Export of Defence, aeronautics/aerospa
  ce goods/services
• Category-C In defence, aeronautics and aerospace
  industry and/or other fields requiring high
  technology
• - Technological cooperation,
• - New and/or expanded investment,
• - RD activities.
• EU Framework Programme 7 Participation of
  Turkish companies to the RD projects

www.ssm.gov.tr
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INDUSTRIAL PARTICIPATION / OFFSET
(IP/O)DIRECTIVE 2007 (2)

• Threshold US 10 M
• Obligation 50 of the Contract Value
• Penalty 6
• Bank Guarantee 6 of the obligation
• Fulfillment period end of the delivery plus 2
  years

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INDUSTRIAL PARTICIPATION / OFFSET
(IP/O)DIRECTIVE 2007 (3)

• Export Guarantee is required for T/T and
  Investment
• Pre-approval for each offset transaction
• Causality is required for offset projects
• Banking of excess offset credit
• - utilization within 5 years after fulfillment
• - transfer to another eligible company

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TECHNOLOGICAL COOPERATION
OFFSET OBLIGOR
SSM
Offset Credit
Value of technology x Multiplier
TECHNOLOGY
Export Guarantee
LOCAL COMPANY
Value of technology
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INVESTMENT
SSM
Info, Document
Offset Credit
OFFSET OBLIGOR
EXPORT
COMPANY
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MULTIPLIERS USED IN CREDITING
ADDITIONAL MULTIPLIERS - SMEs 1 - NEW
PRODUCT 1 - LOCAL DESIGN, RD 1
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MULTIPLIERS USED IN CREDITING
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COMMITMENT REALIZATION FIGURES
CURRENT OFFSET STATUS

• 63 OFFSET AGREEMENTS SIGNED (1985-2007)
• 20 OUT OF 60 OFFSET PROGRAMS WERE
• SUCCESSFULLY COMPLETED
• 43 OFFSET PROGRAMS ARE STILL EFFECTIVE
• TOTAL OFFSET COMMITMENTS US 6,1 B
• TOTAL OFFSET FULFILLED US 3,3 B

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OFFSET REALIZATION STATUS (1985-2007)
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REMAINING OFFSET COMMITMENTS AS OF YEARS
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COMPANIES WHICH HAVE OFFSET OBLIGATION

• USA
• BOEING
• RAYTHEON COMPANY
• SIKORSKY
• GENERAL ELECTRIC
• LOCKHEED MARTIN
• ISRAEL
• ELTA ELECTRONICS IND. LTD
• ELBIT SYSTEMS LTD. / ISRAEL
• ISRAEL AIRCRAFT IND. LTD. (IAI)
• ISRAEL MILITARY INDUSTRIES (IMI)
• IUP
• FRANCE
• EADS-EUROCOPTER
• THALES AIRBORNE SYSTEMS
• HOLLAND
• THALES NEDERLAND

• GERMANY
• ABEKING RASMUSSEN
• EADS-LFK
• LÜRSSEN
• RENK AG
• MTU
• EADS-DS
• ITALY
• AGUSTA S.p.A.
• ALENIA AERONAUTICA
• OERLIKON CONTRAVES S.p.A.
• UK
• EADS-ASTRIUM
• THALES UNDERWATER SYS.
• SPAIN
• EADS CASA

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SUCCESFUL OFFSET APPLICATIONS (1)
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SUCCESFUL OFFSET APPLICATIONS (2)
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CRITERIA FOR SUCCESS (1)
MAIN CHARACTERISTICS OF SUCCESFUL TURKISH
COMPANIES IN OFFSET ARENA

• - High quality standarts (ISO, AQAP)
• Supplier of goods/services under defence
  projects
• Manufacturing flexibility
• Product / customer oriented
• Export experience

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Patience - Constancy Result
CRITERIA FOR SUCCESS (2)
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SSMINDUSTRIAL PARTICIPATION - OFFSET APPLICATIONS
MINISTRY OF NATIONAL DEFENCE Undersecretariat
for Defence Industries
Göknur PILLI Offset Local Content
Manager goknurp_at_ssm.gov.tr