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Wednesday, March 30, 2011

Turkey targets Indonesia And Malaysia for defense exports

ACV 300 Buatan Turki Di Pindad.

Eyeing to expand in new markets, Turkish defense industry focuses on Indonesia and Malaysia. FNSS, a producer largely owned by Turkish company Nurol, is to sell armored vehicles worth between $300 million and $400 million to the Indonesian Army initially as part of a broader industry relation. The military electronics firm Aselsan also is planned to cooperate with the Asian country on wireless devices and other electronic equipment.

In an effort to cement its position as a major exporter of armored vehicles and other defense equipment, Turkey has chosen the southeastern Asian nations of Indonesia and Malaysia as two key target countries.

Shortly before a planned visit by President Abdullah Gül to Indonesia in early April, senior Turkish procurement officials in mid-March secured a number of defense industry deals, for which official cooperation agreements are scheduled to be signed during the visit.

“Indonesia and Malaysia are two countries with which we really want and hope to greatly boost our defense industry relations,” said a senior procurement official.

A first cooperation package with Indonesia is expected to cover the sale and joint production of armored vehicles, wireless devices and rockets. The value of this first package would be between $300 million and $400 million, the Turkish procurement official said.

The Ankara-based armored vehicle manufacturer FNSS, a joint venture between Turkey's Nurol Holding and BAE, is expected to provide the Indonesian Army with tracked armored combat vehicles. FNSS' majority shares belong to Nurol.

Aselsan, a top military electronics company and Turkey's largest defense firm, is planned to cooperate with Indonesia on wireless devices and other electronic equipment. Roketsan, Turkey's top company specializing in rockets and missiles, is expected to sell rockets to Indonesia.

"After this first cooperation package, a second package is envisioned, and it may cover joint production of naval vessels and the modernization of Indonesia's [older] F-16 fighter aircraft by our TAI [Turkish Aerospace Industries]," said the Turkish procurement official.

TAI, which in the 1990s assembled more than 200 F-16s for the Turkish Air Force, in recent years has modernized or is modernizing Jordan's and Pakistan's older F-16s with the permission of Lockheed Martin, the aircraft's original maker. TAI also is contributing to the production of the U.S.-led F-35.

Malaysia

With Malaysia, FNSS signed the largest single Turkish export deal in history, during a visit of Malaysian Prime Minister Datuk Seri Najib Tun Razak to Ankara in late February.

FNSS signed the $600 million export agreement with Malaysia's Deftech for the design, development, production and logistical support of 257 Pars 8x8 wheeled armored combat vehicles for the Malaysian armed forces. FNSS earlier sold tracked armored vehicles to Malaysia.

"We have a solid cooperation base with Malaysia. In the near future, we plan to work on naval vessels and some other defense equipment with that country," the Turkish procurement official said.

"Turkey, Indonesia and Malaysia are all predominantly Muslim countries, but religion does not play a role in Turkish efforts for arms sales to those nations," said one defense analyst based here.

Separately, Turkey also seeks to modernize the older F-16s of Thailand, another South Asian country.

Turkey's defense industry exports greatly have improved in recent years, up from only some $250 million a year five years ago. The SSM is eyeing the export of defense equipment worth nearly $1.5 billion this year, up from $832 million in 2009. The 2010 figure has not been announced yet.(Hurriyetdailynews/WDN)

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