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French Industry Seeks a Comeback to Turkish Market

Mar. 10, 2014 - 05:04PM   |  
By BURAK EGE BEKDIL   |   Comments
Rebuilding Relations: French President François Hollande speaks during the French-Turkish Economy Forum Jan. 28 in Istanbul.
Rebuilding Relations: French President François Hollande speaks during the French-Turkish Economy Forum Jan. 28 in Istanbul. (Agence France-Presse)
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ANKARA — In the 1990s, French arms makers were one of the leading European players in the Turkish market. Political disputes and Turkey’s aggressive turn to indigenous development sidelined the French presence, but they are pushing to re-enter the Turkish market.

French President Francois Hollande’s January state visit to Turkey, the first presidential visit here in 22 years, saw political and defense talks, with an emphasis on a controversial Turkish contract in which a French-European bidder came in second. Recently, a large French government and industry delegation visited Turkish counterparts across the country.

The procurement offices of both countries also agreed to boost industrial cooperation.

In September, Turkey said it selected China Precision Machinery Import-Export Corp. to help construct Turkey’s first long-range air and missile defense shield. Eurosam, maker of the SAMP/T Aster 30, finished second, and a team of Raytheon and Lockheed Martin, with their Patriot-based system, came in third in the $3.4 billion competition.

Eurosam’s shareholders include MBDA — jointly owned by BAE Systems, Italy’s Finmeccanica and Airbus Group — and France’s Thales.

Although talks with the Chinese contender officially continue, Turkey, under increasing pressure from its NATO allies for concerns over interoperability with a Chinese system, has asked the European and US bidders to renew their offers.

A leading French defense delegation was in Turkey from Feb. 25 to Feb. 28 for high-level talks with the government and local industry. The French delegation consisted of 90 representatives from 60 defense companies and five trade associations specializing in aerospace and defense (GIFAS), naval defense (GICAN), land armaments (GICAT), the National Aerospace Research Center (ONERA) and the Aerospace Valley cluster.

Participating French companies represented a broad spectrum of the industry, from large groups such as Airbus, Safran and Thales through equipment manufacturers down to specialized small and medium-sized enterprises. They met with their Turkish counterparts here and in Istanbul, Izmir, Eskisehir and Sakarya to seek new deals, partners and suppliers.

Turkey’s defense procurement office, SSM, and its French counterpart, the DGA, organized the Turkish-French Industry Day on Feb. 27 here. SaSaD, an umbrella organization for the Turkish defense industry, and GIFAS signed a memorandum of understanding for bilateral cooperation.

GIFAS’ 321 members operate in all sectors of the aerospace industry, including civil and military aircraft, helicopters, engines, missiles and weapons, satellites and launch systems, UAVs, security systems, subassemblies and associated software. With €44.4 billion (US $60.7 billion) worth of annual sales and €51 billion of orders booked in 2012, GIFAS members have a workforce of 170,000 employees.

Murad Bayar, Turkey’s chief procurement official and head of SSM, said, “The visit… is a milestone to develop the relationship between the two nations. Turkey and France have been working together on the Turkish satellite [Gokturk], and clearly, France is one of the largest foreign direct investors in Turkey.”

Bayar said Turkey and France aim to boost their bilateral trade to €20 billion annually.

DGA’s head, Laurent Collet-Billon, said that SSM and DGA would set up an armaments committee tasked with coordinating and boosting defense industry relations.

“The meetings were very useful in exploring new areas of cooperation, including major future programs,” one SSM official said.

He did not explicitly comment on Eurosam’s chances to win the air defense contract. “At the moment, all options are open.”

A French aerospace official said French industry is clearly motivated to seek deals with Turkey.

“We understand that the Turkish industry has progressed remarkably over the past few years. We are not here to sell, but to build sustainable long-term partnerships,” he said.

A Turkish diplomat dealing with the European Union said political ties with France are relatively good, and free of the kinds of major disputes the two countries had in the past.

“There aren’t any problems that may shadow commercial relations at the moment,” the diplomat said.

In 2012, Turkey agreed to restore all military ties with France, including arms deals between the two countries. In 2011, Ankara had canceled economic, political and military meetings with Paris after France’s lower house of parliament voted overwhelmingly in favor of a draft law to make it illegal to deny that the killings of Armenians in World War I in the Ottoman Empire, modern Turkey’s predecessor, amounted to genocide.

France’s highest court overturned the law two months later. But the Turkish measures taken against France, which included restrictions on French military aircraft and ships landing or docking on its territory, remained in place.

Since the lifting of the Turkish embargo, political relations between NATO allies have been on a steady rise.

According to Marwan Lahoud, president of GIFAS, “geographical proximity, strong economic ties and common membership in NATO dictate that relations between Turkey and France cannot be negative in any long-term period.” ■


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