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Expodefensa 2017: STM, Star of Turkey´s Defence-Industrial Complex

STM details how it operates and why it is a viable partner for Colombia and the whole of Latin America

The Turkish defence-industrial complex is vastly more ubiquitous than it was in years past. This success is due to several factors including a very sophisticated offering, local customer cooperation, deep levels of customer care / pre- and post-sales services, and strategically coordinated government-to-industry marketing, sales and promotion. Seems simple enough; however, many countries have not seemed to “twig” how to do it on the level Turkey has…in the end, it all rests on the relationship with the customer country and mutual respect. 

The latter is something of a practical philosophy for operating in Latin America: a good relationship built on mutual respect and trust in the quality of the purchase.

Speaking generally with STM´s Marketing Expert, Dr Erdem Tümdag, he explains how STM operates and why it is a viable partner for Colombia and the whole of Latin America. In defining the role and nature of STM, Tümdag makes it simple to understand: “STM is state-owned 66 per cent by the Ministry of Defence and the SMM – whose Permanent Undersecretary of Defence serves as STM´s Chaiman; infact, many of STM´s Board Members are from the SMM.” But this isn´t the easy part that defines STM. “There are three main areas of STM: 1) Engineering; 2) Consultancy; and 3)Technology,” which he further clarifies in this way…

Technology – is based in Ankara, addressing cyber technologies and certifications, as well as “Cyber Fusion” at STM´s Cyber-Fusion Centre. This allows STM to create solutions for smart & safe cities and (smarter) militaries.

Consultancy – is not necessarily what one might think. STM has a vast stable of experts from all sectors of defence and security who have military experience and deep technical knowledge of the systems and requirements within their field of expertise. The SMM / MOD can draw upon this brain-trust to help streamline processes and improve projects´ effectiveness and progress. It is also the only body within the Turkish defence industrial complex that can make exigent purchases for the MOD without the delays associated with normal defence acquisitions. This aspect alone makes STM very powerful.

Engineering – is very interesting for current and potential “client” nations. This branch of STM coordinates its activities from two locations, the Istanbul Naval Shipyard and Istanbul Technical Park. This part of STM is likely to be the most visible and as it is devoted solely to naval projects. For example, it handled the modernisation of Turkey´s type 209 submarines (German built). Moreover, it is the ONLY body authorised to conduct naval export of Turkey´s MILGEM ship designs.

Engineering has a unique business model that is attractive to all of its customers. The model is this which wins it business the world over: 1) use STM expertise to lead the programme and enlist local engineers (i.e. in final designs etc.); 2) invest in industrial infrastructure, train-up the workforce, and transfer technology to customer location; and, 3) execute the programme locally, keeping the project´s labour and materials locally-sourced, benefitting the customer´s own economy and shipyard(s). This is also a more practical way of shipbuilding, MRO and modernising naval assets reducing costs and risk.

The Pakistan naval contracts (submarine upgrades and new navy fleet tanker) STM won are executed in this way. It means that the customer relationship is stronger, there is deeper trust and partnership and the likelihood of repeat business is more likely.

Taking this model a step further, it is the way STM wants to work with the Colombian Navy for the upcoming new surface ship tender. STM estimates that a modified version of a MILGEM class ship (CF3500) would suit Colombia´s requirements perfectly, using local design and engineering assets from Colombia to make it a truly Colombian innovation. Imagining STM wins the tender it would partner with Colombia´s Cotecmar Shipyard, which means that STM invests in technology transfers, production line and IT infrastructure and training to build the modified MILGEM ship of Colombia co-design and specificity.

After the completion of the programme, Cotecmar will have gained increased capabilities to allow it to go after other business – with or without STM – in the region. Hence, we have here a proven business model that yields a good relationship built on mutual respect and trust in the quality of the purchase from STM.

STM has much success with this business model – no, business dynamic. STM is active in circa 70 different naval projects worldwide. As countries in Europe also look to “redevelop” their naval capabilities, countries with “sleeping” shipyards, such as Poland, could certainly benefit from this unique way of supply and partnership.

Curtis Hand


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