- Maker of anti-riot trucks upgrades to anti-insurgency vehicles
- Company may start selling armored personnel carriers this year
To see how Turkey’s domestic security situation is evolving, look no further than Katmerciler’s product line. Three years ago, the company’s flagship product was a protest suppression vehicle. This year it’s moving to urban warfare.
As government forces dig in for street battles against autonomy-seeking Kurdish rebels, the Izmir-based maker of riot-control trucks has upgraded its product line to offer more sophisticated gear including armored excavators, a top executive said. It’s opening a new plant to keep up with demand and also plans to sell its first armored personnel carriers, or APCs, as early as this year.
“Our new facility in Ankara should be completed in about two months,” Executive Vice President Furkan Katmerci said in a phone interview on March 11. Katmerciler may expand the premises after completion and could produce as many as 1,000 APCs per year there, he said.
Katmerciler Arac Ustu Ekipman Sanayi ve Ticaret AS, whose founder is a former lawmaker for the ruling Justice and Development Party, sold 24 armored excavators to security forces last year and may sell as many as 20 more this year, according to Katmerci.
“The armored excavators help close trenches rapidly and provide protection," he said. "We started selling them in a 2015 tender after receiving demand from security forces."
The need for the vehicles arose after the collapse of a political peace process last year, spurring militants from the Kurdistan Workers’ Party, or PKK, to begin digging street trenches in Turkey’s southeastern cities and towns. More than 300 members of the police and military and more than 1,000 suspected rebels have been killed in ensuing battles, with security forces struggling to remove barricades from the cities of Diyarbakir and Sirnak, according to tallies by the state-run Anadolu Agency.
The government is gearing up for similar operations in Hakkari and Mardin provinces, Interior Minister Efkan Ala said March 11.
Katmerciler shares rose 135 percent in 2015, the third-best performer among Borsa Istanbul’s industrial companies. The shares rose as much as 5.1 percent in Istanbul on Tuesday before closing 1.2 percent higher at 7.71 liras. Katmerciler has declined 11.9 percent this year, compared with the Borsa Istanbul 100 Index’s 10 percent advance.
Last week, the company reported that sales surged 83 percent to 311 million liras ($108 million) in 2015, while profit doubled to 18.6 million liras. Revenue may rise as much as 20 percent this year, with a target for an earnings before interest, taxes, depreciation and amortization, or Ebitda, margin of at least 15 percent, Katmerci said.
“As the defense industry share in our sales increases, our Ebitda margin will too," he said. "There’s more added value in that area.”
Katmerciler last year sold 155 anti-riot trucks, up from 88 in 2014, according to company filings. Called TOMAs in Turkish, the vehicles gained notoriety during the Gezi Park anti-government protests in 2013. Katmerci didn’t provide a target for this year, though he said upgrades for units already in the field were possible, and Azerbaijan and Tunisia may be new markets for the vehicles. Katmerciler will showcase the TOMAs at a defense exposition in Malaysia later this year, he said.
Talks with Wisconsin-based Oshkosh Corp., first made public in December, are proceeding “quickly,” Katmerci said. The parties are discussing possible joint production of fire trucks, an area in which Oshkosh targets growth in Turkey’s region, he said.
Katmerciler is aiming to start selling its "Kangal" and "Khan.D" APC models this year, and will start working on a model that has enhanced armor, Katmerci said. The new vehicle could be showcased at Turkey’s International Defense Industry Fair in May 2017, he said.
Another potential growth area is fuel tankers that comply with international ADR standards, which went into effect in Turkey in 2014. With thousands of Turkish tankers in need of upgrades, it’s a market worth about 2.5 billion euros ($2.8 billion), according to Katmerci. The company aims to sell about 100 units in 2016.
He declined to provide per-unit prices for any of the products, saying disclosing prices could affect the company’s ability to compete in auctions.