Turkey, South Korea eye more business

ANKARA - Hürriyet Daily News | 4/12/2010 12:00:00 AM | ÜMİT ENGİNSOY

Turkey and South Korea are working for fresh business deals worth billions of dollars in the nuclear energy and defense industries on the 60th anniversary of the Korean War and in the wake of a series of major defense industry agreements.

Turkey and South Korea are working for fresh business deals worth billions of dollars in the nuclear energy and defense industries on the 60th anniversary of the Korean War and in the wake of a series of major defense industry agreements.

In the largest effort, South Korea is seeking to build Turkey's second nuclear power plant in the Black Sea province of Sinop.

Turkey has already agreed with Russia for the construction first nuclear power plant in the Mediterranean province of Mersin, and details of the deal are expected to clear up during a planned visit by Russian President Dmitry Medvedev to Ankara next month.

Following this deal, Korea Electric Power, or Kepco, South Korea's state-run power utility, signed last month a cooperation protocol, or a preliminary agreement, with Ankara for Turkey's second planned nuclear power plant project.

South Korea is pushing harder at becoming a major participant in the global nuclear industry in emerging markets, after winning a hotly contested $20 billion deal from the United Arab Emirates at the end of last year.

In order to finalize the nuclear power plant deal, Turkey and South Korea need to first sign a government-to-government agreement and then a final contract.

In the defense area, in addition to countries such as Italy, Spain, France, the Netherlands, Britain and the United States; South Korea is also interested in the Turkish Navy's fresh program to buy a landing platform dock, or LPD.

To gain a capability for NATO- and peacekeeping-related overseas amphibious force deployment, the Navy is preparing to buy its first LPD, able to carry up to eight helicopters, for more than $500 million. The prime contractor will be a local company, with heavy foreign industry involvement because of the high degree of technology transfer required, procurement officials sais.

[HH] Pros of dealing with S Korea

Analysts point to the following advantages for Turkey in working with South Korea's defense industry:

- Political relations are excellent, dating back to the Korean War, in which Turkey sent 5,500 troops to the east Asian peninsula in 1950 to join United Nations forces to fight against communist armies of North Korea and China.

- Turks view South Korean defense products as reasonably priced.

- South Korea is willing to provide a high degree of technology transfer at a time when the United States, Ankara's largest weapons supplier, is reluctant on the matter.

- Both Turkey and South Korea have defense systems based on U.S. and NATO standards, facilitating their defense cooperation.

South Koreans entered the Turkish defense market in 2001 when they secured a nearly $1 billion deal for a license of modern howitzers to boost the Army's artillery capabilities.

In 2007, when two South Korean weapons manufacturers won key contracts in Turkey, they did not only take the deal from Western rivals who had been chasing it for several years, but also won a strategic position that may pave the way for a broader defense industry cooperation.

At the time, Turkey selected the South Korean companies for its trainer aircraft and main battle tank programs. Seoul's share in the deals may exceed $1 billion with expected follow-on contracts.

For Turkey's multibillion-dollar program to develop the Altay, the country's first planned main battle tank, the Turkish company Otokar, the project's prime contractor, is working with South Korea's Hyundai Rotem mainly for know-how and technology transfer purposes.

Turkey has also selected Korea Aerospace Industries, or KAI, to lead a joint production of 40 KT-1 turbo-prop basic training aircraft for the Air Force. The first five aircraft are expected to be delivered at the end of this year.