Why Turkey Should Focus on Materials Technology in Industry (Part-1)

If you want to build airplanes, automobiles, trains, missiles, ships, tanks, cannons, guns, rifles and bridges, the critical sector is Materials Science, Engineering and Industry.

MATERIALS SCIENCE AND ENGINEERING

Whenever locomotives, automobiles, airplanes, metal ships, missiles, machines, computers, cell phones, etc. were invented, when their use became widespread, when these machines, tools and equipment were imported from abroad, we constantly minimized and minimized ourselves, especially against the western world, and with their cultural pressure, we often fell into a social psychology of "self-deprecation and learned and even taught helplessness". But sometimes when a dam was built, we got out of this psychology, we got excited, sometimes when an embargo was imposed, first we were pessimistic, then we took off like a rocket and achieved unimaginable successes, especially with the help of poor people, then we collapsed again, then we got up again, but we always stayed in resonance, back and forth.

In the field of industry, we could not make a breakthrough, whereas we had the necessary capacity for inventions and rapid production. We did not manage to concentrate on going out with the motivation of "they have done it, they are doing it, but we can do it too." Sometimes we did, but we could not sustain it. However, we had identified our bauxite reserves in 1962, and in the following years, in 1973, we had established the giant Eti Alüminyum A.Ş. Seydişehir production facility. Were we dreaming that our known Bauxite reserves could meet our 120-year need for ALUMINA (ALUMINIUM OXIDE used in Primary Aluminum Production) as of today? Surely those who contributed must have imagined it, but did the general public imagine it?

Are we grateful to those who founded Erdemir, İsdemir, Kardemir and those who contributed? Did we dream that we would become the largest tonnage producer of "Crude Steel" in Europe, ahead of all 27 member countries of the European Union (including Germany)?

Did we know that Petkim Petrochemicals Inc. was founded in 1965 under the leadership of TPAO? Did we imagine that 40 years later we would be Europe's second largest plastic semi-finished products producer after Germany?

Since it is very much on the agenda, we know that Turkey has 73.6% of the world's known boron reserves. In other words, we are the world giant when it comes to boron.

To repeat;

- Our bauxite reserves are sufficient to meet our alumina production for 70 years starting from 2022, and we have a strategic production facility that can process these reserves.

- We are Europe's largest tonnage crude steel producer.

- We are Europe's second largest producer of plastic semi-finished products. We are also good at polymer matrix composites, which is a value-added product, but we are not yet at the levels we desire. If we can utilize the natural gas from the Black Sea in the production of petrochemical products, we will be the first in Europe. Moreover, the gas from here will reduce energy costs, which is a very serious input in manufacturing.

- We have a monopoly on world boron reserves.

This country, this nation, the governments elected by the nation have done a lot in the last 100 years, but they had the energy and resources to do much more. Why haven't we gotten better? I think the biggest reason was the constant erosion of our self-confidence. It was almost like a social LEARNED/ TEACHED DESPERATION SYNDROME...

So, if we are doing so well, why do we still not have the level of industrial production and income we desire? 

Because;

1. We are not and/or cannot engage in the production of value-added final products. 

For example, we manufacture aluminum sheets and bars in categories suitable for general purposes, but we do not manufacture special-purpose aluminum sheets and bars used in jet aircraft and engines, performance automobiles, etc., and we do not think about their formulation and R&D. Yes, there is an economic justification for this. You can and should say, "I am going to spend so much on R&D and investment, but to whom am I going to sell it? This is where the power and support of the state should come into play.

2. We don't want to be Build-Sell, we want to be Buy-Sell.

Unfortunately, this is the case, and the saying "it is easier and more profitable to buy and sell than to make and sell" - like a proverb - has entered our minds and embedded itself in our culture. 

For example: If the man who makes (manufacturer) cannot create a balanced triangle of "Finance, Machine, Human", his job is very difficult. First, bear the cost of a very serious and heavy machinery investment, meanwhile try to be efficient and competitive in a difficult field such as production, find people, train people, find raw materials, buy raw materials. Buy your raw materials in advance, but sell your product on credit, try to collect your receivables, sometimes not collect them at all, etc. The ordeal of the maker does not end... The one who buys and sells; buys from the producer (a valuable customer), often on credit, while the manufacturer struggles with investment costs, he expands his market network, as he expands his market network, he buys more products from the producer and becomes a more valuable customer. Most of the time, he also delays his payments, and after a while, the buyer-buyer condemns the maker-builder to himself. This is not the case in Germany, Japan, America, China and even Russia, in other words, it is not the case everywhere, and it is not the case in many cultures of the world, except in our commercial culture. In countries with big industries, the one who makes is more valuable, because if he doesn't make it, who will sell it and what will he buy from whom? Unfortunately, we will not be able to go into the psychosocial evaluation of why our commercial culture is like this because our knowledge is not sufficient, but this is the situation in the commercial culture of our country and it is fixed by experience.

So, how does the producer (manufacturer) get out of this bind? The producer will either gather sufficient financial, human and machine power together, sell his land if he has sold his house, sell the clothes he is wearing if necessary, buy raw materials, machinery, employ qualified people, or find investors to invest in his company or integrate with another company. For example, a company that has machines and can produce materials will integrate with another company that has a strong market network (the methodological principle of developed industries is to engage in continuous mergers and/or project partnerships). Thus, it will create synergies.

If we look at the mathematical model of the issue;

Company A: Let strong = 2 in the machine,

Company B: Strong in financing= 2,

Company C: Strong in Human Resources= 2,

Company D: Strong= 2 in the Domestic Market Market Network,

Company E: Strong in Foreign Market Network= 2,

The sum of the values of these companies independently of each other, i.e. without creating synergies with each other, shows a quantitative distribution, i.e. 2+2+2+2+2+2=10.

If these companies merge as a single family and create synergies with their assets and act as a single company, they will have a qualitative (exponential) distribution, i.e. 2⁵=32. 

Şirketler entegrasyon ile güçbirliği yaparak ortaya koydukları değerleri sayesinde “az olsun ama benim olsun” mantığından kurtulacaklardır. Bu hem rekabet güçlerini artıracak hem de partnerlerin üzerindeki iş yoğunluğunu azaltacak, hayatı daha anlamlı kılacaktır. Şirket büyüdükçe istihdam kabiliyeti de artacak, millet ve ülkeye daha fazla değer sunabilecektir.

Companies will get rid of the "less is more" mentality thanks to the values they create by collaborating with integration. This will both increase their competitiveness and reduce the workload on their partners, making life more meaningful. As the company grows, its employment capacity will increase and it will be able to offer more value to the nation and the country.

3. We have failed to create international brands.

It is very important to create brands not only in automotive, white goods and textiles, but in almost every sector. If you can create a brand, your products and products will have continuity. Customer trust and demand on the brand will force you to be better. The brand will provide its creators with not only material but also moral satisfaction and responsibility. Countries with plenty of created brands will also have strong country brands.

Swedish Meatball is the best-selling meatball in the world. It owes its recognition and brand value to the fact that a famous Swedish furniture giant sells this meatball in its stores. In fact, Sweden has officially declared that the original recipe of this meatball is Turkish Meatball and that one of their former kings received this recipe from the Turks, but the world now knows and consumes this meatball as Swedish Meatball. Another country's recipe has been trademarked under a famous brand and has contributed to Sweden's brand value.

A German from Hamburg, who liked the meatballs he ate in Kazakhstan, adapted the same recipe in Hamburg. This meatball spread around the world as hamburger, and thanks to two American hamburger restaurant chains, the world thought that hamburger belonged to the US cuisine.

Turkish Doner is known and loved in Germany thanks to the Turks who traveled there. Today, more Turkish doner is consumed in Berlin than in Istanbul.

4. For a while, monopolization had a high negative impact on industrial production.

The monopolization of companies that had grown up mostly with state support could not be prevented for a while, and this caused the country a serious loss of time and power. For example, those who made one type of car for years, mocked people's minds by offering a rearview mirror on the right side of the car as a model upgrade, collected their receivables from their customers years in advance and delivered their products to their customers years later. They introduced this model, which is no different from communist economies, to people as a free market model. For example, when did our country switch to ABS brakes on domestic cars? In the first place, the state could have met the nation's need for automobiles through SOEs and then privatized these SOEs. Perhaps in the 1970s and 80s, these were considered, but they did not find time to solve them amidst a world of bigger problems (high inflation, the embargo period following the peace operation, political turmoil, etc.).

5. The real estate rent monster has even entered OIZ lands. "My rebellion is not against the construction industry but against real estate rent".

It was like this in the past and still is. One of the biggest cost inputs of industrialists is the "exorbitant rents" they pay. But there has never been a high-level macro solution to this (I think it will start now). TOKİ could have said, "O industrialist, TOKİ will build you an industrial facility, rent it to you through the mortgage system, I will collect the determined price from you as rent every month, and after 20-30 years, when your debt is over, this building will be yours". While the industrialist is in a position of power, would his contribution to the economy be higher if he bought industrial land and built an industrial building, or would his contribution to the country be higher if he invested and increased his production? Is it because Mercedes, BMW, Boeing, Airbus, etc. invested in industrial land that they were able to build, develop and continue to build these automobiles and airplanes? Unfortunately, the lure of rent from real estate has become ingrained in our culture, and we still see and experience the heavy effects of this rent both in housing and industrial facilities. You can sell your house and buy a machine, but you cannot mortgage that machine and get a bank loan. However, if you want to mortgage your house, you can get a loan in two days. The loan you get is nowhere near the value of the house you mortgaged, but you settle for the love of cash. If you cannot pay three consecutive installments of your loan debt, your house will be taken away from you.

Unfortunately, it was only after I started my own business that I was able to examine the value and business model of how the value of the self-sacrificing financing of my industrial investment was received in Germany and the United States. Those countries first look at you and your business plan, that is, they first want to trust you and your business plan, then they measure and evaluate what you are willing to lose for this business. You say you are willing to invest a car, a piece of land and this much cash in financing this business plan and if necessary, you are willing to lose it. They say okay, they measure the value of the cash and real estate you are willing to risk. They mortgage them and give you a loan above that value, their first and only condition being that you create jobs. After a while, when they see that your business plan and your performance are working, they remove the mortgage on your house and land, this time they give you a long-term loan on the condition that you increase employment again, there is no mortgage, your guarantor is the state, you continue on your way and your business.

In our country, if you don't have real estate that can be mortgaged, even if you have an F-22 Raptor, banks will not even say hello to you, let alone give you a loan, until you reach a certain level. The lure of real estate rent has permeated our culture and become a source of guaranteed cash. From this point of view, as long as we cannot make production and production more valuable than real estate, and as long as we cannot culturally internalize this, unfortunately, there seems to be no escape from this spiral...

I am not against the construction sector, on the contrary, it is a valuable and challenging sector that supports dozens of industries and provides thousands of jobs, but what is the real estate rent? Why can't it be prevented? Why can't it be disciplined? It fuels inflation, pushes the society towards unhappiness, and has already taken over the industrialists. Most industrialists are tenants, trying to pay their rent and resigned to their fate. Even if they find a more suitable building, moving, suspending production, bringing their employees to that area... It is not easy at all. I guess it is our fate that rent through real estate has become attractive. We are not a country with little land, why is real estate so scarce and why is its marginal value so high? I am not at the level of knowledge to make a sociological and economic analysis. I am thinking about doing my job, making my production and especially selling it abroad. As the power of production is understood and its contribution to the welfare of our people is felt, social priorities will surely change. If not, let's shut down industry (including agriculture and tourism), buy houses and land, and sit down... Let's all "eat rocks" together!

6. We need to encourage production and the value of production to be recognized in our society.

Sell your house, buy a machine with its cash value, let that machine produce, let you sell what you produce, that machine will bring you a hundred times the added value of the house "over its life cycle", but this requires patience and the ability to keep that machine running. Production is a powerful value multiplier. If there is production, there is food, there is social life, there is a safe life, there is a guarantee for the future.

7. State institutions help industrialists scientifically, but they should also support or increase their support in finding markets and acquiring customers.

For example, from time to time, scientific research support offers come from TUBITAK, "if you have a request to create and/or develop a product on the following topics, scientific support will be provided." This is very good, okay, you get scientific and maybe financial support and you invest in that product, but how will you sell that product to whom? The answer to that is not easy. All your investment and the support provided by the state may go to waste. However, the state's support for market research, guidance and signaling in areas that industrialists cannot reach may be more evident and concrete. Perhaps there are, but the industrialists who write these lines may not know about them.

Today, metallurgical and materials engineering continues to develop as a multidisciplinary branch of science and technology spread across the fields of chemistry, machinery, construction, aerospace, electrical-electronics, environment and medicine, and plays an important role in bringing production processes that are in harmony with the triad of efficiency, energy and raw materials to the sector. In recent years, developments in metallurgy and polymer engineering have generally focused on the optimization of metallurgical processes, numerical simulation and modeling, while in environmental metallurgy applications, issues such as producing disposable waste that does not cause environmental pollution, waste water de-metallization in the form of returning the de-metalized (metal ion-free) solution back to the system as usable water, and the design (and development) of reactors and processes for the reuse of secondary resources are at the forefront.

It is unnecessary to even mention the importance of plastics recycling. An effective plastics recycling industry will not only make a very valuable contribution to protecting our environment, but will also provide a very serious raw material gain for "Turkey, which has the second largest plastics industry in Europe after Germany" in industrial plastic products, which we are completely dependent on foreign raw materials.

Industrial plastics are in the hierarchy of general industrial (commodity) plastics, engineering plastics and performance plastics. As you move up the hierarchy, added value increases but the amount of use decreases. Industrial plastics have the largest market share (see: Plastics Pyramid). Plastics are also the basic input of "Polymer Matrix Composite Materials".

8. We retire people's brains as well as their bodies.

After a certain age, people can get very tired, especially physically, but the brain, with exceptions, is not as tired as the musculoskeletal system of the body (for example, the famous Physicist Stephen Hawking).

Many years ago, one of my elders told me that he saw the logistics commander of the air force of a geographically small but powerful country in the Middle East serving in a wheelchair and was surprised; you cannot see such a practice in the armed forces of many countries, especially in NATO countries. A soldier whose legs are not functional is retired on disability. My elder asked the people next to him how a commander could continue to serve in a wheelchair, to which the people next to him replied "we don't need that commander's legs, we need his brain!"...

Many of our people do not only rest their bodies when they retire, they also rest their knowledge, experience, thoughts and evaluations in retired coffeehouses. However, the knowledge in their heads is a national wealth, not easily acquired, and should be utilized.

9. We have a high tendency to drown in bureaucracy. We cannot think lean.

Bureaucracy is necessary and useful in all organizations, including the family, but when it is exaggerated, it does more harm than good. For example, if you show a manufacturer a technical drawing of the product you want and ask if you can make it, the answer will be; I can or I can't. However, instead of giving this answer, he starts to tell you that you need this document, this agreement, these permits from the government, etc. Okay, if these are necessary, they will all be done, but more important than that is to tell you whether you can make this product or not. In this way, neither you nor we will waste your precious time, and if you can't do it, we will look for someone who can.

Although it applies to everything, especially in foreign trade, speed is very important. You should make your offer to the customer who asks you for a product or service offer as soon as possible, since the average acceptance rate of your offers abroad (worldwide) is 2%. So send 100 offers as soon as possible so that 2 of them turn into orders.

Designing our business processes lean and simple instead of overwhelming them with complexity will always give us the advantage of being able to react quickly.

10. We must be elastic, we must be able to change our processes, organizational structures, products and services depending on evolving and changing criteria and conditions.

Status quo is a Latin phrase indicating the current state of a phenomenon. "Maintaining the status quo" means maintaining the status quo as it is. However, this is not true. Conditions in the world, especially in manufacturing and trade, are changing very rapidly. We need to keep up with these changing situations and, if necessary, ensure that our organization, business model, etc. structures have the elasticity to keep up with the changing conditions.

In this context; "Materials Science and Engineering" is a "very critical and important branch of science and engineering" that includes Materials Engineering, Metallurgy (Metal), Polymer (Plastic) and in some cases Ceramic Engineering, which is very comprehensive and has application areas in almost every industry.

In order to have a deep-rooted knowledge and experience in Materials Science and Engineering, it is not necessary that the raw materials of those materials are located in your own land. It would be very good, but not essential. One of the most established industries in Metallurgy is the Japanese Metallurgical industry. Almost none of the raw materials they transform into semi-finished products come from their own soil. In Polymer, one of the strongest industries is the German Polymer industry and there are no oil and natural gas resources on German soil.