ARES Shipyard: A Trendsetter in Specialized Vessels
(Article originally published in May/June 2022 edition.)
By listening to its customers and focusing on specialized and high-performance vessels, ARES has in sixteen short years become a global player and Turkey’s largest exporter of military and commercial vessels.
“We set goals not with the prediction that the trends will follow but to create the trends ourselves,” says Kerim Kalafatoglu, Chairman of ARES Shipyard. And they’ve been setting trends for the last sixteen years.
When the Kalafatoglu family opened ARES Shipyard in 2006, it embraced the shipbuilding traditions of the past. The Kalafatoglu surname literally means “son of caulkers,” and the family is descended from a long line of shipbuilders.
The timing was fortuitous. The shipbuilding industry was experiencing a golden age globally and especially in Turkey, and the young company proved itself in a very short period of time. It started with mass production of pleasure boats. Then, just before the worldwide recession hit in 2008, it added paramilitary vessels – a timely and strategic decision – and began investing in personnel, facilities, innovative production technologies and R&D with every penny it earned.
Specializing in military, security and commercial shipbuilding, especially in high-performance vessels, it made successful deliveries to the Turkish Marine Police and began exporting to countries such as Nigeria and Georgia. Building on that early success, it signed a 17-ship contract with the Qatar Ministry of Interior in 2014 – the largest naval export program in the history of the Turkish Republic at the time.
Soon, ARES Shipyard was being honored with accolades including World’s Best Patrol Boat Builder (2016), Fastest Growing Company in Turkey (2017) and Best Offshore Boat Builder (2018). It was selected as contractor for the very first naval vessel export program from Turkey to Oman in 2018. In 2020 it was the contractor for Turkey’s largest serial shipbuilding program, and last year it built Turkey’s first and only Armed Unmanned Surface Vehicles.
“When we consider the shipbuilding industry in Turkey today,” says Kalafatoglu, “ARES Shipyard is at the top of the list in terms of institutionalization and sustainability. Our areas of expertise, infrastructure and capabilities in these areas, together with the specialized and high-performance ships we have designed and manufactured, are unique.”
Based in the Antalya Free Zone on Turkey’s southern coast on the Mediterranean, ARES has four separate shipbuilding facilities and a furniture factory with more than 400 employees. The facilities are separate and dedicated to different building materials – steel, aluminum and advanced composites.
“Our biggest clients are for sure Qatar and Oman in the Middle East,” says Kalafatoglu. “However, with our new investments in the commercial and pleasure vessel markets, we are expecting to expand even more in Europe, Africa and Asia by the end of 2022 and again in 2023.” Kalafatoglu himself spends a lot of time engaged in external relations with commercial and government customers and international business development.
The company differentiates itself from others by listening to its customers and providing more than design and product solutions. ARES expects to work with its clients on a personal level and not by poring over hundreds of pages of technical specifications for their vessels. It offers integrated logistics support as well, a systems engineering approach that takes into account lifecycle requirements in terms of supportability, maintainability and availability.
“It’s a comprehensive approach,” Kalafatoglu explains, “which is much more than after-sales support. In a nutshell, we’re not only and simply shipbuilders. We identify ourselves as a total systems service provider related to all kinds of manned or unmanned, above and underwater vessels at sea.”
Unlike others in Turkey, he says the company’s strategy is to be experts in specialized and performance vessels of all kinds, either military or commercial. It has no intention of building large commercial vessels like bulk carriers, tankers or cruise ships. Its market position covers relatively small, high-performance, innovative, serial production and cost-effective vessels, but still diversified.
Location is a big advantage. Being a huge peninsula, Turkey (Anatolia) has always been a maritime country, going back to the Phoenicians but also before, during and after the Ottomans. The Mediterranean itself was named as a Turkish lake. In terms of worldwide logistics and skilled labor, considering costs as well, there are many benefits to doing business in Turkey, but especially in the Antalya Free Zone. Being an export-oriented company, ARES enjoys the incentives of the free zone regulations with an international port providing logistical advantages as well.
ARES sees itself as part of this long tradition with a responsibility to design and build efficient, sustainable, cost-effective vessels and present them to the global market as well as its domestic customers.
What’s in a Name?
Ares, of course, is the mythological god of war – an apt name for a company that, among its many diversified offerings, specializes in the serial production of high-performance commercial and military vessels. But Kalafatoglu says the name has an entirely different provenance.
“As the founding family of ARES shipyard,” he explains, “we have always been environmentalists and animal lovers. While we were discussing the name of the company for a long time, I nominated ‘ARES,’ our golden retriever, the mascot and dear member of our family. He spent the rest of his life happily with us and all our employees in the shipyard. It may be the most irrational and emotional decision taken in ARES Shipyard’s lifetime, but yet the best and most memorable one with no regrets at all.”
So in this case the god of war is also the god of peace, and the company’s diversified product line – starting out in the pleasure boat market, entering the growing market for small military vessels and now once again investing in the megayacht market – reflects that.
Keeping Pace with Decarbonization
Sustainability and decarbonization are shaping the next generation of commercial vessels, and the shipbuilding sector is meeting the future with advanced non-carbon and hybrid designs. The Ministry of Trade regulates the Antalya Free Zone, where ARES is located, and the environmental regulations there are stricter than anywhere else in Turkey. As a result, ARES is in the forefront of the industry with the initiatives it takes.
The ultimate achievement in this aspect of production is being awarded the “Zero Waste” certificate, which ARES achieved last year. For its production facilities in Antalya, it has a new investment plan in place to equip all the flat roof structures – over 40,000 square meters – with solar panels to produce electricity since there is sunshine almost year-round. In addition, the company recycles every bit and piece of waste through its recycling and waste management partners, with whom it has long-term contracts.
In terms of the vessels it builds, ARES encourages its clients to configure their vessels with environmentally friendly equipment such as lower-emission Tier III engines, hybrid propulsion systems running on batteries and even solar panels to support energy needs onboard.
Building a Workforce
The company’s biggest challenge is finding skilled blue collar workers such as technicians and craftsmen. It’s a critical problem not just in Turkey but all over the world as more and more people aspire to be university graduates and don’t even want to consider technical high schools or vocational schools.
Meanwhile, the average age of skilled blue collar workers keeps rising and, says Kalafatoglu, “It’s a real challenge to train the unskilled young workers during actual production when every day we have fewer skilled workers due to retirements. To overcome this, we are in close contact with the local vocational and technical high schools to provide them with internship programs and incentives and offering secure jobs to the students. We also support these schools’ promotional programs to attract more students.”
Automation is not only taking over vessel operations but becoming normal in shipyard production lines as well, and Kalafatoglu says ARES is considering alternatives like unmanned and automated solutions for serial production tasks such as steel and aluminum welding and composite vacuum infusion processes. In addition, mentoring and continuing education opportunities for professional managers and employees will pave the way to the future for the yard.
Toward the Future
Kalafatoglu, in fact, describes his own management style as “open and mentoring” and believes that “ARES has now got ahead of us, the founders. Therefore, we as the board members of ARES are paving the way for our dependable professional managers and employees.”
After 16 years, the founding members are still in charge of the business in terms of strategic decision-making, including investment and R&D, but they’re looking toward the future too. “With every penny we earned,” says Kalafatoglu, “we’ve made investments in personnel, infrastructure and innovative manufacturing technologies. We are constantly upgrading ourselves. We constantly supervise and question ourselves with our professional management staff.”
ARES has come a long way in sixteen years, and the future looks bright. And while the rapid growth of the early years may not be sustainable, Kalafatoglu is fine with that. “We are aware that while such rapid growth can be a source of both pride and self-confidence, it also carries certain risks,” he explains. “By managing them effectively, I believe we have the experience and vision to turn these risks into advantages. As such, rather than comforting us, this growth rate has disciplined us. Our biggest goal for the coming period is of course to ensure continuity of growth in our revenues. Meanwhile, we should also ensure more stable growth rates and strive to eliminate the positive and negative peaks. We have set a modest and feasible target for our annual turnover, 90 percent of which comes from exports.”
He's a firm believer in the fact that you can never say, “Yes, we did it!” Growing a business is an ongoing process, open to change but focused on customer needs and requirements. In a nutshell, it’s about confidence, pride and a heritage in shipbuilding. – MarEx
Tony Munoz is Founder, Publisher & Editor-in-Chief of The Maritime Executive.
AT A GLANCE:
• Founded: 2006
• Location: Antalya Free Zone, Turkey
• Chairman: Kerim Kalafatoglu
• Vessels: Patrol craft, naval craft, utility & support craft, pleasure & passenger craft, autonomous unmanned systems
• Employees: 400+
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.