Turkey’s state-owned defense company Mechanical and Chemical Industry Corporation (MKE) has signed a major export agreement with Egypt’s Ministry of Defense covering both ammunition sales and the establishment of production facilities in Egypt.

Sources cited by Middle East Eye said the total value of the deal is approximately $350 million. The agreement was signed during Turkish President Recep Tayyip Erdogan’s official visit to Egypt, where he met with Egyptian President Abdel Fattah al-Sisi.

In a statement released on Thursday, Turkey’s Ministry of Defense said that the agreement includes the export to Egypt of the Tolga short-range air defense system, developed to counter aerial threats—primarily unmanned aerial vehicles. The system is valued at $130 million.

In addition, MKE will establish a 155 mm long-range ammunition factory in Egypt, along with production lines for 7.62 mm and 12.7 mm ammunition. According to the same sources, the remaining $220 million of the agreement covers the cost of these industrial investments.

The Turkish Defense Ministry added that a joint venture between MKE and Egyptian authorities has been agreed upon to operate the new facilities and to strengthen Egypt’s export capabilities in the defense sector, both domestically and across the wider region.