MKE Sets Up Zafer, Its First Wholly Owned Company in Africa, in Egypt
Turkey’s state-owned ordnance maker MKE (Mechanical and Chemical Industry Corporation) has registered a wholly owned subsidiary in Cairo, giving itself for the first time a permanent legal vehicle to run joint production inside an African market rather than simply sell into it from Ankara.
MKE General Manager Ilhami Keles announced the move on the sidelines of the second El Alamein International Airshow, which closed on September 10 at El Alamein International Airport in El Dabaa. The new company, named Zafer (“Victory”), is incorporated entirely under Egyptian law, with all shares held by MKE. According to Keles, Zafer will manage MKE’s commercial activity in Egypt and act as the operating platform for joint-production ventures with Egyptian partners, with an explicit mandate to also serve customers elsewhere in Africa and the Gulf.
“Egypt is a country with which we can do joint business,” Keles said, distinguishing it from markets MKE treats purely as buyers. “We signed a contract with Egypt for the joint production of energetic materials and explosives, as well as the joint production of various ammunition equipment,” he said, adding that MKE is “moving forward with joint production integrating Egypt’s capabilities with our turret and command-and-control systems, as well as our hard-kill and soft-kill solutions.”
From MoUs to an operating company
Zafer is the institutional endpoint of a cooperation track that has moved in concrete steps over the past seven months. In February 2026, during President Recep Tayyip Erdoğan’s visit to Cairo, MKE and Egypt’s Ministry of Defence signed a $350 million package: roughly $130 million covering export of MKE’s TOLGA short-range air defence and counter-drone system, and about $220 million to establish Egyptian production lines for 155mm long-range artillery ammunition and 7.62mm and 12.7mm small-calibre rounds through a joint-venture arrangement.
That was followed on September 3 by a narrower memorandum of understanding signed at the First Balkan Shield Industrial Expo in Sarajevo, this time with two Egyptian state factories under the Ministry of Military Production — Heliopolis Chemical Industries Company (Military Factory 81) and Helwan Company for Engineering Industries (Military Factory 99) — covering technical exchange and use of existing Egyptian manufacturing capacity. At El Alamein, where Turkish Aerospace and ASELSAN were also courting Egyptian buyers, MKE added a further memorandum with Egypt’s Ministry of Military Production specifically on joint production of energetic materials, explosives and ammunition equipment.
Zafer is what turns that sequence of framework agreements into a functioning business. Rather than each deal running through Ankara on its own terms, Egyptian production, procurement and partnership activity will now sit inside a single Egyptian legal entity that MKE owns outright — a structure that lets the company sign local contracts, hold local licences and manage joint-venture stakes without renegotiating its status each time.
Selling the platform, not just the product
Keles framed the shift in terms that go beyond Egypt specifically. “The ability to transfer technology has begun to take precedence over product exports,” he said — a statement that matches how MKE has structured its recent international activity generally. The company sold TOLGA to Egypt in a deal Keles described as introductory, intended to put the system into Egyptian service and open the door to sales across Africa and the Gulf rather than to generate a large standalone contract.
MKE is running comparable plays elsewhere. The company is establishing joint ventures in Canada, holding investment discussions in the United States, and pursuing tenders with local-production requirements in Malaysia and Indonesia — part of a wider Turkish pattern, from why buyers of Turkish drones increasingly ask for local production alongside the hardware. Domestically, MKE has also taken an equity stake alongside Baykar in a new industrial investment in Samsun. Zafer is the first time this approach has produced a standing foreign subsidiary rather than a memorandum or a minority stake, and it gives MKE — historically a supplier of ammunition, gun systems and chemical propellants to the Turkish armed forces — a template it can reuse as it looks for the next market willing to co-produce rather than simply buy.
Why it matters beyond Türkiye
For Egypt, the arrangement fits a broader pattern: after a decade-long diplomatic rift that only began to thaw in 2021, Cairo has spent 2025 and 2026 rebuilding defence-industrial ties with Ankara faster than with most other suppliers, running joint naval and special-forces exercises alongside a growing list of agreements — including HAVELSAN’s own sales deal with Egypt’s AOI for the Hamza-1 VTOL drone, signed the same week. A domestic ammunition and explosives production base built with Turkish technology reduces Egypt’s reliance on imported ordnance at a time when several of its regional neighbours are rearming.
For Türkiye’s defence-export drive, Zafer is a small but telling data point. Ankara’s stated aim is not simply to sell more hardware abroad but to embed Turkish production know-how inside partner countries’ own industrial bases — the same logic behind ASELSAN’s supplier network in Poland. A wholly owned foreign subsidiary, rather than a local agent or a one-off contract, is a heavier and more permanent commitment than most Turkish firms have made in Africa to date, and it will be watched by other state-owned Turkish manufacturers weighing whether to follow the same route into the continent.
Sources: Anadolu Agency, TRT World, Breaking Defense, Daily Sabah.
