Arcanus Aerial Systems has entered into a five-year agreement with FeralX Systems to manufacture components for unmanned aerial systems, aiming to boost Canadian production capacity. The deal, effective immediately, allows FeralX to serve as a non-exclusive contract manufacturer, producing and delivering drone components from its facility near Toronto.

This collaboration highlights the increasing demand for domestically produced defence systems in Canada, addressing current manufacturing constraints in the sector.

Arcanus Aerial Systems has signed a five-year agreement with FeralX Systems to manufacture components and assemblies for its unmanned aerial systems, as the companies look to expand Canadian production capacity.

Under the agreement, dated May 12 and effective immediately, FeralX will act as a non-exclusive contract manufacturer for Arcanus. The company will manufacture, assemble, test and deliver components for drone platforms based on purchase orders issued by Arcanus, according to a June 5 release.

Production will take place at FeralX’s existing facility outside Toronto, which the companies said can support initial deliveries of interceptor drones. The partners also plan to establish a new dedicated facility to support production of larger platforms as volumes increase.

Arcanus, a Toronto-based developer of unmanned aerial systems, said it has also committed to a $1-million equity investment in FeralX, subject to closing. The funding is intended to support production scale-up and working capital.

The agreement does not guarantee minimum production volumes but includes a five-year term with options to extend. It also allows both companies to expand or reallocate manufacturing capacity as demand changes.

FeralX will support manufacturing for Arcanus’ existing programs, which include contracted orders as well as additional opportunities across allied markets, the companies said.

The partnership comes as demand for domestically produced defence systems increases and manufacturing capacity becomes a constraint, according to the release.

FeralX manufactures small arms and unmanned systems and operates a production facility in Canada.