DroneShield (ASX:DRO) established a counter-unmanned aircraft system manufacturing in Europe under a new partnership, with production underway and delivery scheduled for the middle of the year, the defense technology company said in a statement on Wednesday.

The contract manufacturer will undertake full turnkey assembly and component manufacturing, per the statement.

The company's global manufacturing expansion is expected to boost its combined total annual production capacity to AU$2.4 billion by the end of the year from about AU$500 million in 2025, according to the statement.

Shares rose nearly 2% in midday trade Wednesday.