There are two coach factories in India, the Rail Coach Factory in Kapurthala, Punjab and Integral Coach Factory in Chennai. Both these coach manufacturing units have manufactured thousands of coaches for the Indian Railways. A third Rail Coach Factory is also going to be established in Kerala and people of Palakkad can be proud of the fact that the proposed site for the Coach factory is Kanjikode.
On the 16th of February 2012, the Union Cabinet approved the long-pending demand of Kerala for setting up a new rail coach manufacturing unit as a joint venture. Last month, Aryadan Mohammed, State minister in charge of railways, said that the Kerala Government is committed to set up the proposed coach factory in Palakkad, and after a meeting with the members of the parliament, he said that the State wanted the project to be implemented as a joint venture between the State and the Center. The nod from the center for the project came after the Kerala Chief Minister Oommen Chandy met the railway minister Dinesh Trivedi last week, requesting speedy approval of the project. The estimated cost approved is 550 crore, excluding the cost of land, and the factory will make 400 coaches annually. About 239 acres of land is available in Kanjikode, for setting up the coach factory, and this land will be purchased by the railways from the Kerala State Government, who will contribute 26% of the equity in this joint venture.