The Kerala Maritime Board (KMB) has signed a PPP agreement with a private developer for the development of a ₹1,000 crore (US$106 million) shipbuilding yard at Ponnani Port in Malappuram district, Kerala, India.

The facility, which will be Kerala's second shipyard after Kochi, will be developed on the western side of Ponnani Harbour. The ₹1,000 crore project will be implemented in two phases and will focus on the construction of small and medium-sized vessels, positioning Ponnani as a key shipbuilding hub in the state.

In the first phase, the project will establish facilities for building small vessels, including passenger ferries for short-distance routes, regional cargo ships, and feeder vessels serving smaller ports. A dedicated wharf will be constructed near the breakwater to support these operations. The phase will also include the development of core infrastructure required for the future expansion into large-ship construction. An investment of approximately ₹200 crore (US$21 million) has been earmarked for this phase.

The shipyard will cater to the growing demand for small and medium-sized vessels, supporting the state government's plan to develop minor ports under the KMB for regional cargo transportation and tourism-related passenger services. In the second phase, expected to be implemented over the next decade, the facility will expand to manufacture large vessels, elevating Ponnani's status to that of a major shipbuilding centre comparable to Cochin Shipyard.

The project also includes the establishment of a shipbuilding training institute to develop a skilled workforce for the shipyard. Ponnani Port, one of the oldest historic ports on the Malabar Coast, is among the five non-major ports identified by the state government for development. Located at the mouth of the Bharathapuzha River, the port features two breakwaters that facilitate the movement of fishing vessels to and from the fishing harbour. With its existing infrastructure and strategic location, the port also has the potential to handle cruise vessels and break-bulk cargo operations.