Retail

Sabu M. Jacob, MD @ Kitex Garments

At the helm of Kerala India’s Kitex Garments – a $175 million business – is Sabu M. Jacob, a man who’s first role was to clean the factory’s toilets. What’s more, as Kitex grows, Sabu is taking everybody with him.

The company has grown year after year and is now the largest private employer in the Indian state of Kerala. Sabu describes it as a “recession-proof” business, manufacturing infants’ wear. The company is the world’s second-largest producer of clothing and sells to some of the world’s biggest retailers including Amazon, Walmart, Target, and Mothercare amongst countless others. “It’s unlikely that a kid in the US hasn’t worn clothes made at our factory,” says Sabu who runs his factory from Kizhakkambalam, a village in Kerala.

Kitex Garments Ltd, incorporated in 1992, is part of the larger, diversified Anna-Kitex Group, run by Sabu’s older brother Bobby, and founded by their father. It is from Sabu’s father that he got his start in business as he began working for the group at age 13 cleaning the factory’s toilets. After a year he was promoted to sweeping the factory floor. From there Sabu worked on the textile machines, then as the mechanic, then as supervisor, rung by rung making his way to the company’s manager before starting the garment arm of the group.

Sabu explains that seeing things from the bottom up made him hyper aware that the company operates as a holistic entity. “Even today I give pay raises first to our cleaners… our workers’ comfort and morale is paramount.” For example, he had LED lights installed in sewing machines to minimise eye strain and was one of the first factories in India to install air conditioning. Each upgrade and investment are made with the welfare of the workers as paramount, even more impressive when you consider that Kitex employs 11,000 people.

“There are almost 9,500 employees in our factory’s campus housing, and our dormitories are the best in the world,” exclaims Sabu, “we also want the best food for our workers, we provide over 38,000 meals a day.” With equal importance placed on both the factory and the dorm, many in the industry would consider Sabu to have overinvested.

“The solution is to look after the people who work for you.” It is paying off, as he estimates it returns back 20% better productivity and easier recruitment. “Ultimately, we are getting more from the facility, rather than maximising profit in the margins, we are maximising profit in the output.” And it is true, a typical day for Kitex sees them produce over 800,000 garments.

“When you don’t look to make profits and abuse power, you can make a change,” Sabu says. And improvements go well beyond the factory campus or even the CSR of Kitex. In 2015, Sabu began forming a political party to challenge local issues in Kizhakkambalam. “We have been brought up with a belief that when the business grows, the community and locality should grow too,” Sabu says, “it was my father’s vision that the village should grow along with the business.”

With CSR funds, therefore, 1,100 houses for the poor have been built, alongside the high-quality factory dormitories that also house thousands of employees. Then, there are other initiatives to boost food security, farming, road and Infrastructure development, education and medical support, and water conservation. “The whole idea is to make the village one of the best in the country,” adds Sabu.

It is clear to see why with this aspiration to be the best in all remits that Kitex has been so successful over the last 27 years. Such ambition has been the foundation for the renowned quality of their clothing. Today, the brand is very well recognised catering to the fashion-conscious markets all across the world by a network of more than 7,000 outlets. For greater quality control Sabu has invested millions in new machinery, so they have the best technology available.

Name any machine, we have the best ones, from Germany, Japan, Switzerland, Austria; we import the best!

Every garment is made of 100% combed compact cotton, manufactured using cutting-edge German technology meeting the quality standards and customer demands. Further to this, Sabu also uses imported chemicals for this clothing, his ambition is not to be the same as other companies in India, but go beyond and hold himself to European standards. This has also proved great for business, as competition is limited when baby garments have high safety standards.

“For working conditions, for chemicals, for machinery, I am number one,” Sabu proudly says, “buyers are getting high value products with the same prices they are getting from China and Cambodia.” Being highly competitive on price is vital in an industry where Sabu is not just competing with Indian companies but with all the other nations also exporting to America. There are no plans of stopping either.

Sabu plans to invest $350 million into a new factory site on 450 acres, allowing the company to provide additional direct employment up to 22,000 people and indirect employment to another 18000. The goal is clear: to become number one. This is hugely exciting for Sabu, who delights in the prospect of being able to achieve productivity of circa 2.50 million units produced per day.

But with all this, Sabu makes sure not forget where they started. “It was very hard in 1995,” he reminisces, “the first five years were a struggle.” Even when orders started to come they needed agents for export orders, and were only able to go into direct markets in 2000. Since then there has been a tough but upward trajectory for Kitex.

It is no wonder it is easy to reminisce when they are still serving the same customers as 2000. Sabu explains “even when the company was worth $5,000, we have some of the same customers today,” a consistency that has helped them develop trust with partners. “We provide them stability, and they provide us stability, we have created strong trust over the years, success-based trust”. Kitex as a brand does not compromise on quality and has never looked for quick wins like many other brands that have fallen by the wayside.

Throughout they have sought to exceed delivery and quality expectations, and the result is trust based relationships. “Partially this is because I am so picky”, says Sabu, “I only pick the very top, I only chose buyers in the top 10. We don’t need 100 customers, we need the best customers.” The strategy is evident, some of the largest brands in the world purchase from Kitex, and having a smaller pool of bigger buyers has enabled Kitex to do more business.

When asked about his key business message, Sabu does not hesitate, “honesty” he says. “You should never compromise on anything because of profit, be honest, maintain your quality and you can have longevity. In turn, the profit takes care of itself” and Kitex has taken care of its hometown.

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