Running a business is exactly like raising a child, believes Sabu Jacob, the outspoken, feisty MD of Kitex Garments, the world’s second largest manufacturer of infant garments. “The first five years you have to invest all your time and energy, providing great nourishment and support. From age 5 to 15, you have to monitor changes and adapt,” he says. And once your child is an adult, you can delegate responsibilities..
Jacob who is in the midst of setting up two new fibre-to-garment units– one in Kakatiya Mega Textile Park at Warangal, and the other at Sitarampur near Hyderabad - says during the important formative years of the business, not a screw is put in place without his approval. From plumbing, electricity lines to each part of the machinery, he is involved minutely, obsessively looking into details. “You have to lay a strong foundation with investments in good design and technology,” he stresses.
We are at Kizhakkambalam, the little panchayat on the eastern suburbs of Kochi, that is often in the news in Kerala, for its different development model. The panchayat is governed by Twenty 20, a unique party put up by Kitex Garments, that won the elections for two consecutive terms and is aiming to create a model municipality.
The setting
Our first glimpse of the Kitex apparel park takes us by surprise, although even before setting out, we knew it was one of India’s largest garment factories. The campus is sprawling with a set of swank multi-storeyed buildings in an L shape, with an assembly ground in front, playfields around and dense plantations at the back.
We are here for lunch with Sabu Jacob, and he suggests we take a tour of the unit first, particularly asking us to look at the workers’ living quarters. From yarn to fabric to finished garment, it’s an integrated unit, where 11,000 workers produce over 8 lakh pieces of infant wear every day. We find the large halls on every floor where assembly lines of predominantly female workers are engaged in either cutting fabric, sewing the garments or embellishing the finished piece well lit and modern with pleasant ambient temperature.
Integrated unit at Kitex Garments Kizhakkambalam factory floor
In the block behind is the workers’ hostel, which has large airy dorms with storage lockers, common areas with television, and entertainment facilities, clean toilets and baths and two sprawling canteens in between which is the kitchen, one side rustling up Kerala fare, and the other side a north Indian menu. A large section of the workers are from Jharkhand, Bihar, UP and the hostels cater to every taste. There are quarters for married workers elsewhere on the campus.
Back in the corporate block, we settle down for our lunch with Jacob, a simple but delicious traditional Kerala meal with avial, thoran, sambar, olan, rasam, fish and an exotic pineapple pickle, served elegantly in fancy crockery and cutlery.
The beginnings
Although technically a second generation businessman, Kitex Garments is Sabu Jacob’s very own baby. He tells us how his father M C Jacob started off in 1968 with ten employees a business called Anna Aluminium (named after his grandmother) which turned waste aluminium utensils into new items. “The purpose of the business was to give employment,” he explains. Today Anna Aluminium produces over 800 plus items including rice cookers, etc. Then his father started another business called Chackson, (named after his father Chacko) which is into non-stick ware, and a third business – a spices unit called Sara Spices - named after the youngest sister of his mother.
“In 1978 he wanted to give more employment, and he thought textile is a good sector for that,” says Jacob. Thus began Kizhakkambalam Textiles. “My own career started when I was 13 years old, cleaning the toilet at the textile unit,” says Jacob, the only one among the four siblings – two brothers and two sisters who started work so early. “My elder brother was in boarding school so he escaped,” says Jacob.
From cleaning toilets, for which he got payment not in money, but tasty snacks, he steadily progressed to construction work (head-loading and mixing concrete), then doing maintenance work in the machinery section, then weaving, becoming an assistant weaving master, weaving master and finally a director. “By the time I completed my studies in 1993, I had all the experience. From 8th standard to pre degree, I had worked in all the departments in the factory,” says Jacob . “I got the best training in the world. Even cleaning the toilets – and mind you those days they were primitive ones - had a learning. It made me understand the problem of the workers and when it is salary increment time, I start with the toilet cleaners,” he says, with a twinkle in his eyes. As he explains, his father made him a human being.
One of his first tasks upon joining the company as a director, says Jacob was to prevail upon his father to change the name of the company, which was manufacturing lungis and bedsheets, from Kizhakkambalam Textiles to Kitex.
By now, we are through with the mains, and plates of fruit arrive – delicious looking rambutan, pineapple, jamun and bananas. They are all grown on the campus, says Jacob and we cannot resist this fresh organic produce. Rice Boat at Kochi’s Taj Malabar, is his favourite restaurant, says Jacob, because of its excellent seafood menu. When in America, his favourite indulgence is steak.
Turn in fortunes
His own firm Kitex Garments, began in 1995 as a 100 per cent Export Oriented Unit with 300 employees, and a bank loan, after he studied manufacturing models in Japan, China etc. But the first five years were full of losses, he recounts. The problem was that there were no direct international flights to reach Kochi and buyers were reluctant to come, going instead to established garment hubs like Tirupur, Bangalore and Ludhiana. “I had to go through middlemen or mediators who cheated me,” he says.
His fortunes turned in 2000 when he got a $7,000 order from Nestle owned Gerber Product Company to produce infant garments. By that time Cochin International airport had come up too easing shipping and buyer visits. Incidentally, the relationship with Gerber has endured 22 years and today the American client gives orders worth $75,000.
Even as he was sewing up successful deals, recession hit around 2001. But Jacob says this led him to a discovery. The infant garment business continued to do well, while demand for the other garments he was producing slumped.
“I did research and found that when inflation hits, people sacrifice everything but they do not sacrifice anything for their kids. From that day I decided to specialise only in childrens’ wear,” he said.
By 2005, he had converted the units at Kitex Garments into specialised infant wear units. The insight from early 2000s has proved correct even today. In FY2021-2022 too, despite a challenging business climate, Kitex Garments grew, posting turnover of 1,450 crore.
Jacob now has his sights set on overtaking the Chinese player to become the largest infant wear maker in the world. “Now, when the two facilities at Telanana come up, nobody can beat us for 50 years – we will become the largest,” he proclaims.
The move to Telangana came about as a direct fallout of Kitex’ entry into Kerala politics, believes Jacob. In the last assembly elections, Twenty 20 contested in eight seats and though it lost, it garnered 14.6 per cent vote share – the third largest, ahead of NDA too. Two days after the election results the raids on Kitex factories began and after the 11th raid, Jacob said that he decided to cancel the promise he had made to invest Rs 3,500 crore in new facilities in Kerala. The day he announced his decision, he says, he was besieged by calls from ministers from the four other southern states as well as Orissa, Jharkhand, Maharasthra, Gujarat and UP. But it was Telangana’s offer that excited him most.
Although initially, Jacob says, he had pledged an investment of Rs 2,400 crore in Telangana, he is now pumping in an additional Rs 600 crore. Both sites in the state will together employ 22,000 people and create 25,000 indirect jobs, he says.
His days are busy finalising machinery, equipment and getting things rolling on the two plants. Meanwhile, Kitex Garments has grown with three categories of business – the custom made garments it produces for clients, its own private label – Little Star – and through its licensed brand – Lamaze . Even as Target, Amazon, Walmart are all big clients, Jacob is also sewing up new partners who can absorb the increased capacity.
Fabric being prepared to be cut in the nearby hall
New Strands
One may think his hands are full with all this expansion, but Jacob is also brimming with plans for Twenty20, which swept the Kizhakkambalam Panchayat in 2015 and is now in its second term. In the first term, when Twenty20 took over the panchayat, he says it inherited a debt of Rs 39 lakh. At the end of five years, he says, “we deposited over Rs 30 crore in the panchayat account.”
How was this achieved? Jacob says they discovered that 50 per cent of the Panchayat budget was going into unwanted expenditure, which they ruthlessly eliminated. The balance 50 per cent was on infrastructure but here they discovered there was a lot of recurring expenditure, with the same road, built year after year. “What we did was that whatever project we took, we ensured no leakage of funds, and made sure the construction would be of an order that for 15 years no recurring expenditure on it would be needed.”
In the second term, Jacob says, now that the Panchayat has got all its basic needs, the next step would be to add infrastructure like shopping malls, swimming pools, gymnasiums.
His hobbies are fishing and during his trips to America, he makes sure to pack in a day or two of deep sea fishing. Travel is another passion and his family and his brother’s family travel together – they stay together amicably in a joint family set up, which is possible, he says, because they don’t do business together. His father’s precept was that the siblings should not work together. So, his elder brother manages the other family businesses – now in addition to Anna Aluminium, Sara Spices and Kitex , there is also Scoobee Day bags, while Jacob runs Kitex Garments and is focused on weaving change through radical experiments.