Synthite Managing Director Dr.Viju Jacob remembers the five years since he had taken the reins of the company, which was founded and brought up by his father CV Jacob, and the company’s amazing growth to be one of the majors in the global market. Dr.Viju explains about his successful marketing ways and his plans towards taking Synthite to a Rs 6000 crore company soon.
When Dr Viju Jacob took over the responsibility of leading Synthite Industries, its business share in the Indian spices market was just worth Rs 3 crore. In years it has grown to become Rs 450 crores.
Even during these Covid-induced hard days, the Kerala-based company, with diversified interests in spices, oleoresins, flavours and hospitality, posted a 25 per cent growth under his able stewardship.
He gratefully acknowledges the qualities he has picked up from his father, like discipline, transparency in dealings, patience and love to work hard, and above all, faith in God, for his success in life and career
If anybody asks about this spectacular marketing success, he would wholeheartedly give the credit first to God’s grace and the able patronage of his father C V Jacob.
He gratefully acknowledges the qualities he has picked up from his father, like discipline, transparency in dealings, patience and love to work hard, and above all, faith in God, for his success in life and career.
He remembers the regular evening prayer at home led by his father. Everybody at home unfailingly takes part in it. It is mandatory.
He talks first about the invisible presence of God in all his activities, hence nothing goes wrong. There are many instances where God’s interference saved his business. Synthite was established in 1972 as a spices marketing company providing garden fresh products. The company’s quality products won the market fast and earned the credibility “reliable.”
Dr.Viju joins the company’s management in 1984. His first job was in the marketing department. His father was confident that his son was enterprising and ebullient and he could do wonders for the company. The ensuing years proved Jacob senior right in his assessment of his son.
Dr.Viju noticed temples in India need huge quantity of marigold flowers for daily rituals and decorations. Most of it are coming from Tamil Nadu. He found a potential business opportunity in it and its by-products. He did study about marigold and its extract, which has high demand abroad for manufacturing many related products.
After a thorough market study, the Synthite management decided to enter the business of producing marigold extract with an eye to capture its foreign market. The responsibility fell on Viju’s shoulders.
Tamil Nadu is the place where marigold is produced in large scale and it has a 100 per cent market across India for its umpteen temples and public functions. He met some of the marigold producers and expressed his willingness to buy up to 20,000 tons of flowers for his new project. The farmers could not believe it at first as it was a huge demand they could not meet immediately, but Viju convinced them and ensured them a guaranteed return. Some farmers came forward and started marigold farming in a large scale which was enough to meet Viju’s need.
It was the year 1987.Viju’s new project flowered fast and by 1998 Synthite needed 45,000 tons of flowers to satiate its needs. In no time, Synthite became leader in marigold extract business.
Its major client abroad was Biochemist, a laboratory in Mexico. They bought most of the products and the business was running smooth until 1991.
Then due to an internal problem the Mexican company stopped its work temporarily and stopped buying extracts from Synthite.
It was a huge setback for the company as it had to find a new buyer for about 150 tonnes of Oleoresin extract worth Rs 20 crore lying in the company marked for Mexico. It was not that easy.
Viju rushed to Mexico to find out the reasons directly. He met the owners of the company and discussed ways to revive the business. Nothing could be worked out. He decided to return to India via Hong Kong and Singapore as there was no direct flight to India.
While travelling from Hong Kong to Singapore, he got himself introduced to the person seated next to him in the flight, sipping a Chinese beer, Antony, a senior executive working at a Singapore chemical company called Kemin. He was returning from China. Then the conversation progressed toward business matters.
Antony told Viju that he was in a sad state of mind as he went to China to buy marigold extract for his company and that did not materialise. He said he wanted 150 tons of marigold extract immediately.
Viju’s face brightened up. A quick thought flashed across his mind,” my God , Antony wants 150 tons of extract, I have it here, with me in the factory, the exact quantity ready to be delivered. ” He thanked God in his mind for guiding him to the right person.
Viju offered him the required quantity.
“Are you serious?” Antony could not believe it. He was surprised to hear this, that also from a total stranger.
Viju revealed to him that Synthite is the major in exporting marigold extract to different countries. Antony was convinced of Viju’s credentials. He agreed to buy the entire product at the offered price, 19.50 cent per gram.
Next day he officially signed an agreement with the Australian owner of Antony’s company Kemin at its office in Singapore.
Viju was very happy going home. He was extremely thankful to God for the timely intervention which saved his business. Had he not met Antony on the Hong Kong flight, Viju does not dare to think what would have happened to his business.
Synthite and Kemin continued their partnership for many years.
Viju strongly believes God is always with him, in every moment in his life, firmly holding his hand, keeping his steps not falter.
Excerpts from the interview with Viju Jacob
Business Voice: You became managing director of Synthite five years ago, taking over from your father, the legendary industrialist CV Jacob, who inscribed the company’s name in golden letters on the global industry map. How do you see the effort you put in to continue the success story?
Dr.Viju Jacob: Kerala has been going through a very difficult period, struggling through the flood, Nipa virus attack and now the corona virus spread that shut down the entire world. Though some part of the world is slowly recovering, India is still reeling under the pandemic. We also suffered, but by the grace of God, none of it could stop the company’s success ride.
There was also a strike in the company for the first time in its history, called by some union activists. But, I must tell, nothing affected the company’s growth rate. In fact, despite all these difficulties, it achieved a double digit growth rate and the last five years were most profitable in the company’s history.
During this period, we opened our offices in the Netherlands, Brazil and Vietnam, apart from opening two factories in China.
As managing director, what are the important decisions you had taken during this period?
Our decision to go to Brazil was the most important. We could achieve a double digit growth in a short period. Our decision to spread out to Vietnam, Sri Lanka and Beijing also proved it was a right move.
Easy and cost-effective availability of raw materials is very important for any company to survive. Our decision to open a new factory near Beijing solved this problem for a certain limit.
The Netherlands office was opened with an aim to capture the European market. This and our office in Germany have been doing a wonderful job during this Pandemic time.
Since the beginning the company has been concentrating on overseas markets. What made you realise that take for your products?
One day at a business meeting I told my father our share in the Indian market “is very poor.”
“OK, then you take that responsibility too,” he told me.
I know he has great confidence in me. That’s how I entered the Indian market.
Our market share then was worth only Rs 3crore. I found everybody is marketing only oleoresin. I thought I must market something different. We turned to cooking products, different blends which can be directly used for seasoning delicious food items such as chicken tikka blend, barbecue etc.
I travelled across India for two years carrying my laptop loaded with the new product ideas. I met all my customers, such as global players like Nestle, Unilever and Pepsi, explained to them about the products and took to heart their valuable suggestions and changes.
Yet it was not very easy convincing them.
I sought for an appointment with the purchasing manager of Nestlé. The meeting time given to me was 1.30 afternoon. I waited for him at the reception until 5. 30 in the evening. He didn’t turn up. At that time Netsle’s HR head Dr Choker came down to the reception and seeing me sitting there came to me and asked why I was sitting there. I told him about the purpose of my visit and my appointment with the purchasing manager Karthik.
He immediately contacted him on phone and asked him to come to the reception.
Karthik came down running. I told him about my appointment at 1.30 pm and I was waiting for him.
Dr Chonker consoled me and said: “Mr Jacob, don’t get upset, you are going to become the biggest supplier of Nestlé.”
His words came true. We are the biggest suppliers of Nestlé so far.
The products were an instant hit. Now the Synthite share in the market is worth Rs.450 crore, a big leap in five years.
What is the secret of success of Synthite and Dr Viju Jacob as the managing director of the company?
Anybody can start a company. That’s easy. Making it sustainable and successful is not that easy.
The entrepreneur must have knowledge about his enterprise. Knowledge about the market for his products, availability of raw materials, employers’ ability, willingness to work hard and work with his team. All these things matter when it comes to success of a company.
As functioning of Synthite, Even as school going student I used to work during vacations at the lab, R&D and in the office. I know everything about our company. That’s how my father brought me up.
What is the basic quality one needs to become an entrepreneur?
Patience, love to work hard, ability to take on challenges, willingness to find out reasons if anything goes wrong and correct them, sincerity and clarity in dealings and discipline, these are the minimum quality apart from raising trouble-free funding, to become an entrepreneur, I feel.
How much did your father CV Jacob as an entrepreneur influence you in your life and career?
It is inexplicable. He has been my role model, leading light in everything in my life.
While looking back, how do you see your and the Synthite’s journey so far?
No journey is smooth. There must be problems, otherwise it cannot be called a journey. If everything goes smooth, it may lead to a false pride and lethargy. Some problems are always good.
Our hospitality section faced a lot of problems during the lockdown period. Our Ramada fell into deep trouble. We had to reduce the salary of the staff by half. But we did pay all arrears in February. I am happy that our employees are very co-operative.
Our another project Rivera is also facing problems. We are selling it as apartments. There is good response.
If there is a problem, there is a solution too, I believe. There is no employee-employer difference in Synthite. We live as a family. That is what my father practiced and taught us.
We have investment in CIAL (Cochin International Airport). The first profit we received was distributed among our employees . We provide education assistance including scholarships to the children of our employees. We provide houses to those who have no houses. It is part of our policy that none among our employees should be without a house of his own. We also provide mobile phones and bikes. Senior employees are given car loans without interest. The CVJ Foundation takes care of the seriously ill employees.
There is insurance coverage for the entire family of an employee. Above all s, we are the first private company here to provide pension to all retired employees.
Synthite provides all these benefits, yet there was a strike in the factory in 2018; Why did it happen?
Synthite is one of the best paymasters. We give our employees over 20 per cent bonus every year, apart from so many benefits. Nobody knows what was the reason behind the strike, not even those who went on strike, I believe.
For the last 40 years all our units functioned happily, without any grievances and a union. We always treated our employees as part our family.
I was so upset. This is for the first time that there is a labour strike at Synthite. It deeply hurt us.
I met Chief Minister Pinarai Vijayan and explained to him about the situation. He agreed with me and said he would talk to the union leaders.
I must thank him that before I reached Synthite back, I received the message that
“the strike is withdrawn.”
I am always thankful to the chief minister for his timely intervention.