From a family enterprise to a global natural extracts powerhouse, Viju Jacob has steered Synthite Industries well beyond its roots as one of the world’s largest producers of spice oleoresins. Today, the group’s footprint spans nutraceuticals and wellness supplements, hospitality through the Ramada brand, and an impressive portfolio of businesses driven by innovation and value addition. In this interaction with TNIE, Viju reflects on the company’s evolution, global expansion, innovation, investment in CIAL, business climate in Kerala, and more.
Could you tell us about the beginning of Synthite?
My father, C V Jacob, started Synthite in 1970 with just black pepper extracts and oleoresins, and 10 employees. We could not make our first exports until 1976, as we struggled with the extraction process. Our US partner identified the technical problem, sent experts to Kerala, and helped us improve the product by reducing the solvent content. At that time, the oleoresin industry was virtually unknown in India.
When did you join the company?
In 1982. Before joining formally, I had worked on the shop floor, in R&D and quality control during my college holidays. When I joined, I realised how difficult it was to introduce new ideas. There was a fixed way of doing things. I often argued that unless we encouraged new thinking, we could never develop new products or grow the business.
What was the outcome of those efforts?
After I joined, we established our first factory outside Kerala — Coimbatore, in 1985. We set it up to produce floral extracts from jasmine, tuberose and mimosa under a tie-up with Karl Pfizer, a supplier to the French perfume house Guerlain. Establishing the factory and building a network of jasmine growers were huge learning experiences.
Why Coimbatore?
We actually went there in search of land. But, as it turned out, there was jasmine cultivation in the locality, though not on a large scale. We had to develop it into a large-scale activity. We identified people living near the factory who had unused land. We supplied them with jasmine saplings and assured them we would buy back the flowers.
How challenging was the process?
In the perfume industry, quality matters far more than quantity. Every batch had to be approved before it could be exported. In fact, a representative from Guerlain would visit our plant to approve the quality.
Was there a family background in extraction?
No. My father was a civil contractor involved in constructing dams, bridges and tunnels. We had cardamom plantations in Munnar, but no experience in extraction.
How did your father enter this business?
During a visit to Japan in 1970, he became interested in extraction technology. And while in the US, a cousin suggested he focus on natural extracts rather than synthetic ones because Kerala had abundant spices. That idea became the foundation of Synthite.
Did you source pepper from Kerala?
Yes, initially. But today, we source mainly from Vietnam and Sri Lanka because those countries produce the varieties we require. If you look at global pepper production today, Vietnam produces about 2.5 lakh tonnes annually, Indonesia 70,000 tonnes, and Sri Lanka 30,000 tonnes. India produces only about 60,000 tonnes.
How did Synthite expand into other spice extracts?
After pepper, we moved into ginger, turmeric, chilli and nutmeg. Turmeric was particularly challenging because its extraction process was completely different from pepper. It took time, but today it has become a successful business. During a recent visit to the US, I secured an order worth about Rs 180 crore for turmeric products.
Where do you source your raw materials from?
We source turmeric through contract farming in Karnataka and also import it from Vietnam and Indonesia. Chilli comes mainly from Tamil Nadu, while much of the pepper and nutmeg is imported because Indian production is no longer competitive.
Are you shifting operations overseas?
We have buying operations in Vietnam and Sri Lanka. We establish production facilities abroad only after careful viability studies. In Brazil, we have successfully set up a blending facility for oleoresin products. There are plenty of opportunities in Brazil. In fact, South America is booming because of the uncertainty created by US tariffs.
Is the extraction business still an attractive sector for new players?
Synthite accounts for nearly 40% of the global spice oils and oleoresins market. Most of the remaining production also comes from Kerala. In many ways, the industry here grew because of Synthite. Many entered the business after seeing our success. There is room for new players, but this business demands enormous working capital. A factory costing Rs 100 crore may require several times that amount to finance inventory. It looks easy from the outside, but it is very capital-intensive.
When did Synthite begin expanding overseas?
Our first overseas factory was in Xinjiang, China. We operated there for about two years before shutting it down because of local issues. Later, we established another facility near Beijing. Today, we have manufacturing facilities in China, Vietnam, Germany, the Netherlands, and some other countries.
How has global competition changed?
Chinese companies have become extremely competitive, especially in paprika oleoresins, chilli extracts and seasonings. We have to keep improving to remain competitive.
Do you supply directly to global food companies?
Yes. Through our subsidiary Symega, we supply seasonings to global food companies. We even set up a dedicated plant to supply Pepsi for products such as Kurkure. Today, we are among the major suppliers to Pepsi and Nestle.
What is the size of the global market?
The global seasoning and extraction market is worth around Rs 30,000-40,000 crore. Synthite’s annual turnover is about Rs 5,000 crore.
What drives innovation at Synthite?
Innovation is useful only if it results in products customers want. Consumers today are far more aware of ingredients and expect healthier options without compromising on taste.
Could you tell us about your industrial ecosystem in Kadayiruppu (in Kolenchery)?
When we started our factory, Kadayiruppu was a remote village with poor roads. My father believed infrastructure was essential for development. The economic reforms of the early 1990s also helped exporters like us. We earned good profits. We reinvested that in expanding the business.
How did Synthite become an investor in Cochin International Airport Ltd?
Around 1993-94, then chief minister K Karunakaran asked my father to invest in the project. When the proposal came before our board, most directors opposed it. After the meeting, my father sought my opinion. I told him that if it were my decision, I would invest without hesitation. I had always been fascinated by aviation and even wanted to become a pilot. My father simply said, “Write the cheque.”
Are you still the largest shareholder of CIAL?
I am still a director. We are now the second-largest shareholder because we sold some of our shares. Looking back, that was a mistake. CIAL has done exceptionally well. The share price has gone up significantly, and the company is paying a 50% dividend. The airport is also expanding with more aerobridges, which will help attract additional international flights.
There has been resistance to taking CIAL public. What is your view?
I have always supported an IPO. Once a company reaches a certain size, it needs access to capital and the ability to attract top talent. Ultimately, the decision rests with the state government.
Synthite is also planning an IPO. When will it happen?
The process is under way, and we expect it in about one-and-a-half years.
Why does Synthite need an IPO?
We don’t need money for survival. But if the company has to grow further, an IPO is the natural next step.
What happened to your vegan products such as jackfruit meat and bambara milk?
That venture was a failure. Bambara milk never came close to the taste of cow’s milk. Vegan products were a global trend for a while, but consumer preferences have shifted. Today, people are more interested in protein and nutrition.
Is that why you are focusing on supplements?
Yes. Supplements are one of our fastest-growing businesses. Under our Natxtra brand, we have around 25 products. The market expanded rapidly after the pandemic as people became more health-conscious. We have already crossed about Rs 15 crore in sales. We were offered Rs 100 crore deal for the division, but I declined.
Have you considered entering the fragrance business?
Not yet. It is an enormous industry, but also a very specialised one. Building a fragrance business requires huge investments, a large team and years of expertise.
Can you elaborate on the importance of R&D in your business?
I wouldn’t call it R&D. I would call it innovation or creativity. When I introduced chicken tikka blends and barbecue blends, everyone asked the same question. Today, those blends alone generate sales of about Rs 180 crore in India. Everything is now done by robots. I remember visiting a perfume manufacturing company in Switzerland. They showed me a plant where a robot had been programmed with formulations. Once the recipe was fed into the system, the robot automatically selected and blended all the required ingredients. After seeing that technology, I introduced the same system in my own factory. Today, I no longer need 20 people on the blending line. Two are enough. Once the recipe is entered, the robot takes over. It has virtually eliminated human errors.
You could be accused of an anti-human approach…
Then what will we do when AI becomes even more widespread? The future belongs to technology. If we don’t catch up, we will fail. Human beings cannot maintain 100 per cent concentration all the time. Robots do not have that limitation. Humans are vital in only two areas — innovation and quality control.
There is growing public concern over food additives, food colours, chemicals and adulteration. How do you address these concerns?
Today, European Union regulations are extremely stringent. The US has also moved away from synthetic colours, and that was one of the reasons we recently received a major order. The US plans to phase out synthetic colours completely by 2028.
What about the Indian market?
In India, natural and synthetic ingredients are used. But the distinction is not always straightforward. There is a category called NI, or Naturally Identical. These are ingredients produced using a combination of natural and synthetic sources. The perfume industry is also preparing for new regulations under which synthetic notes will gradually be eliminated.
Many natural products are affected by pesticide residues. How do you deal with that?
It is a major challenge. We pay farmers a premium for cleaner produce. Ultimately, our customers benefit from that investment. Ironically, the highest use of pesticides is in the US. But since we are still considered a “third world” country, they dictate terms to us. That said, we are moving away from such a situation. We have to stay strong and eventually reach a position where we can dictate our own terms.
Could you tell us about your entry into chocolates under the brand ‘Paul and Mike’?
Before I started Paul and Mike, I used to make small chocolates using combinations of nutmeg oil, ginger oil and other ingredients. I got a Kochi-based chocolatier to make them, and we did some domestic business. Before long, however, they took my formula and started selling chocolates on their own. So we decided to make our own chocolates under the brand Paul and Mike. It has been seven years now. The business is running at a loss at present, but it will rise.
How would you compare the business climate in Kerala back in the 1980s and now?
We don’t depend on policy benefits from the government. They don’t always understand the nuances of industry. In 2018, the CPM protested against us. We wondered why. After all, we were among the highest salary-paying companies here. Everybody was insured. We were also the first private company in India to introduce a pension scheme. I met the then chief minister Pinarayi Vijayan, and told him, “My drivers earn a monthly salary of Rs 60,000 and plumbers get Rs 80,000. How can we afford to pay more than this?” He told me the matter was closed, and soon the protest ended. I have great admiration for him. We need chief ministers of that calibre. V D Satheesan is no different. I know him personally. We studied together, he was my junior. He is a gem of a person. Recently, he introduced me to some of his colleagues as one of his best friends. He doesn’t forget… that’s a good quality. Once people reach a certain level, they often forget where they came from and the people who were part of that journey. Satheesan is not like that.
After the 2018 episode, were there any further issues?
No. In fact, the company grew the most during the pandemic. There were discussions on how spices improved immunity, and we were shipping container loads of products. Synthite grew by 50 per cent and became 30 per cent more profitable during that period.
How many people do you employ?
Including our hotels and Ramada Resorts, we have around 3,000 employees worldwide.
How many are in Kochi?
Around 1,900. We employ more people here than anywhere else.
Will there be further investment in Kerala?
I don’t think so. We already have factories in Andhra Pradesh, Karnataka and Tamil Nadu. If you hear the offers made by the Odisha government, you will be shocked. Huge subsidy, 100 per cent free land…. they will grant whatever you ask for. See, that is how a state grows. People at the top should have a vision. If they spend all their time politicking, they won’t have time to focus on growth.
Cusat has a centre of excellence in your father’s name. How is it functioning?
We donated Rs 10 crore and are yet to contribute another Rs 10 crore. There should have been regular meetings and greater involvement, but nobody seems to have the time. They are doing something… but if one undertakes a project, it should be foolproof. That sector needs to grow.
Did you expect a supply of trained people from there?
Yes. But, instead, we recruit many people from Karunya University (in Coimbatore) because it has a proper food technology department. Around 40 per cent of our employees come from there.
Are you planning to enter any other sector?
We are looking at injectables. At present, we supply supplements as tablets. We are now discussing injectable supplements that are administered on a doctor’s prescription.
Is this the next big step for Synthite?
Pharma is a huge industry. Hyderabad, for instance, has grown because of pharmaceuticals.
Are you considering a plant in Hyderabad?
Hyderabad has the right ecosystem. We don’t get enough skilled people here. In Mumbai or Delhi, people may go out for dinner at 11pm. Here, by then, people are asleep. That mindset has to change. Many professionals from cities like Mumbai and Delhi feel there is no life after work in Kerala. That is one of the state’s biggest drawbacks. We need to create a better work-life environment.
What keeps you motivated?
I always seek to do something different. I want to keep learning. I like having people around me to discuss ideas with. We would sit around a board and debate things.
What about your staff?
I never see the people in my company merely as employees. I consider them friends. Around 3,000 employees work with me. I am also an employee — perhaps the 3,001st.
During the pandemic, everyone’s salary was reduced by 50 per cent. After the crisis, I repaid the amount with an additional 20 per cent bonus. If tomorrow Viju Jacob falls sick, the employees will take care of everything. That can happen only if we treat them as members of our own family. That’s the most important quality of leadership in any industry. Moreover, we discuss everything together. I look at whether I can learn something from them. Today, much of the learning happens through AI. It’s easy to sit outside and tell stories, but unless you actually get involved, work with your hands and brains, real learning won’t happen. That’s the creative mindset I feel some in today’s generation are lacking.
People often ask how Synthite became a ‘No.1’ brand. What would you tell them?
I will tell them I was No. 4 once. When you’re fourth, learn from the third-ranked player and compete with them. Once you become third, compete with the second. From second, compete with the first. If you try to challenge the market leader right from the beginning, the capital, manpower and investment required will be far beyond your capacity. That’s how we learn in business. We shouldn’t rush to become number one overnight. That’s a dangerous game. I think about how we can grow in the long run. Most of our villa projects are in the suburbs. A four-bedroom villa there costs around Rs 1.9 crore, including registration, today. My father used to buy land parcels like these. At the time, I wondered why. Well, back then, you could buy 10 acres for just Rs 10 lakh. He clearly had incredible foresight.
TNIE team: Kiran Prakash, Rajesh Abraham, Rajesh Ravi,Anu Kuruvilla
Albin Mathew (photos) Harikrishna B (video)