Interview with Sanal Kumar, Chairman and MD, Classic Fashion Apparel Industry, Jordan
I N T E R V I E W
Classic Fashion Apparel Industry has a 24% share of the garments market in Jordan. Some studies suggest that the industry could grow to $2 billion in the coming years, in spite of a recent slowdown. How do you see it progressing in Jordan?
With the government’s help, it could be a $3 to $5 billion industry. The stability of the country is remarkable, so is the quality of the workforce. We benefit from duty free deals in Canada, the US and Europe, so I don’t see why the clothing industry would not be able to grow and become even a
$10 billion industry over the next decade. However, the necessary catalysts to achieve such numbers are not yet present.
If this company continues to grow, I believe we should reach the $1 billion mark between 2022-2024. Together with the different players involved in the industry, it should take the sector to more than $4 billion growth over five years, which will, as a consequence, create more jobs for Jordanians.
But the government needs to understand one point: pushing the investors to start satellite units in the villages of Jordan and to create jobs for Jordanians falls within the realm of Corporate Social Responsibility. The concept should be to incorporate CSR as a business model, to ensure that the factories and villages are productive and profitable, thus making it a success story for all investors.
We benefit from duty free deals in Canada, the US and Europe, so I don’t see why the clothing industry would not be able to grow and become even a $10 billion industry over the next decade.
This would be possible with the compromise of a 50% migrant and 50% Jordanian workforce. Jordan isn’t a big country; creating 100 factories pretty much ensures that every single village has one. And the beauty of this is that you ensure employment across the kingdom.
Do you think there should be more players in order reach the total capacity of this sector?
In terms of apparel, the US alone is a $120 billion industry and Europe is a $80 billion industry. In a country like Jordan with a garment industry of $10 billion, the export possibilities are huge. Take Vietnam as an example: they started the clothing industry in the early 90s, and today they export $28 billion, without any trade benefits in the US or Canada. They were clever and drove the country towards industry.
It seems that Jordan is creating a reputation for quality in specific niche markets within the textile and clothing industries. Tell us how this company developed into what it is today?
I trained as a chartered accountant and went into the garment industry in Dubai as a finance manager in 1991, slowly moving into marketing and operations. Then I began putting together factories for others, and in the year 2000, I came to Jordan to set up a factory. It wasn’t until 2003 that I set up my own company — and this is how Classic Fashion was born. I started with 300 people and an investment of $500,000, which were my savings after 15 years working in the Middle East.
We are a big family, and this is why the company has been successful. Most of my managers joined with little or no experience, and today they are masters at what they do. We have 15 factories, with the capacity to add more in short timespans.
If 23,000 families are benefitting thanks to Classic Fashion, I must do everything possible to ensure that they keep their jobs — and if I can help more people, I will.
Our business model is pretty simple: we don’t just sell clothes, we sell capacity and our services. From 2003 to 2013 I had three main customers. The fourth client, Under Armour, was the game changer. It was the one to truly make the numbers grow, and we are expecting Nike to become a customer this year. Whenever we set up an agreement with a new customer we want to know how they work, and vice versa. We don’t go in with a big pitch, we start small and they work with us for one or two seasons. Following that we discuss units, from which we create the factories and recruit the workforce. Everyone in the production line of the factory is connected, to ensure a system of supervision and the final quality of the product.
What do you think should be done to increase the industrialisation of the country?
I have led initiatives in this industry to keep it sustainable and continue to promote the creation of jobs. If 23,000 families are benefitting thanks to Classic Fashion, I must do everything possible to ensure that they keep their jobs — and if I can help more people, I will. The government should help the private sector to develop. The funds are there, but the banks are very conservative.
If I wanted to build another 20 factories, it would have a cost of approximately
JD 60 million ($84.6 million), which I don’t have. But, if a PPP came in and funds were allocated to create jobs and factories, it would advance the process of industrialisation.
We would love for some brainstorming to take place at an industry level. Big numbers cannot be delivered after a couple of conversations; we need sustained dialogue followed by action. The economy can be sustainable and growth-oriented only if jobs are created and holistic industrialisation is taking place. Jordan has an amazing literacy rate, but unemployment figures are also on the rise. Employment is a big challenge, especially for a population with a highly educated youth
