Spice trade: Dr Viju Jacob

One cannot talk about Indian cuisine without mentioning spices. Tikka masala, rogan josh, aloo gobi and a multitude of other curries wouldn’t be complete without them.

Black pepper, cardamom, ginger, turmeric and chilli are just a handful of the spices produced in the country – used for their flavour, fragrance and nutraceutical properties.

For centuries, countries around the world have sought these spices; with trade routes developed between Europe, South America and India from as early as the 15th century. Because it was so difficult to get spices in Europe back then, they were once even more valuable than gold.

Today, India remains the world’s biggest producer of spices – accounting for an estimated 70% of global supply. Among the various producers, Synthite Industries towers over the rest of the manufacturers due to its varied offerings.

The company was established by CV Jacob in Kolenchery in 1972. While the inception and the idea behind the starting of Synthite is itself a long story, sufficing to say that the visionary in him noticed the potential of oleoresins – concentrated natural liquid flavouring extracted from raw spices that he had easy access to in Kerala.

Black pepper – an abundant raw material in Kerala – and its extract captured his imagination. Three years after Synthite was established, its first batch of black pepper oleoresin was shipped to the US.

While the initial growth was slow, Synthite has now established its name across the world for its products. These oleoresins are today used in the
food, beverage, fragrance, confectionery, feed and bio-pesticide industries.

With a successful handle on oleoresins, the company then expanded into other food flavouring subsidiaries. It established Herbal Isolates in 1985 to produce essential oils and specialised spices.

A year later, it started the Synthite Fragrance division to create floral concretes and absolutes for perfumes.

“Spices, oils and related products have become a commodity.”

Building the business

Viju joined the business in 1984, and due to his flair for marketing was made responsible for that department. After rising in rank over the years, Viju was eventually appointed Managing Director in 2016 while his father stayed on as Chairman to guide the group.

Viju still hasn’t completely left his marketing roots behind. “One eye is always on marketing because our products find new uses and it is not limited to food applications. New concepts and demands are being thrust by the end consumers or main decision-makers like the regulators. Due to our focus on market trends and being aware of the changing norms, Synthite is able to ride the wave of change that hits our industry.”

With Viju at the helm, Synthite has reached great heights. He highlights that there has been consistent double-digit growth on a CAGR basis.

Due to climate change, while the basic agricultural industry is not showing a steady trend, Synthite has managed to maintain consistent growth due to its focus on the basics of implementing sustainable agricultural practices and partnering closely with its customer base.

The proof of its success can be gauged from the fact that, today, Synthite has six manufacturing facilities in India, operates two facilities in China, has a GMP facility in Brazil, as well as marketing offices in China, the US, Brazil and the Netherlands and operations in more than 85 countries.

Synthite accounts for more than 30% of the global spice, oils and oleoresins business. While the different facilities in India were set up over the years, China was Synthite’s first foray into the overseas market.

It established its first production facility in Xinjiang in 2012 to produce food colours from chillies. Synthite is the only Indian player with a manufacturing base in both India and China – the traditional large-scale producers of this vibrant spice.

In 2018, a new facility was opened in the Shandong province for spice extraction and purification. This latest facility is in a paprika-rich area and has a long-term focus on producing other natural products as well.

Synthite’s core strength is being able to connect with the farming community and offer remunerative employment to the agrarian economy.

To showcase the size and scale of a project, Viju divulges information on a backwards integration project in Marigold where the crop generated direct employment to 14,000 farmers. This benefited more than 250,000 people.

The backwards integration projects are run under the Farmtech division, which educates and assists farmers with a range of issues from seed selection, soil analysis and pest control to scientific farming techniques.

As a result, it allows the company to maintain the top quality of its raw ingredients across the board. Another large Farmtech project is the initiative it runs for sourcing chilli from Ballari, Ongole and Bhadrachalam to suit the importing country’s regulations.

It is important that the company supports farmers because India not only produces a lot of spices but consumes them at a high rate as well. Viju says that almost 94% of the spice produced in India is consumed in India.

Only 6% has been exported as spice powder or whole spices. “There’s space for India to have bigger growth in the spice production area where it supports farmers,” Viju says.

“There’s space for India to make a bigger growth in the spice production Area.”

Synthite has in the past stayed under the radar of the consumers as it focused on the B2B markets and built long-term partnerships with all major food companies.

While the first phase of the partnership was to offer the ‘me too’ products in the natural space, today the company focuses on replacing synthetic ingredients with natural ingredients.

Clean label ingredients are the in thing and Synthite partners with its customers to make specific claims on the end product.

Viju acknowledges that while the competition in yesteryears was from the Indian companies, due to sustained growth today, the competition is more global and Chinese companies tend to be aggressive in the market.

“The bottom line is that China is tending to commoditise the products and the way forward is to work on cutting-edge technology to beat the ‘me too’ products,” Viju says. Creating unique products is one of the factors that he believes makes Synthite stand out from its competitors.

In 2007, the company opened a new plant to develop supercritical fluid extracts. These extracts have been described as the purest form of plant extracts used in fragrance and flavour applications.

They are extracted using carbon dioxide in a supercritical state where, during the process, high-pressure natural carbon dioxide is pumped into the plant matter. The pressurised CO2 separates the pure plant essence from the rest of the plant, leaving a clear extract.

Not only is this a gentler process of extracting aromatic and flavour characteristics of the plant, it is also green technology. It is considered as the most benign (environment friendly) solvent.

According to the company, this technology has “created ripples in the value-added spice extracts industry”. And, as one of the early adopters, Synthite believes this technology “could offer its clients a wide range of botanical extracts of impeccable purity”.

Apart from its products, Viju goes on to mention the immense support the company has from its employees. “We have the best technology with us as well as high-quality human resources,” he says.

“That’s the major factor you need to have, where the employees do a sagacious job of raw material procurement and the sale of products. That’s the key to our business. The relationships that we build with our employees keeps the company going.”

Going green

Viju links the spice market to the stock market as the prices always fluctuate. “There’s no stability in the market,” he says.

“This is a great challenge for us and, because of it, we are going to other processing origins (closer to the raw material source) like Sri Lanka, Vietnam and China to process more competitively.”

If there is one thing Synthite never takes for granted, it is the quality of its products. The company follows strict quality-management practices and has a multi-layered quality control system that begins at the farming stage.

Quality control at Synthite is not restricted to the parameters in the customer specification, it is also aligned to the importing country regulations. The critical factor of success in such activities is the standardisation of the product and ensuring consistency of supplies.

This is possible when a business sustainability plan is in place. In its mission for sustainability, Synthite believes that the guiding principles need to be “customer centric” and, at the same time, “environment friendly”.

It documents some of the activities carried out in this scope under the Rainforest Alliance Certified range of products. With a growing eco-friendly movement around the world, customers have started to develop environmentally conscious eating habits.

Food-buying habits no longer rest on where customers buy their food but on what ingredients are used in the food. To address these needs, Synthite has established a transparent sourcing system, as well as clean processing initiatives.

Colour is a critical component of the eating experience, with the eyes often being the first to judge whether a certain food is appealing and worthy of consumption.

The prevalence of artificial food dyes – used to make food look more enticing – has raised concerns over whether they could cause a food safety risk.

Synthite focuses on offering a range of natural colours under the brand of NECOL – a name aptly coined from ‘natural and effective colours’. NECOL produces natural colour products that are user-friendly in dairy, beverage, confectionery, savoury and other food applications.

Branching out

Synthite doesn’t just deal in the food and beverage industry, it has also diversified into hospitality. The company owns Riviera Suites, an apartment hotel in Thevara, Cochin.

The hotel is built on 1.6 hectares of landscaped gardens beside Vembanadu Lake. It has a wealth of amenities, including a swimming pool, spa, tennis court and fitness centre for guests.

Synthite also owns the Ramada Resort Kochi, a luxury retreat beside the lakes of Kumbalam, in the outskirts of Cochin. It is the ultimate getaway destination, with large suites and lake-facing cottages. The resort also offers a lounge bar, two specialty restaurants, a library bar and a sunken pool bar.

Further, Ramada Resort Kochi won the Emerging Hospitality Brand award at the Kerala State Business Excellence Awards 2012, organised by the Indian Chamber of Commerce and Industry.

On top of its hospitality industry, Synthite has branched out into the energy and realty sectors. It has committed to using clean energy sources with wind generators in Udumalpet, Tamil Nadu.

The electricity created by these generators is linked to the Tamil Nadu State electricity distribution grid. Plus, it uses its own agro-waste to generate steam and electricity.

In terms of realty, Synthite provides luxury apartments and homes in Kerala. The company’s first group of apartments is in the Riviera Retreat, which is in the backwaters of Thevara, Cochin.

In addition, it has Spice Villas, Vanilla Grove and Ginger County residential villas. Synthite’s mission is to reach a turnover of INR3,000 crore (US$430 million).

Viju ultimately has plans to keep growing all of its divisions, with several factors still to be considered: “We still need to have fairness, innovation, performance, commitment, communication and teamwork,” he concludes.

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