Cleaning Up A Dirty Business

Cleaning Up A Dirty Business

Posted Dec 14, 2018

Talking Denim with Sanjeev Bahl, Founder + CEO of Saitex

Denim can be a real dirty business. But thanks to people like Sanjeev Bahl, it doesn’t have to be. As the founder and CEO of Saitex, based in Vietnam, Sanjeev has become an industry leader in sustainable denim. He believes that it’s about much more than manufacturing responsibly — it’s about innovating to make the world a smarter, safer, and cleaner place. Saitex holds firm to the values of multiculturalism, ethical treatment of workers, and sustainability — an ethos built on the idea that a company can achieve high performance and growth while operating with respect for people and community, using processes that are gentle to the earth. Case in point: Sanjeev created a game-changing LEED-certified facility that recycles 98 percent of the water it uses in its production process. We are more than just great fans of Sanjeev and Saitex; they are Outerknown’s primary denim supplier.

We heard you built, then rebuilt your factory. Is that true?

We have 12 factories. The first was built in 2010, and the second came in 2013. We were pushing the limits of environmental performance, and the old model was not suitable for the energy modelling, and water modelling we needed. The rebuild really came out of necessity.

Why did you choose to base your factory in Vietnam?

Karma (laughs). Version 1.0 of Saitex, pre-Vietnam, was sourcing. We were based out of Hong Kong sourcing jeans, mostly for men. And in those days, around 2000–2001, imports to the US were governed by a quota system, and you had to find countries that were non-quota. We moved pretty rapidly as the business scaled up, and in the search for another country, we ended up in Vietnam. Once the quotas went away in 2009, and we walked away from the global sourcing model, I’d grown to like Vietnam a lot. There’s a lot of discipline in the workforce, and they respect women; in other countries I saw modern day slavery. Vietnam was really refreshing because people weren’t being shouted down to and there was a lot of equality. They’re very skillful and hard working here. All told, it’s a combination of gender equality and discipline. When I came to Vietnam at that point in time, people asked me what I was doing there. It just felt good; I took a leap of faith and here we are.

Why would you make things harder for yourself, especially in an industry that prizes speed and price over quality and sustainability?

There are two schools of thought: The GDP School and the GPI School. With the Gross Domestic Product school, it’s all about how much an economy can produce in a year, and value is generated based on that production. If you look at pollution, it would be a byproduct of a GDP economy; pollution is seen as a production cost, and cleaning up the pollution would be another value-generator in that economy.

With a Genuine Progress Indicator outlook, it’s kind of the analog, and pollution is treated as a form of resource depletion. At Saitex, we’re asking what the social and environmental impact and profits are, and it’s not all about the profits. For me, a business should be a call for good; especially in an environment where people are dependent on us, we have to be extremely responsible. It’s all about long-term value creation, it’s not about getting the low-hanging fruit. We’re more focused on building long-term value.

Let’s take water for instance, a resource that Outerknown and Saitex are both really passionate about. We have a water recycling system today, where we recycle 98% of our water. It cost us two million dollars to install these filters. With two million dollars, most factories would buy 2,000 sewing machines (a sewing machine costs $1,000), but we didn’t choose to build capacity that did not have value. We spent two million dollars to convert, reuse, and upcycle our water. . . . Brands that invest in more sewing machines are missing the tangibles. Governments charge you to clean the water; it’s not like it’s free to discharge dirty water into the environment, it costs $700,000 a year for water cleanup and discharge. With our filtration system, we’re saving $350,000 a year on an investment of two million dollars. In six years, our investment has paid off and we’re far more competitive than the factory that bought 2,000 more sewing machines. We put money on long-term value creation, we broke even, and now we’re better off and far more competitive.

From an environmental and social perspective, with the water we save, we bottle and ship it to places that need it, where there’s drought. Sludge is a byproduct of washing denim, and because we don’t use toxic chemicals in our washes, we take our sludge and turn it into non-hazardous bricks to build homes.

How does Saitex enrich the lives of workers and the community?

We are nothing without our workforce — it’s those people who turn up to work every single day religiously, brave the weather, brave the difficulties that they have in their life, to allow all of us to lead a good life. We’ve always respected them very deeply, and at a fundamental level, there has to be equal respect. . . . People say we pay 1.5x what the industry standard is, but that doesn’t mean we’re less productive. Saitex has an environment of transparency and equal opportunity that allows our associates to have a fair wage. It’s very heartening to be certified as a Fair Trade partner, and if our clients choose to take part in the fair wage program, 1% goes directly to the locals. It means a lot to workers that they’re being recognized by the client, not just the management. It’s not all about the money either, we have an unwritten law at Saitex that extends to our workforce and their children. . . . When it comes to health, if someone has a serious problem, then we do whatever it takes, be it financial or empathetic support, to go out and participate in the success of their recovery. Our biggest joy is to participate in the lives of eight hundred children, orphans in our community. One orphanage we’re particularly close with is seven minutes away from our factory. We started a program where we convert our rejected jeans into shoes for children. We also started a non-profit that raised $250K for an orphanage, where 150 children live with dignity. Once children in the orphanage turn eighteen, unconditionally, no matter what their challenges may be, they’re given a job at Saitex with equal pay and equal respect.

What’s the future of sustainable denim production?

I would hope for a few things. I hope that one day there is serious legislation that would stop greenwashing, stop people from making claims about how equal and green they are, and misleading consumers. I want to see more companies like Outerknown to emerge who are spiritually and ethically aligned to a cause, and share the belief that each generation needs to leave the planet a better place than we found it. I’d also like to see a day where the consumer recognizes the value of sustainable clothing. Organic food became important to people because they realized that it had a direct impact on their health, and while clothing doesn’t have a direct impact on health, it does have an impact on our spiritual, ethical, and moral health. I’m not an activist, but I’d like to see more organizations like Greenpeace coming out and calling out the pretenders and ensuring that the world becomes a level playing field. Finally, I want financial institutions and governments to incentivize responsible companies, and go beyond carbon credits and tax breaks that will encourage responsible governance of business. It’s about the broader social, environmental, and financial impact of production at-large. Denim is just one thing, out of so many, that requires our attention.

Photo Credit: Mike Schneier (@mschni)

Posted Dec 14, 2018