Since it is the world’s largest producer of denim, you might expect global textile company ISKO™ to be staid and conservative in its approach to doing business. However, in the almost four decades since its founding under the Sanko™ umbrella, the company has maintained an unwavering commitment to taking on difficult projects and moving swiftly to tackle new challenges.
“We are a fast adapter,” CEO Fatih Konukoğlu tells The CEO Magazine. “I mean, we never say no to anything. When a customer comes and asks us, ‘Could you do this?’ we avoid using the word ‘no’ as much as possible.”
This attitude has earned it a global reputation for being a company that does what others can’t. “If someone cannot make a product, they’ll usually say, ‘Take it to ISKO. They’ll manage.’ This is well understood in the industry,” he shares. “This gives us a big advantage because it means every new idea comes to us.”
ISKO sells denim products and services to brands and retailers worldwide, has offices in 35 countries and is part of Sanko Tekstil, the textile division of Sanko Group, a family-owned conglomerate founded in 1904 that also has interests in construction, renewable energies and finance. It is perhaps best known for inventing Jeggings™, the popular leggings made to look like skin-tight jeans.
According to Fatih, the company has a wider global reach than any other denim manufacturer, giving it unparalleled insights and feeding the type of creativity that makes market-defining innovations like Jeggings possible.
“I would say we are maybe the only denim company that has worldwide coverage,” he reveals. “We have customers in Japan, the US, Europe – the world of jeans is big. And because of our capacity and product portfolio, we can cover different parts of the world. In jeans fashion, there are different dynamics and there are major centers that drive trends, like Scandinavia and Japan.”
Having customers in so many different regions helps ISKO to build different muscles, meeting the supply chain needs of partners in diverse settings while also staying on top of emerging trends in numerous markets.
“It gives us an overall strength and vision to see all the global changes that are happening in the industry, and allows us to adapt to new things faster,” Fatih explains. “A Japanese customer is very different from a Californian customer or a Scandinavian customer. We can service different cultures, different brands and different levels of brands from high-end to mid-segment to retailers. So we have a wide-ranging portfolio.”
With so much access to insights and data, ISKO makes sure to invest heavily in the people who can derive value from information. “The people execute these processes, and our team is very creative,” he says, adding that having a creative business mentality drives entrepreneurship and helps makes the company fast and agile.
Sanko’s business activities are driven by a commitment to protecting the environment and acting responsibly, according to Fatih. “It is in our company DNA, being respectful to our surroundings,” he shares. “In places where we have plants, we tend to be very careful with the town or city that we are in. We share things as a group, and we tend to be together with the town or city wherever we have facilities or factories.
“When we go to these places and ask how Sanko is doing, we want to hear that it is a good company. That is the first thing that we want to create and if we cannot create it, we don’t feel good. That describes Sanko as a group, because whatever we do or whatever we build or create or produce, we want to do that without harming the environment or people; it should be value creation rather than just production.”
With decades of experience in the industry that included studying textiles at the University of Bolton in the UK, Fatih has witnessed a dramatic shift in the way fabrics and garments are made. “There is a new era in textiles,” he confirms. “Sustainability has become more and more of an issue.”
He notes the difference between production practices now and those when he first started. “The way that we used to work, the way that we learned to do textiles at schools and universities; I think that’s changing, and it’s changing dramatically,” he says. “Using cotton several times, circularity, recycling, changing production parameters, waterless dyeing – this was not taught at school. We learned how to wash, how to clean, but we were not strict with water usage.”
While the task ahead is mammoth, Fatih remains optimistic about the business world’s ability to tackle it, thanks largely to the ingenuity and creativity he has seen at ISKO. “As humans, when you put the problem in front of us, we find a way to solve it,” he points out. “I think there has been a big impact in many other industries besides textiles. We are now thinking totally differently.”
ISKO’s commitment to sustainability is about more than recycling, though it does plenty of that. The company takes a holistic approach to the problem, even going as far as to reinvent materials to make them more sustainable. The goal is to make fabrics that last longer and use fewer resources, while performing exceptionally.
It calls this approach Responsible Innovation, which is epitomized by fabrics produced under the banner of R-TWO™, a wide-ranging overhaul of the manufacturing process. R-TWO fabrics use recycled materials for more than 50 per cent of the product, while reducing water usage and carbon footprints.
But for Fatih, such innovations are only the beginning. “The next three to five years will be interesting and challenging. Some of the books will be rewritten because it will not be as we learned. We will see many, many new ways of processing waste and new machinery,” he predicts, touching on the topic of circularity. “These will need to change because we need to adapt for the coming era, and sustainability will be one of the major drivers of our business.”
To meet this complex challenge, the company created a large-scale circular textile hub that combines the latest and most sustainable recycling techniques within the ISKO ecosystem. The hub is a gateway for any brand facing the challenge of recycling its waste and giving it a new life in fashion.
As part of its hub strategy, ISKO recently announced it entered into a licensing agreement with the Hong Kong Research Institute of Textiles and Apparel for the Green Machine technology to separate cotton and polyester blended fabrics.
Still on trend
A key business task will be to balance sustainability against the need to provide end consumers with up-to-date trends and deliver customer satisfaction. One thing working in ISKO’s favor on this point is that consumers are starting to value a genuine commitment to sustainability when they buy clothes. “We need to keep the fashion side of it because we all want to enjoy the products we buy,” Fatih says.
Innovations like R-TWO are possible thanks to the company’s commitment to scientific research into fabrics.
And ISKO doesn’t just rely on external organizations to access cutting-edge innovations; it has its own science center in its factory, two garment development labs in Germany and the UK, and one washing library called ISKOTECA in the coastal Italian town of San Benedetto del Tronto.
“We started this about 15 years ago, when we were researching ways of making new-generation products,” Fatih recalls. “Then later on, as a textile company, we also focused on how to regenerate, recycle and reproduce these products because we saw that we were entering this era. So we built a science center, which is not very common for a textile company. We have scientists in this center working full-time, and their job is just to research new materials and ways of processing.”
Another product born out of this work is ISKO RHEACT™, which is used to make one-of-a-kind compression sleeves and garments for the arms and legs to improve blood circulation. “Whoever wears them falls in love with them,” he smiles.
Fatih explains the center has scientists from a range of disciplines including chemistry, physics and biology, as well as experts on electronics and the technical details of manufacturing. “We are building a good community around circularity with this team. These are all PhD-level team members,” he says.
The reason ISKO engages such a wide array of experts is that the exact nature of the next industry-leading innovation is, naturally, not yet clear, and Fatih wants to ensure the company has expertise in whatever field turns out to be at the forefront of future norms.
“The next era is going to come from a different angle that we don’t know about yet,” he asserts. “It could be from biology or from the chemistry side, because there’s different approaches to recycling, and we need to understand the research and turn that to use in the industry.”
Having accumulated so much expertise about the circular economy in textiles, ISKO’s team is confident that sustainable innovations can be executed much more quickly than they are now, which will pave the way for widespread adoption.
“We need to be in the game because there is research happening in the lab at small scale, but someone needs to turn that into reality, into mass production. We’re a great candidate to do that and we want to do that faster because we see that it’s possible,” Fatih says. “We are one of the biggest denim manufacturers. If we can turn the majority of our production towards more sustainable products and respect the environment, if we can set and meet our targets, then that will have a major impact.“
Like many other companies, ISKO has set itself environmental targets for 2030, but Fatih thinks that is too long to wait, and he is eager to meet these goals ahead of schedule. “We don’t want to wait. If we can, we would like to execute it as soon as possible.”
A key focus of the research that went into creating R-TWO was on developing recycled materials that are qualitative and long-lasting, Fatih says. There’s little use in cutting waste and reducing the use of other resources in the production process if the finished product isn’t high-quality and needs to be thrown out and replaced within a year or two.
“We have the option to make jeans more sustainable than they are today and use them for many, many years,” he enthuses. “We can make them sustainable and stronger, and the life cycle of the product also should be longer, so you can enjoy your jeans for the long-term.
“Our focus is first to recycle, but when you recycle, you sometimes lose the quality of the product. So we wanted to develop ways to keep that quality but still create a better product with the recycled material. And that’s what R-TWO does. I would say it’s like a product that is engineered for nature.”
In the coming years, ISKO will start to produce denim that meets these standards while using recycled material for up to 80 per cent of the product. The remaining 20 per cent will come from sustainable sources, meaning the fabric will not require any virgin cotton. With the arrival of these sustainably produced and long-lasting products, Fatih hopes more consumers will begin to view their jeans as products that will have more lives, even after they are done wearing them.
“We just talk about second-hand today, but what about third-hand?” he asks. “If the product can last longer, it should have multiple lives for multiple people. This is the challenge we are going after, and the solutions are already there for us.”
Wanting customers to wear hand-me-downs rather than head to the store to find something new is an unusual stance in an industry where many have become dependent on high levels of consumption and demand to sustain their business models. However, Fatih does not see a contradiction between long-life products and a healthy business model. In his view, ISKO will continue to innovate and consumers will continue to want a change in their wardrobes even as the industry adapts to using less.
“We don’t want to get stuck with our jeans for 15 years. You may like some of your jeans and you can keep them, but generally, we psychologically want to change sometimes. So let other people have the jeans you don’t want,” he says.
ISKO’s research center was also put to good use when the COVID-19 pandemic hit. The center’s expertise in textiles sciences meant it was perfectly placed to develop face masks when there were global shortages as the virus first began to spread. “We were just thinking, ‘What can we do?’” Fatih remembers. “We threw this to the center and within a few days, our colleagues came up with some solutions, and we executed them fast and they worked.”
The center was able to quickly create masks and then lab test their filtration properties before getting them accredited, enabling ISKO to distribute millions of high-quality and even medical-grade-certified face coverings free of charge at a time when they were in desperate demand.
“If we do something, we do it properly,” Fatih insists. “There were a lot of masks being made in those days. Of course, all masks help to an extent, but I would say our mask was one of the best ones because we tested it and we knew how well it was working. That is something that we are very careful about: if we promise something, it should be there.”
The success of the initiative provided much-needed encouragement to the team during the pandemic. “It was a difficult time for all of us at ISKO and Sanko. We are a big family. We tend to feel the same with all of our employees, and we felt that we needed to protect the whole family somehow.”
Fatih regards other companies working in the fashion textiles space as colleagues, rather than competition. An industry as large and complex as this one, and one that has so many multifaceted challenges, requires a special level of collaboration. “We should not be competing at these levels. We should be working together to change the industry because the industry is known as a dirty one,” he stresses.
Textile dyeing has brought heavy pollution on garment manufacturing hubs, turning rivers black as companies dump waste. While efforts are underway to clean up these practices, the problem persists and the industry’s reputation has yet to recover. Fatih says ISKO is striving to set an example for everyone in the industry with its own manufacturing processes.
“You should come and see how we produce this product,” he says. “We really respect the environment. We are the pioneers and we want to lead the industry. We all have to become better.”
Understandably, it is well-known brands that face the most public pressure to ensure supply chains go green. But Fatih believes there needs to be more of a focus on the manufacturers that supply the brands, and manufacturers need to play a more supportive role to help brands achieve their sustainability targets.
“We try to keep our customers strong in the supply chain. We should support them as best as possible so they will turn to sustainable products faster,” he says. “Because manufacturing needs to solve this rather than brands. I think there is a lot of pressure on brands but we should also put some pressure on manufacturing.”
In this vein, Fatih wants ISKO to improve its communication with brands about new and upcoming innovations in green technology and processes. “As a team, as people, we have already matured on many levels,” he reveals. “But I would say we can improve in terms of explaining this circularity because brands also need to catch up. We are often a bit earlier than them because we produce the product, and then the brand selects those products from us. So we are a little bit ahead of today’s market.
“It is also not easy for them to evolve into this process because they have their own structures and different ways of making promises to the environment. It is not always easy to align themselves to a new product. Some of them are focused on organic cotton; some of them are focusing on different ways of using materials. They are all trying to do something nice for the environment. But R-TWO is really the cream of the crop. There is no other product that has a lower carbon footprint – it is a genius product.”
With so many organizations keen to show they have sustainable credentials, Fatih believes it is vital to stay alert to greenwashing and ensure that ISKO doesn’t become guilty of this itself by insisting on accountability at every level.
“Traceability is important,” he says. “We need to be sure that everything we promised is there because we cannot make a mistake. When we say this is recycled material, we should not end up having to say, ‘Oh, my supplier did not send me the recycled material,’ which is unfortunately happening in some countries. What they claim to be in the product may not be.”
Fatih’s philosophy is that when a company has a long-term outlook, the only worthwhile strategy is to be as open and accountable as possible. “One of my father’s mottos was: ‘The trick of the trade is honesty.’ If you want to be successful in the trade, you have to be honest for the long-term. In the short-term, with a trick, you can maybe get a better outcome but it will not sustain you,” he explains.
Another trick to being sustainable, both environmentally and as a business, is to maintain competitive pricing, Fatih adds. After all, mass adoption of greener products will require making sure they are accessible. “We want to keep price levels as lean as possible. We are trying to find ways of being sustainable while not increasing prices, by which I mean that the products should be sustainable in terms of price, the manufacturing process and quality,” he says.
“We want these products to be a service to humanity, but if the consumer cannot afford them, what is the meaning of sustainability? If they cannot buy it, it will not have an impact.”