March 23, 2008

Six million lush terrycloth towels tumble out of Arad Textiles’ dryers every month, ready to be folded and shipped all over the world.The year was 1940, and Paul Heiman, a refugee from Nazi Germany, found himself broke and unemployed in Cincinnati, Ohio. Unable to find a job, Heiman implemented a traditionally Jewish solution: he began buying things from one person and selling them to another.

Linens were Heiman’s product of choice – buying and selling textiles from the family’s small apartment. He began to specialize, focusing on supplying hospitals with all the textiles they needed – sheets, pillowcases, towels, blankets and curtains. During his lifetime, Paul Heiman remained strictly a wholesaler. He bought and sold, not manufacturing anything himself.

The change began in 1973, when Paul’s grandson, Gary Heiman, just 21 at the time, left the US to come to Israel to serve as a volunteer during the Yom Kippur War. The Heiman family had always been ardent Zionists, but Gary’s experience during the war caused him to make two critical decisions: first, to stay in Israel, and second, to build an industry here, creating jobs. He convinced his father that opening a factory in Israel would be both a sound business venture and a benefit to embattled Israel.

“It was just a gut feeling, a seat-of-the-pants decision,” says Shuki Kuchinsky, CEO of Arad Textile Industries, the subsidiary of Heiman’s company that resulted from Gary’s decision. “At first, they weren’t sure what they would manufacture here. ‘How about towels?’ Gary suggested. That’s where it started,” Kuchinsky recalls.

It took almost four years to implement the decision. “Gary was just a kid, born the same year I was, 1951. He had to go to Switzerland to be trained in textile manufacturing at the company where all the machinery was being made. Then they had to find a place to locate.

Avraham Shochat – who later became finance minister – was mayor of Arad at the time, and he convinced Heiman that Arad was ideal. Arad was a dusty town in the middle of the Negev, with only about 9,000 residents. It was a development town, so some government financing was available. They picked a spot for the factory out in the middle of nowhere, and built an 18,000-square-foot building that stood all by itself. When it opened in 1976, there were 30 employees, working in shifts of a dozen at a time.”

Success was neither automatic nor immediate, Kuchinsky says. “Gary had a lot of problems – he was maybe too honest. Israelis were cheating him left and right. After five years, they came to the point that they either had to close, or find someone else to manage it. Dov Lautman had founded Delta Textiles in 1975, and he came to Gary with a ‘let’s make a deal’ proposal. He told Gary he wanted to buy half the company for just $1, but then he’d also invest in new equipment, expand the factory and also bring in new management. The two would own the company 50-50.

“Gary agreed, and it turned out to be a very fruitful cooperation. They considered listing it on the Tel Aviv Stock Exchange in 1993, but decided against it. Instead, Gary bought all the shares from his brothers and Delta Textile, and now owns it himself.”

Kuchinsky came to Arad Textiles in 1981, along with Lautman’s people. “I was a young engineer, and we started to work. It took two to three years before we started to see light at the end of the tunnel.

“Even though our main objective was to sell towels to the US, for the first five years we didn’t ship even a single towel. Gary’s father was passionate about quality, and until he was convinced that we could consistently supply a high quality product, he wasn’t prepared to deal with us. I remember trying to convince him that we knew what we were doing. I took him to the factory – we’d just completed our second expansion, so part of the factory floor was empty, without even a loom. ‘But what will we fill this building with?’ he asked.

“‘Where will the orders come from?’ I convinced him that there were plenty of markets in the US and Europe. We met every six months, and finally he began to trust us. By 1990, we were shipping towels to the US, in fact, between 1987 and 2000, we multiplied our production every two or three years.”

In 1988, at his father’s request, Gary Heiman returned to Cincinnati and took over as CEO of the parent company, Standard Textiles. Still a privately held company today, Standard ranks as the world’s largest supplier of industrial textiles to the European market. Its Israeli subsidiary, Arad Textiles, is one of the largest towel manufacturers in the world.

Step out of your shower in Las Vegas or Paris, and it’s highly likely the towel you dry yourself with was manufactured in Arad.

It’s not just towels that come from Arad, either, but also sheets, blankets, bath mats, robes and other specialized items for hotels and hospitals worldwide.

In Israel, Arad Towels supplies the IDF, the Israel Prisons Service, the Health Ministry and 70 percent of the country’s quality hotels.

Walking through the factory, one sees thick, lush terrycloth towels – six million a month – tumbling out of the industrial dryers, ready to be folded and shipped to companies all over the world.

Towels begin as cotton thread wound on man-sized spools, are woven to order, bleached, dyed, washed in Tide detergent – another canny corporate arrangement – and are then folded, packed in cartons, loaded onto trucks and shipped out. On any given day, towels bearing the corporate insignia of hundreds of customers – Crowne Plaza, the United States Department of Veteran Affairs, the University of Kansas Hospital, Emory Healthcare, St. Luke’s Roosevelt Hospital Center – roll off the line. Their biggest order was for several million towels, Kuchinsky says.

The smallest? “Fifty bath mats.”

Running a major manufacturing industry in Israel is not for the faint of heart. Israeli industries can’t afford to be “just as good” as the competition – they have to be better.

One of the company’s earliest innovations was to supply hotels with “room-ready” towels. “Believe it or not, before we came along, the standard way of selling towels to hotels was to sell them raw – not pre-washed or pre-shrunk. Hotels would take delivery of new towels, but then they’d have to send them out to be laundered and shrunk before they could go into guest rooms. We were the first to sell towels ‘room ready,’ which was a big plus. Suppose you’re a hotel at the Dead Sea, with an unexpectedly high guest list. You need towels within 24 hours. You call us, we ship, and when the towels arrive, the hotel staff takes them directly from the packing cartons and put them in guest rooms. Today, room-ready towels are the industry standard, required by all hotels. But we were the first to make that change.”

The Negev region supplies most of the work force, about half of whom are new immigrants from FSU countries and Ethiopia and the other half Jewish Israelis, Arabs, Druse and Bedouin. The company also has three factories in Jordan, employing about 700 people.

The family nature of the business extends all the way up and down the corporate structure. “Until just a couple of years ago, Gary still came back for army reserve duty, serving as a paramedic on helicopters,” Kuchinsky says. “He says when he comes here, he feels at home. He insists on speaking Hebrew. You speak to him in English, he answers in Hebrew.”

Gary’s wife, Kim, is also involved in the company as senior vice president of Decorative Products. In Israel, Kuchinsky’s wife, Noa, has embarked on a new venture entirely. “Two years ago we decided to play in the biggest playground in the world [retail], and Noa, who has a Masters in marketing, is doing the designs. She began designing extra-luxury home products for a chain of retail stores we’re calling, ‘Bed, Bath and Home.’ So far we have six stores in Israel. Exporting? Soon, we hope.”

What’s next for Arad’s biggest industry? “We’re running at 100% capacity, now,” Kuchinsky says. “We’re expanding the factory again. A marketing agreement with a major US retailer is in the works.”

The small business started by a Holocaust survivor in the family apartment has gone big-time. From the first Israeli factory of 18,000 square feet, it’s now outgrown the latest expansion of 550,000 square feet. But still, Gary Heiman’s Standard Textiles and its Israeli subsidiary, Arad Textiles, remain very much family businesses.

Printed by courtesy of The Jerusalem Post.

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