Arad Textiles supplies towels to 60,000 of the 150,000 hotel rooms in Las Vegas”We have no R&D department at our Arad plant, because almost all the company’s employees are involved in R&D. What I am selling this year won’t be popular next year, so we have to come up with something new every year, to give the customer the feeling that he is working with an innovative company.”

The CEO who made the above statement doesn’t run a startup or even a leading high-tech firm. He is Shuki Kutchinsky, the boss at Arad Textile Industries, which owns the towel factory in Arad and Standard Textile Israel in Migdal Ha’emek, which makes products that breathe and absorb for use in operating rooms.

Kutchinsky says that he himself spends 15 percent of his time working on new products.

“We meet with customers twice a year and make sure to tempt them with something new,” says Kutchinsky, “even if it is still in the development stage. Customers do not like to feel left behind.”

Arad Towels’ latest development is the Centium towel, launched a few months ago in the United States and designed for the luxury hotel market. The special design gives the towels a feeling of thickness and volume even though the fiber density is not much greater than in standard towels.

The company’s previous creation was a towel called Room Ready. “Towels that come from Pakistan do not absorb until after two or three launderings,” Kutchinsky says. “Our towels arrive ready to use, with no need for laundering before they are put in rooms.”

High product quality, reliability and innovativeness have helped Arad Towels compete successfully with low-cost manufacturers from the Far East. Automation has replaced cheap labor, and while Israeli towels are more expensive than those from China and Pakistan, the price differential is not very great. Many Western clients are willing to pay the difference to avoid compromising on quality.

Arad Towels makes sheets, towels and blankets, mainly for institutional clients such as hotels, hospitals and laundry services that supply hotels.

“We supply towels to 60,000 of the 150,000 hotel rooms in Las Vegas” says Kutchinsky. “We have also signed an agreement with a French hotel chain to be its exclusive supplier for the next three years, after winning a 5-million euro tender.”

Other Arad Towels clients include the Hilton, Sheraton and Four Seasons hotel chains as well as most of the big laundry services companies in Europe that rent towels to hotels and hospitals. In Israel, Arad Towels supplies institutional bodies such as the Israel Defense Forces, the Health Ministry, the Prison Services and 70 percent of the quality hotels.

Gary Heiman, an American Jew, owns Arad Textiles and Standard Textile after buying out first his father’s and brother’s shares and then those of Dov Lautman, the owner of Delta Textile. Arad Towels was floated on the Tel Aviv Stock Exchange in 1993 but Heiman decided to buy all the shares and delist the company.

The plant was built in Arad in 1975, mainly for Zionist reasons, as a subsidiary of the American company Standard Textile, which is owned by the Heiman family. The American company now manufactures in five locations in the U.S., three in Europe, two in Israel and at one plant in China, which opened last month. The Israeli plants register $650 million in sales annually and are the most profitable.

Arad Towels has 500 workers, 60 percent of whom are immigrants from the former Soviet Union. The employees lead development projects at the company. Standard’s plant in Migdal Ha’emek has 100 workers, a few dozen of whom still sit at sewing machines or stand beside cutting equipment. The labor intensive production lines have been transferred to Jordan.

The Migdal Ha’emek plant was built in 1994 by Heiman’s younger brother, Mark, and specializes in synthetic protective medical clothing for surgeons and operating room staff. Like Arad Towels, the plant exports 95 percent of its product, and its main clients are in Europe where new regulations forbid the use of cotton in operating rooms, for hygiene reasons. The patented multi-use fabric, which breathes and is water resistant, was developed by Dupont and Standard after similar regulations went into effect in the U.S.

Kutchinsky notes that such regulations exist in Israel, too, but that hospitals are in no hurry to implement them. Still, there are initial signs of cooperation with Israeli hospitals

The plant makes everything a surgeon needs including triple-layered fabric whose upper layer is absorbent and whose bottom layer is sealed, and absorbent sheets that are used at the site of the operation.

(Originally appeared in Ha’aretz – Reprinted with permission)