KUALA LUMPUR: Malaysia is set to reap 10 per cent expansion in condom exports to RM475 million this year as it continues to ride on the strength of the US dollar and rising global demand for the contraceptive.
Malaysia currently supplies 20 per cent of the world’s condoms demand of 30 billion pieces a year.
“Condom exports are rising because people are beginning to be more vigilant about birth control,” said Karex chief executive officer Goh Miah Kiat.
The strengthening of the US dollar against the ringgit could fuel double-digit growth from last year’s condom shipment of RM431 million.
Last year, Karex’s profits expanded on the strength of the US dollar and muted latex prices.
The condom maker quotes its clients in US dollars and the strengthening of greenback against the ringgit helps fatten its profits. Much of the company’s costs — mainly locally-sourced rubber and packaging materials — are priced in ringgit.
Goh said Malaysia’s condom exporters were aiming for a 10 per cent growth this year.
Karex is currently producing five billion pieces annually — more than any other single manufacturer — and is the world’s biggest condom maker by volume.
It has factories in Johor and Selangor. In Thailand, its Hat Yai facilities are being upgraded with cutting-edge technology.
Karex’s production lines hardly have standstill days as they are being designed to roll out more rubber at a much faster rate.
Goh said global market for condoms was projected to reach 44 billion pieces by 2020, driven by increasing usage of condoms for family planning and protection against sexually-transmitted diseases.
Four months ago, the United States Center for Disease Control and Prevention reminded travellers to use condoms amid an outbreak of the mosquito-borne Zika virus that has spread to almost 60 countries.
Zika is transmitted by Aedes mosquito, which also causes dengue fever.
Unlike many other mosquito-borne diseases, the Zika virus presents a grave public health threat because it is also transmitted through sexual contact.
The current spread of Zika virus in South America is seeing heightened demand for condoms as governments there are advising women to avoid pregnancy. Zika virus infection during pregnancy causes severe fetal brain defects.
Raising public awareness to prevent Zika virus from spreading is critical, in addition to making condoms available to those in need.
Early this year, the World Health Organisation (WHO) declared the Zika epidemic to be a global emergency. This week, the global health authority said it “still does not see an overall decline in the outbreak”.
It looks like this disease outbreak could be a boon for Karex.
“We’re able to meet heightened demand for condoms. Our annual installed capacity is set to rise to six billion pieces by the first quarter of next year,” said Goh.
Apart from capacity expansion, Karex is also venturing up the value chain of condom production.
Last month, it told Bursa Malaysia that it was buying United Kingdom’s largest independent condom manufacturer, Pasante Healthcare Ltd, for £6 million (RM35.28 million).
Pasante is one of the UK’s leading sexual wellness and healthcare product players, offering condoms, lubricants, and human immunodeficiency virus (HIV) and pregnancy test kits.
Goh said the purchase of Pasante was expected to complement Karex’s family of brands such as “Carex”, “INNO”, ONE®, “ESP” and TheyFit®.
Earlier this year, Karex bought European condom brand TheyFit for US$1.3 million (RM5.29 million). TheyFit’s customised condoms come in 95 different sizes, 14 different lengths and 12 different nominal widths.
“Men will definitely benefit from such personalised options. We believe that condom fit is the next frontier when it comes to increasing use and acceptability,” said Goh.
“Shoes and pants come in different sizes, so why not condoms? Now, with a lot more sizes available, it’s easier for men to find the perfect fit,” he said.
“We are optimistic of introducing TheyFit online. It’s not possible to find all 95 sizes in one store. Online sales is gaining momentum and the profit margin is good,” he said, adding that TheyFit condoms would soon be rebranded and relaunched as myONE Perfect Fit® condoms.
Purchases could be made at onecondoms.com and the condoms delivered discreetly in plain packaging.
Since condoms are classified as Class II medical devices, they must conform to the American Society for Testing and Materials’ standards and approvals by the US Food and Drug Administration.
Goh said surveys showed that myONE offered sizes that perfectly fit 80 per cent of condom purchasers. Another 10 per cent found a much improved fit over regular condoms.
Two years ago, Karex bought a 55 per cent stake in Boston-based Global Protection Corp (GPC) for US$6.6 million. Since then, GPC’s ONE condoms has doubled Karex’ revenue from its own brand labels from four per cent to eight per cent.
“ONE condoms will continue to give us better margins and visibility,” said Goh, adding that Karex had the exclusive rights to distribute the product in Southeast Asia, China, Hong Kong, Taiwan, North Africa, the Middle East, Australia, New Zealand, Japan and South Korea.
When it comes to brand recognition, leading labels like Durex, marketed by Britain’s Reckitt Benckiser Group, Trojan, owned by the US firm Church & Dwight, and Lifestyles by Australian giant Ansell Ltd, make up 25 per cent of the world’s condom market.
In the US, ONE condoms is currently the fourth most popular brand after Trojan, Durex and Lifestyles. Currently, about 40 million pieces of ONE condoms are sold annually there.
“With more awareness campaigns on reproductive health, safe sex and family planning, we’re seeing rising condom demand,” said Goh.
Established in 1988, Karex emerges as the No. 1 supplier of condoms globally because of its focus in the last decade to sell in big volumes to government health and family planning agencies, non-governmental organisations and multilateral bodies like the United Nations.