7 Things that I Learnt about the World Largest Condom Manufacturer – Karex Berhad

Posted by Teng Hau Lee on 12:00AM, 24 March, 2015

Last Saturday will definitely be one of the highlight of 2015. One of our dreams in Financial Youth Intelligence is always to bring top management of a public listed company to meet the future investors – the youths and do what Warren Buffet do before he invest in a company.


Before Warren Buffet invests in a company, he will meet the top management of the company and have them to share their vision, strategy and plans for the company. Warren Buffet can do that, because when he invests, he doesn’t invest in 1 share or 100 shares of that company. In fact, when he invests, he will acquire the entire company so that he can have complete control of that company.


While youths can't do that, we are making this happen for them. Last weekend, through our project with Bursa Malaysia, we managed to bring the CEO of Karex, the largest condoms producer in the world to meet all these “future investors” in University of Malaya and share with them insights of their plans, strategies and vision for the company.


Image: 150 youths listening to CEO of Karex


It was a very eye-opening session; we had the CEO of Karex, Mr.Goh Miah Kiat sharing his vision and future plans for the company and followed by a Q&A session where our participants get to ask him questions.

And here are the 7 key lessons I took away from this session:

  1. The condom industry is huge and with massive potential to grow due to the increasing demand in usage rate. In 2012, the global demand of condoms is 22.8 billion pieces and this number is expected to grow to a number of 38.2 billion by 2018 based on the growth rate of 9% CAGR. The condoms industry is also expected to hit a market value of 5.8 billion by 2018. Just to give you a perspective, Karex, being the largest condoms producer of the world, is only producing at a capacity of 4 billion pieces as of 2014. Hence, there are ample potential for them to grow in the future.

  2. Karex is the largest world largest condoms manufacturer. Many have known Durex as the most popular brand among the condoms industry but not many people have known about Karex. With production capacity of 4 billion, they are the largest condoms manufacturer in the market and their main competitor, Thai Nippon Rubber Industry Co. Ltd is only half of their size, operating at 2 billion capacities. Karex helps brands like Durex, Lifestyle and Ansell to manufacture their condoms. In fact, more than half of its operations come from all these commercial clientele.

  3. Half of global condoms are purchased by institutional buyers such as government, non-government organization, multilateral and bilateral organizations. Other than manufacturing to some of world famous brand, a large part of  Karex’s clients comes from institutional buyers like United States Agency of International Development (USAID), United Nation Population Fund (UNFPA), Crown Agents, Population Services International (PSI) and Marie Stopes International.

  4. Financially, Karex is sitting at a very comfortable position. One of the comments that the CEO has made is that many company have grown to become the market leader after their IPO. The difference between those companies and Karex is Karex is already number one even before they went public. Hence, that gives them a competitive advantage. Now, given that they are listed, it gives them the necessary resources to expand even further, capturing more market shares by entering new market to secure their market leader position. Just recently, they have raised another Rm158 Millions and the company is now sitting on net cash of around Rm 400 million (if I still remember the number correctly).

  5. Entering the Own Brand Manufacturer (OBM) segment. The CEO of Karex is very keen to enter OBM market which the he views the market as an opportunity for the company to increase their gross profit margin in the coming future and they plan to do it through more merger and acquisition deals. One of the companies that they have just acquired is a US. Based Global Protection Corp, the company that consummated the ONE brand condoms.

  6. Innovation drives growth. During one of the session, he shared with me that lack of innovation is why a lot of company lose out in today’s competitive environment. Innovation has always been the key in Karex’s core business. They have produced different types of condoms such as condoms that glow in the darks and condoms with national flag (during world cup). And innovation is what keeps them to be at the top for so long.

  7. Mission Driven. There is one moment where I got inspired by the CEO, Mr Goh Miah Kiat is he didn’t just view Karex or condoms as a business but he also sees it as a solution to the world for the prevention of AIDS and STI. He said he is not only in the business of condoms but also in the business of saving lives.   

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