The Business Times

No glove, no love

Malaysia's Karex, the world's largest condom maker, has got you covered.

Anita Gabriel
Published Fri, Feb 10, 2017 · 09:50 PM
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LOVE - or lust - sheathed is the many-splendoured thing called a condom.

Does durian flavour tickle your fancy? Or would you like to try a missile-shaped "power shot" condom or one that is "baggy" at the tip for that extra spark? Perhaps a "delay condom" for prolonged sesh with your boo? All else failing, are you in the mood for something that glows in the dark? Malaysia's "King of Condoms", the man helming the world's largest condom maker Karex Bhd, says he's got just the package for you to rip and roll.

"There's nothing really that we can't do," says the chief executive of Malaysian-listed Karex, Goh Miah Kiat, who is better known as "MK". He says this while holding a phallic-shaped glass mould in his hands and balancing another kind of mould between his thighs. The former is dipped into latex to make "pleasure dome" condoms with larger "headroom" for better comfort and pleasure.

"It's like jeans culture - if you can have skinny, straight-cut or relaxed jeans, then condoms too can come in different shapes," he says.

"(But) it took years and a lot of patience (to make them)," he tells The Business Times in an interview at his corporate headquarters in Port Klang, about a 24-minute drive southwest of Malaysia's capital city Kuala Lumpur.

The 39-year-old, who has helmed the family business for four years since joining it in 1999, swiftly gets to the nub of the matter: "If you ask any man, they would not want to use a condom. If they can get out of using one, better still."

"At the end of the day, who will be affected? The woman," he says, in reference to unplanned pregnancies. The need to prevent unplanned pregnancies and keep sexually transmitted infections (STIs) at bay continues to be the driving force of the multi-billion dollar condom industry. Globally, sales is projected to double from US$5 billion currently to some US$10 billion by 2021.

Women, increasingly in control of their own sexual health, now make up half the buyers in the condom market. Still, despite condom makers' best efforts and moves by governments and health organisations to champion sexual wellness, condoms do not get much love.

An alarmingly small proportion - just 5 per cent of the global population - use condoms on a regular basis, according to the US Centers for Disease Control and Prevention.

Rubbing it in

It might seem a curious thing that Karex, which counts among its products a yellow-and-green Caipirinha-flavoured condom that was all the rage at Brazil's 2014 World Cup event, has its roots in quasi-conservative Muslim-majority Malaysia. Set against a latex-rich backdrop on a peninsula bristling with rubber trees, however, the tale of Karex's origins is intertwined with Malaysia's.

Mr Goh's great-grandfather and grandfather migrated from China to Malaysia's southern state of Johor in the 1920s where rubber-yielding trees flourished during the commodity's boom years.

Like many others who had flocked to Malaysia's south then, Mr Goh's forebears gravitated to the rubber estates and eventually set up a "proper smokehouse" to turn rubber sheets into a marketable product and sell them.

Those were good times; rubber surpassed tin as Malaysia's main export and brought a wave of prosperity but a global commodities crash in the 1980s put paid to the boom, compelling the Goh family to drop out of commodity trading and move into making rubber products.

One factor greatly shaped this transition. "It was the onset of (the) HIV and AIDS outbreak and everyone was talking about protection. Lots of Malaysian guys came up with the rubber gloves. We eventually picked condoms," Mr Goh says.

"That's how it all started."

Both products - rubber gloves and condoms - have lubricated the gears of Malaysia's economy. The resource-rich country is the world's second-largest condom exporter and meets half the global demand for medical gloves in terms of value. Karex, on its own, fulfils about one-sixth of the world's condom demand.

Tender love

Karex, which is 29 years old and in its fourth generation of ownership, was not always called "Karex". In the early days, it was known as Banrub, "ban" meaning "abundance" in Teochew, and "rub" being short for "rubber".

Today, Karex makes condoms for some of the world's largest consumer brands including Durex and Lifestyle, and this contract manufacturing segment alone made up half of its record total revenue of RM344 million (S$110 million) in 2016. It also makes catheters, probe covers and lubricating jelly, but condoms bring the most pleasure to Karex, making up 92 per cent of the firm's topline.

Two-thirds of its products are sold to Africa, the Americas and Europe. In the Middle East, it's a mass market leader. Its own brand business, which includes the Carex brand, made up just 8 per cent of revenue last year.

"People would tell us that we claim to be the world's largest condom maker, yet no one has heard of us," Mr Goh exclaims. "You see, half the world's condoms are actually given out for free... through governments. In India as they push for contraception, in China on the back of its one-child policy, or Africa for HIV prevention. Governments started buying condoms in a big way and we focused on this segment."

The company supplies condoms to the United Nations Population Fund, United States Agency for International Development and global nonprofits DKT International and PSI (Population Services International).

"This (tender business) was our tipping point," he says. The tender business segment contributed nearly 40 per cent to group sales last year.

As government-led demand grew, Karex reaped the benefits of a low-cost business model. The firm is able to produce affordable condoms in big volumes as it makes its own machines for primary tasks such as dipping, testing and foiling. This technological edge comes from two of Mr Goh's uncles, who have engineering backgrounds.

"Because we build our own machines, we never stop building up," says Mr Goh, who last year bagged the vaunted EY Entrepreneur of the Year Award in Malaysia.

Karex's three factories in Malaysia and Thailand can churn out up to five billion condoms a year - that's two billion more than what they rolled out three years ago when the company went public on the Malaysian stock exchange. The factories currently run at around 70 per cent capacity, and there are plans to crank up capacity to six billion pieces this year.

It has also been ramping up its own brand business where margins are relatively thicker. Last year, it added more notches to its bedpost by acquiring UK condom maker Pasante, US brand ONE and a bespoke condom maker called TheyFit which makes condoms in more than 90 sizes.

Analysts say these acquisitions could double the share of its own brand business in the revenue pie.

Now, Mr Goh has set his sights on a bigger prize - penetrating the Chinese market which is expected to enjoy robust 12 per cent growth between now and 2024.

Even as its geographical reach grows, its offerings are set to evolve. Karex, which currently makes condoms from latex only, plans to experiment with new materials. In a field which revolves around one of mankind's oldest activities, there is a surprising amount of innovation.

Already, an Australian university is researching hydrogel condoms that are said to be packed with extra safety features and even feel like human skin.

Japan, on the other hand, has come up with super thin condoms made of polyurethane, a type of plastic, that could bring sexy back to condoms as they transmit heat better than latex covers that block off heat.

"Natural latex will still be the material for condoms as it is cheap and proven but over the next five years, I expect more new materials. It's getting a lot more interesting," says Mr Goh.

ONE to watch

The Karex rubber empire had, at one point, stretched into Singapore as well. The island was the company's first export destination for its own Carex brand which was sold at several 7-Eleven outlets here.

"I was a school kid then and my uncle would ask me to help deliver the product to the outlets in Singapore. Obviously, when he marketed them in Geylang, he wouldn't bring me along," Mr Goh says, laughing.

It's been more than 16 years since Karex stopped doing business in Singapore but that could change soon. Emboldened by the name Karex has made for itself, Mr Goh hopes to sell one of its most hip and upscale brands from the US called ONE in Singapore by the middle of this year. ONE condoms come in arty wrappers and too-cool aluminium cases that can store between three to 50 condoms.

The slick designs on these condom wrappers, which are meant to "minimise the awkwardness" and start conversations on sexual health, were crowdsourced using social media and have drawn keen participation from cities such as New York, Toronto, Sydney, and Buenos Aires.

"We first launched in Singapore for survival. Now, we have gone beyond that and have become stronger and are going back to Singapore with our fourth-best-selling brand in the US," Mr Goh says.

Different strokes for different folks

Asians, he says, have a penchant for barely-there ultra thin condoms. "They want it so good that you can't feel it."

This is true for Malaysian consumers as much as it for those in Singapore.

"People are still conservative over here. Singaporeans, like Malaysians, need to explore the pleasure potential of condoms. Just the ultra thin ones won't deliver what you want. We need to slowly educate them," he points out, referring to the variety of condoms available - ribbed, studded and hundreds of other textures - that are meant for safety and enhanced sexual pleasure.

Americans, on the other hand, like their love socks thicker. This is also the case for same-sex partners.

"In the US, the perception is different. If they want to use a condom, they want to make sure it's all there instead of wondering every moment if it has slipped off or broken." Ditto for European condom users.

In the Middle East, the delay or benzocaine condom that numbs the man's genitals for "extended pleasure" is a big hit.

"This also sells well around the world. Instead of being Mr Two Minutes, you are now Mr Macho or Mr Twenty Minutes," says Mr Goh, without an iota of awkwardness.

In high-risk Africa, where condoms are used to combat HIV, Aids and other STIs, safety trumps frisky and so demand for ultra thin condoms that are perceived to break more easily is low. "Nobody wants to risk their life with ultra thins," he says.

So, are thin condoms more likely to break than their thicker brethren?

"A thinner condom would generally behave the same way as a thick one. It's just a perception thing... a thin condom feels like it's going to break any moment but it's a myth. Condoms are regulated medical devices, so anything we put out in the market would have to meet international standards," he explains.

Indeed, whether a condom breaks or slips are the two biggest concerns among condom users. According to Mr Goh, there's one way to prevent condoms from slipping and sliding or ripping - look at yourself in the mirror.

"Slippage occurs when one thinks he needs a magnum-sized one when it's actually XS. Breakage happens when a condom is too small and is overstretched."

Next up for Karex, then: an app that measures the goods. "I'm pushing my guys now to develop an app where one can snap a photo of their penis and the app will in turn provide their measurement. It's doable and it will be cool, especially for the young who are always on their phones," he says.

CEO charm

Between this "man parts" app in the making and his technicolour array of rubbers, Mr Goh is quite possibly one of the hippest CEOs around.

He starts his work day talking about sex. He gets away with asking his clients if they or their partners liked a certain assortment of condoms. "How many people can do that, huh?" he says.

At events, he regales the crowd with condom tales and answers their never-ending burning questions about what is mostly a blush-worthy private matter for conservative societies.

At shareholders' meeting, he is frequently asked if he himself has tried the various types of condoms.

So, has he?

"Yeah, I would have to try all. We also pass it around to our staff and have a group of friends we call f***ers who try everything and give us feedback," he says.

"It's easy to keep a straight face when I'm talking about my business. It's (been) my life since I was a kid," he adds after observing this writer's nonplussed expression.

But at home, where "condom packets are all over the place", it can be difficult for this father of four girls, who are aged between one and 10, to maintain the same professional detachment.

"Once, my eight-year-old asked my wife if she could open a condom wrapper she found at home. I overheard their conversation while I was in the toilet. I wasn't ready to come out and have that conversation with my daughter," he says.

"I haven't reached that comfort level yet."


"Double bagging"

When two condoms are used at once, it actually flies in the face of protection as it creates more friction and is likely to rip the condom(s).

Is that a gun in your pocket...?

For decades, soldiers, sailors and marines in many countries have been sliding condoms over the muzzles of their weapons for water-borne ops to keep water out and protect their guns.

Men are not created equal...

The snugger a condom fits, the better the sex. Not sure if you are three or 10 inches or unsure about the measurement of your girth? Give a shot.

A sheath by any other name

Condom comes from the Latin word condus, which means a receptacle. Italian anatomist Gabriello Fallopio was the first to describe a condom in his writings in 1564 when he advocated the use of a linen sheath wrapped around the man's genitals to prevent syphilis.

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