Entrepreneur

How A Global Economic Crash Made Karex Bhd The World’s Largest Condom Manufacturer

Malaysia is known for its rich rubber plantations because of its ideal climate, soil for rubber, and land space.

Overshadowed by latex gloves, a lesser-known export of the country’s rubber products are condoms.

During an economic crash and the HIV/AIDS crisis in the 1980s, two brothers with an entrepreneurial mindset turned their father’s rubber plantation into a condom factory.

Today, we know this this company as Karex Berhad.

The World’s Largest Condom Manufacturer

Karex is the world’s largest condom manufacturer, churning out more than 5 billion condoms a year and exporting them to over 140 countries. 

The company supplies condoms to the world’s best-known brands.

Some examples are Durex and ONE condoms, the latter of which made the controversial rendang and durian flavoured condoms.

Some of the playful and innovative condoms under ONE Condoms / Image Credit: ONE Condoms

In addition to being a supplier, the company also sells condoms directly to customers through its own brand, Carex

Beyond the consumer market, they supply condoms in bulk to groups like the United Nations and the World Health Organization for use in the prevention of the spread of HIV.

The manufacturing company was founded 30 years ago by brothers, Goh Siang and Goh Leng Kian. Since then, it has been a family business run by two generations over 3 decades. 

Their grandnephew, Goh Miah Kiat, has taken over the role of CEO at Karex today.

Homegrown Rubber Plantation

Karex traces its history to a rubber tree farm and rubber factory owned by Goh Huang Chiat in Muar, Johor. 

Part of a wave of Chinese migrants who came to Southeast Asia in the late 1800s, he was in search of better economic opportunities. 

“He didn’t want to be a rubber tapper or own estates. He actually went on to buy rubber, process them, and sold it to people,” said Goh Miah Kiat.

According to Forbes, he opened a small sundry shop on a rubber estate to barter rice, sugar, and other daily necessities for rubber sheets.

The Chinese immigrant eventually became wealthy enough to send his sons to study overseas.

The condom manufacturing building / Image Credit: Karex Berhad

Soon after came the global commodities crash in the mid-1980s.

Malaysia’s rubber producers had to find new ways to sustain their businesses. Hence, they turned to making rubber products like gloves and condoms instead.

Two of Goh’s UK-educated sons, Goh Siang and Goh Leng Kian, founded the condom factory in 1988.

With their backgrounds in chemical and mechanical engineering respectively, they built and designed condom machines from scratch. 

And it was a perfect time to do so too. The HIV/AIDS crisis was spreading and public health organisations were promoting the use of condoms to the public. 

Inside one of Karex’s factories / Image Credit: Karex

The family lost everything from their previous business and even sold their home to pool money into the factory, where they eventually moved into as well.

“Everyone in the family chipped in. I had aunties who worked 3 jobs. They had to take personal loans and as they were teachers, they did extra tuition to pump money into Karex,” Miah Kiat said in an interview with The Malaysian Insight.

Machines were also limited and slow. With no money to back them up, the whole family would gather around the TV to pack condoms together every night.

Rapid Expansion Through The Fight Against HIV

By 1999, the company had grown to 60 employees, with an annual revenue of US$1.9 million as of 2016.

Goh Miah Kiat returned from studying economics and management at the University of Sydney to take over sales and marketing.

He signed with large high-volume customers like the UN and World Health Organization who were leading the global fight against HIV/AIDS. This move helped Karex to expand rapidly. 

The company has also completed several international acquisitions of companies like UK brand Pasante, US brand ONE condoms, and a UK bespoke condom-maker called TheyFit.

Its own brand, Carex, is a bestseller in the Middle East.

Carex condoms, Karex’s direct-to-customer brand portfolio / Image Credit: The Malaysian Insight

It was listed on Bursa Malaysia in 2013 and became the world’s biggest condom-maker where Goh Miah Kiat was chief executive.

As of 2016, the Goh family retains a 56% stake in the business.

In 2016, Goh Siang made it to the Forbes’ Malaysia’s 50 Richest list at No. 48 with a total net worth of US$205 million (RM864.5 million).

This year, COVID-19 forced the factory to operate at 50% capacity, which sparked worrying reports of a global condom shortage.

However, that didn’t stop them from reaching a higher net profit this year.

The Edge Markets reported that Karex’s net profits for the fourth quarter which ended June 30, 2020, stood at RM1.43 million.

This was in comparison to a net loss at RM1.01 million a year earlier.

In addition to condoms, Karex also produces personal lubricants and sterile latex protective equipment for medical procedures.

For example, ultrasound probe covers and lubricating jelly. However, Forbes reported that it only makes up 4% and 3% of sales. Condoms remain prevalent at 93%.

To date, Karex is the global leader in condom and lubricant manufacturing with operations across the US, UK, Malaysia and Thailand. 

We’re lucky in a way that condoms are a product that is not defined by fashion, or race or religion, or whatever it is. It’s one size that fits pretty much all.

Goh Miah Kiat, CEO of Karex.
  • You can learn more about Karex Berhad here.
  • You can read more about other Malaysian startups here.

Featured Image Credit: Karex Berhad

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