Malaysia condom maker mixes business and pleasure

The array of cheeky condoms on Goh Miah Kiat's desk -- multi-coloured, textured and flavoured -- would make most business executives blush.

They come with grape and strawberry flavours, pleasure-boosting textures, barber pole-like striping, a "Baggy" model and its opposite, the missile-shaped "Powershot."

They hardly seem the stock and trade of a rural-based family business in Muslim-majority Malaysia, but Goh's Karex Industries has big plans.

Karex already claims to be the world's biggest condom maker by volume, producing three billion annually, more than any other single manufacturer.

But it plans an IPO this year to fund a doubling of output, part of a push to further its growing presence in a market that is expanding due to the world AIDS battle and increasing condom use in huge Asian economies like China.

"We are enjoying an acceleration in demand for condoms," said Goh, 35, Karex's executive director, in an interview at the company's factory in the drowsy southern Malaysian town of Pontian.

Industry estimates project a global condom market worth $6 billion in 2015, or some 27 billion condoms, compared to 20 billion in 2012.

Carex - the brand name of Karex condoms - holds about 15 percent of the global condom market, according to sector analysts.

Other leading brands Durex, marketed by Britain's Reckitt Benckiser group, and Trojan, owned by the US firm Church & Dwight, make up roughly a combined 25 percent.

"It is a recession-proof industry. With growth rates of about eight percent annually, it is here to stay," said Goh, who has a quick smile and gives off a boyish enthusiasm.

About half of Karex's output goes to bulk purchases by governments or international agencies' safe-sex drives, mainly the UN Population Fund and the US Agency for International Development (USAID).

China is a key growth market, as anti-HIV efforts there have accelerated in line with loosening attitudes towards sex.

A Chinese business website in 2011 quoted a former top family planning official as saying 1.1 billion condoms were provided free to users by the government every year.

But religious and social taboos are also slowly being set aside elsewhere in Asia, said Goh.

The largely Catholic Philippines, for example, passed a law in January requiring government health centres to supply free condoms and birth control pills, and mandating sex education in schools.

At Karex's factory -- which operates 24 hours -- workers pull each and every condom down onto an electric-charged tube that can detect micro-flaws.

Samples also are plucked from among thousands of packaged condoms drifting by on conveyor belts and filled with water for leak tests.

Goh's ancestors immigrated from southern China in the 1920s and his great-grandfather opened a grocers amid rubber farms in southern Malaysia.

Expanding into rubber trading, the family later acquired its own plantations, and moved into manufacturing in 1988, when Karex was formed. It began making condoms a year later and now exports to more than 100 countries.

It also has helped make Malaysia the world's largest source of rubber gloves, as the economy moves from an agricultural base towards industries such as medical technology, light manufacturing and palm oil.

A Kuala Lumpur stock listing is planned this year, but Goh said the date and size have not been set.

Bill Howe, president of US-based latex company PolyTech Synergies and a condom industry consultant, said Karex's plans could be overly ambitious.

"I must admit I am surprised by Karex's expansion plans, which seem too excessive compared to global market growth curves," he said in an email to AFP.

Howe warned that growth was flat in the more mature US and European markets and that large contracts like USAID's are not long-term. But he added that developing markets like China held great long-term growth potential.

Wei Siang Yu, a Singapore doctor and commentator on sexual issues, said Asians have long looked down on condoms, inadvertently fueling the spread of disease.

"Many Asians feel intimacy comes only without a condom," Wei said, adding they bear a "sex-worker" stigma.

But Asian youths are having sex earlier and are more exposed to the safe-sex message, he said.

Targeting this demographic, Carex products put pleasure and fun on par with prevention.

Hence the various colours, flavours and irreverent packaging with wording like "Feel the Thrill" and "Max Super Stud".

Karex also does custom orders, citing one particularly "adventurous" European client who requested condoms that glow in the dark to resemble a "Star Wars" lightsaber.

"Compared to a pint of beer, a box of 12 condoms gives you a more pleasurable time," said Goh.

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