KAREX Bhd has made a name for itself as the world’s largest condom maker, and a well-run, profitable company at that.

But scale and money are not what drives the company. Instead, it is the conviction that Karex’s c ore product — latex male condoms — is something that creates greater value for society.

“I see it as a product that saves humanity, one that saves lives and gives people choices,” Karex CEO Goh Miah Kiat tells The Edge after a judging session of the EY Entrepreneur of the Year awards. Goh, or M K Goh as he is better known, has been nominated for the master entrepreneur category.

Governments and organisations worldwide have been advocating the use of male condoms among other forms of modern contraceptives. But the advantages of the male condom are that it can help prevent sexually transmitted infections and reduce the incidence of unplanned pregnancies.

Indeed, as Goh articulates in Karex’s 2016 annual report, the work that his team does directly saves lives all over the world.

“Our vision has always been to build an organisation that responds to changing views of sexual health and develops products that inspire people to make better and healthier choices,” he says.

“Through our efforts, we inspire individuals to make educated decisions about their sexual health, and I hope you share my feeling of pride in knowing that our work saves lives around the world.”

Global demand for condoms is growing annually, driven by greater requirement for family planning, improved sexual health education, the prevalence of sexually transmitted infections and the continued threat of HIV and AIDS.

More recently, the Zika virus outbreak also underscored the importance of condoms as a form of contraception, given that the virus can be transmitted via intercourse.

“Condoms remain the best form of contraception and protection as they are the most affordable and accessible means of preventing the spread of sexually transmitted infections. Yet, in spite of the benefits, condom usage around the world is still relatively low,” Goh says.

He cites data from the US Centers for Disease Control and Prevention, which reported that only 5% of the global population use condoms on a regular basis.

Karex has been soldiering on to grow the company and its market share by ramping up production and making strategic investments.

The company made a slew of acquisitions this year, including the purchase of intellectual property assets of TheyFit LLC for US$1.3 million (RM5.6 million) in January and the intellectual properties of Line One Laboratories Inc for US$8 million cash in August. It also acquired Pasante Healthcare Ltd for £6 million (RM36 million) in July to expand its reach in the UK and Europe.

Karex’s products are exported to all over the world with about a third each going to Asia and Africa, followed by the Americas (26%) and Europe (10%).

Karex is slated to produce some six billion pieces of condoms next year, up from the five billion pieces it produced in FY2016, given the aggressive expansion of its facilities in Johor and Hat Yai, Thailand, according to its annual report.

Just over half, or 54%, of Karex’s revenue comes from the manufacture of condoms for other brands via an original equipment manufacturer arrangement and 38% from the tender market. The company has been trying to grow its own brand, which is currently contributing 8% to its revenue.

Amid all this growth, Goh has been front and centre in the tightly run family business that started in 1988.

Goh is the nephew of four of the company’s eight directors, namely Goh Siang, Goh Yen Yen, Goh Leng Kian and Lam Jiuan Jiuan

Since joining Karex in 1999, Goh has grown the company into a global leader with revenue rising 82% over five years to RM343.62 million as at FY2016. Net profit also increased fivefold over the same period to RM66.69 million.

In FY2016, Karex’s net profit grew 11.98% to RM66.69 million from a year ago on the back of a 15.27% rise in revenue to a record RM343.62 million.

According to Goh, the earnings improvement seen in FY2016 was largely due to higher condom sales and the favourable US dollar-ringgit exchange rate.

Karex’s share price climbed to an all-time high of RM3.13 in early January but has since come down to RM2.62 as at press time, giving the company a market capitalisation of RM2.6 billion. 

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