Karex Announces Price Hike Amid Iran War Fallout
KUALA LUMPUR, April 21 (Reuters) - Malaysia's Karex Bhd, the world's leading condom manufacturer, has announced plans to increase prices by 20% to 30%, with the possibility of further hikes if supply chain disruptions caused by the Iran war continue, according to its chief executive on Tuesday.
The company is also experiencing a surge in demand for condoms as rising freight costs and shipping delays have left many customers with lower stockpiles than usual, CEO Goh Miah Kiat revealed in an interview with Reuters.
"The situation is definitely very fragile, prices are expensive... We have no choice but to transfer the costs right now to the customers," Goh stated.
Production and Supply Chain Challenges
Karex produces over 5 billion condoms annually and supplies leading brands such as Durex and Trojan, as well as state health systems like Britain's NHS and global aid programmes run by the United Nations. The condom maker joins a growing list of companies, including medical glove manufacturers, bracing for supply chain bottlenecks as the Iran war strains energy and petrochemical flows from the Middle East, disrupting raw material procurement.
Since the conflict began in late February, Karex has seen cost increases for synthetic rubber and nitrile used in manufacturing condoms, as well as packaging materials and lubricants such as aluminium foils and silicone oil, Goh explained.
Rising Demand and Shipping Delays
Goh noted that Karex has sufficient supplies for the next few months and is looking to boost output to meet growing demand. Global stockpiles of condoms have dropped significantly following deep spending cuts in foreign aid, particularly by the U.S. Agency for International Development last year. Demand for condoms has risen about 30% this year, with shipping disruptions further exacerbating shortages.
Shipments to destinations such as Europe and the United States now take nearly two months to arrive, compared to a month previously. "We're seeing a lot more condoms actually sitting on vessels that have not arrived at their destination but are highly required," Goh said, adding that many developing countries lack sufficient stock because of extended delivery times.
