SHAH ALAM (Nov 27): Karex Bhd, the world's largest condom maker, will spend RM30 million in capital expenditure (capex) each year in the next three years, compared to an average of RM25 million in the last two years, mostly to facilitate its move towards automation in manufacturing.

Group chief executive officer Goh Miah Kiat said there will be no need to raise funds for the spending as the group is generating enough cash from its profits to finance the capex.

Speaking to reporters after Karex's annual general meeting, Goh said Karex is currently undertaking a five-year plan towards automation to reduce labour costs by 50%. Labour costs currently take up 20% of its cost of goods sales (COGS).

As the condom industry is labour intensive, Goh said the move towards automation is to address the rising costs that led to net profit being halved in the first financial quarter ended Sept 30, 2017 to RM4.21 million, from RM8.14 million previously.

On top of that, Goh said Karex is working with local institutions and universities on research and development (R&D). He said customers can look forward to seeing more interesting products in the near future.

"There will be intensified efforts to look into new product developments where there will be a lot of focus in R&D, [including] beyond using rubber [as the source material]," he said.

The group's much awaited nasi lemak-flavoured condoms should hit the shelves this month, he added.