Karex seeks to increase global condom market share

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KUALA LUMPUR (Nov 27): Karex Bhd, the world's largest condom maker by capacity, wants to increase its share of the global condom market to 18% next year from 13% now, underpinned by new product launches.

Its chief executive officer Goh Miah Kiat said the group is launching a new brand of polyisoprene condoms, a newly-developed alternative to natural latex.

"We are now getting the relevant approvals from the authorities and are hopeful to launch this new product by the first half of 2015," he told reporters after Karex's annual general meeting (AGM) today. 

Goh said the product will first be launched in the US and European markets, followed by Brazil and Russia which are big markets for condoms.

"Subsequently, the product will be introduced to other regions such as Southeast Asia," he added.

Another key factor contributing the growth of Karex's market share next year is the increasing global demand for condoms, which is projected to grow by 9% per year.

"In line with this, we will be increase our capacity to 5 billion pieces in 2015 to meet the market needs," said Goh.

On its earnings outlook for the current financial year ending June 30, 2015 (FY15), Goh said it expects to maintain double-digit growth.

Karex recorded a 12.5% and 16% growth in net profit for FY13 and FY14 respectively. This is on the back of an average 23% growth in revenue for the past three financial years.

"Historically, we have been recording double-digit growth over the past three financial years," said Goh.

On the weakening of rubber prices, Goh said while it will definitely be credit positive for the group, the effect will not be significant.

"Rubber only account for 30% of our total operating costs. Utilities, manpower and packaging make up the bigger chunk of our costs," he added.