The world's largest condom manufacturer, Karex Bhd., plans to raise prices by 20% to 30% due to supply chain disruptions caused by the Iran war. According to multiple reports, Karex CEO Goh Miah Kiat stated that production costs have risen sharply since the conflict began in late February.
Key Takeaways
Karex Bhd., the world's largest condom manufacturer, plans to raise prices by 20-30% due to supply chain disruptions from the Iran war. Demand has surged about 30%, exacerbated by shipping delays and rising freight costs.
- Karex produces over 5 billion condoms annually, supplying brands like Durex and Trojan, as well as health systems such as the UK's NHS.
- The company faces increased costs for materials derived from oil, including synthetic rubber and lubricants.
- Shipping delays have extended delivery times to Europe and the US from one month to nearly two months.
- Global condom stockpiles have dropped significantly due to reduced foreign aid spending.
The Malaysia-based firm produces over five billion condoms annually, supplying leading global brands like Durex and Trojan, as well as state health systems such as the UK's NHS. The price increase is attributed to rising costs for materials derived from oil, including synthetic rubber, nitrile, packaging materials, and lubricants.
Demand for condoms has surged by about 30% this year, with shipping disruptions further exacerbating shortages. Karex's shipments to destinations such as Europe and the United States are now taking close to two months to arrive, compared to a month previously. Goh noted that many developing countries do not have enough stock due to prolonged delivery times.
The surge in condom prices underscores how the US-Israel war with Iran is pushing up prices of other goods for consumers. The conflict has severely disrupted global oil supplies and petrochemical flows from the Middle East, causing significant disruptions to global supply chains. Around a fifth of the world's crude oil and liquified natural gas (LNG) passes through the Strait of Hormuz, which has been effectively closed due to threats by Iran.
Karex has enough supplies for the next few months and is looking to boost output to meet growing demand. The company joins a growing list of firms, including medical glove makers, bracing for supply chain bottlenecks as the conflict strains energy and petrochemical flows from the Middle East.
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