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% to 30% due to supply chain disruptions from the Iran war. Rising costs for oil-derived materials and shipping delays are driving the increase as demand surges.
- Karex CEO Goh Miah Kiat warns of potential price hikes due to material shortages and doubled input costs
- Shipping times to Europe and the U.S. have nearly doubled, exacerbating supply issues
- Demand for condoms has increased by 30% this year amid global shortages
- The Iran war has disrupted oil supplies through the Strait of Hormuz, affecting petrochemical production
- Karex produces 5 billion condoms annually and supplies major brands like Durex and Trojan
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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