The world’s largest condom maker is raising prices of its products by up to 30 percent, warning that shortages of raw materials and chemicals because of the Iran war could disrupt production.
The Malaysian condom company, Karex, which produces about five billion condoms a year, blamed a surge in raw material prices, global shipping disruptions and higher freight costs for the price increases.
The de facto closure of the Strait of Hormuz has led to a surge in the price of oil and gas, disrupting supply chains and driving up costs for a wide range of materials that companies like Karex depends on, including nitrile and synthetic rubber, packaging materials, silicone oil and aluminum foil.
“Some raw material prices have increased by 100 percent. We have no choice but to make adjustments now,” Goh Miah Kiat, the chief executive of Karex, said in an interview with The New York Times on Thursday.
The company says that it makes about a fifth of the world’s condoms and uses more than a hundred chemicals and raw materials in its production. If the war persists, Mr. Goh said, a shortage of even a single item could ripple through its factories and bring production to a halt.
“There will be jobs that will be at stake, ” Mr. Goh warned.
Karex supplies some of the world’s best-known contraceptive brands, including Durex and Trojan. The company employs around 3,000 people in its factories in Malaysia and Thailand, and sources materials from countries across Asia and Europe. It sells its One brand of condoms for an average retail price of 9 ringgit for a pack of three, or over $2, in the Malaysian market.
The company has long supplied condoms to government-funded programs for AIDS prevention and family planning. That segment of the business took a hit last year after the Trump administration cut funding to the U.S. Agency for International Development, which supported condom distribution initiatives in foreign countries.
Still, Mr. Goh, who has been the company chief executive for more than a decade, said that the company has seen demand for condoms rise this year, including in developing countries, and he warned of possible panic buying among consumers if supplies run low and the Iran war drags on.
“Everyone hopes that this ends fast and swiftly,” he said.
Source:
www.nytimes.com
