Condom maker warns prices may rise due to Iran war supply disruptions

The Malaysia-based condom manufacturer, Karex, is considering raising its prices due to disruptions in the global supply chain caused by the Iran war. The company’s CEO, Goh Miah Kiat, revealed in an interview with Reuters that Karex is facing a shortage of synthetic rubber and a doubling of input costs for materials used in their products. Additionally, rising freight costs and shipping delays have resulted in leaner stockpiles for the company’s customers.

While Karex has managed to meet its supply needs thus far, ongoing disruptions from the war may prompt the company to raise prices by 20% to 30%, according to Goh. He emphasized the fragility of the current situation, stating that the company has no choice but to transfer the increased costs to customers.

The Iran war has caused a slowdown in shipping traffic through the strategically important Strait of Hormuz, impacting the flow of global energy supplies. This has affected various petroleum-derived products, including plastics and rubber. Petrochemicals, derived from oil and natural gas, are essential components in over 6,000 consumer products, such as lipstick, tennis rackets, and pajamas.

Established in 1988 in Johor, Malaysia, Karex is renowned as the world’s largest condom manufacturer. The company produces 5 billion condoms annually and exports them to more than 130 countries. Karex supplies condoms to well-known brands like Trojan and Durex. Shipping disruptions have extended the delivery time for Karex’s shipments to destinations like Europe and the U.S., causing delays of up to two months.

Amidst these challenges, demand for condoms has surged by approximately 30% this year, Goh revealed. The company’s ability to maintain its production and supply chain operations will be crucial in navigating the ongoing disruptions caused by the Iran war.

In conclusion, Karex’s potential price increase reflects the broader impact of geopolitical conflicts on global supply chains and consumer markets. As the company grapples with rising costs and shipping delays, its resilience and adaptability will be tested in the face of continued uncertainties.