After all, his family’s business, Malaysian condom maker Karex, is the biggest condom manufacturer in the world. And Goh was already well on his way to becoming fourth-generation heir to the business, although at the time he didn’t know what condoms were used for.
Karex transforms rubber — Malaysia is one of the world’s biggest producers — into five billion condoms per year at its four manufacturing facilities. That’s a fifth of the global market.
Karex hopes to raise production to 7 billion per year by the end of 2017. Its products are in more demand than ever, says Goh, amid government campaigns encouraging birth control and preventing the spread of the Zika virus and HIV/AIDS.
“Today the younger generations are a lot more [open to using] condoms than the generation before,” said Goh, now the company’s CEO.
Karex’s products bring in $82 million annually and reach 120 countries.
Karex also designs and develops its own manufacturing machines, which Goh said allows the company to better customize its products.
“I always say that condoms are like jeans,” said Goh. “You have your skinny fit … your straight cut [and] relaxed cuts.”
Customer concerns have changed a lot in 100 years, Goh added.
The condom “started as a medical contraceptive,” he said. “In the ’80s and ’90s, it was more of a safety device.”
Now, consumers take for granted that condoms are effective, and the marketing emphasis has evolved to enhancing sex.
“Now when people use them they don’t ask if they are safe anymore — it’s just about how much pleasure a condom gives them,” said Goh. “So I think that’s how we have progressed, from safety to pleasure.”
Growing up above his family’s condom factory in Malaysia, Goh Miah Kiat had a stock answer if anyone asked what it did. “I just said we make rubber products,” he says, “and hoped people didn’t ask more.” Of course, there was an upside. In school, “Obviously, I was the cool boy … my friends all wanted to know about condoms.”
These days there’s no more hiding. The Goh family business, Karex, is now the world’s biggest condom-maker. Last year its four factories in Malaysia and Thailand churned out 5 billion condoms–roughly 15% of the world market, mostly for export to more than 120 countries. Karex expects to raise production to 6 billion condoms this year and to a rate of 7 billion by the end of 2017.
Karex grew rapidly over almost three decades as a contract manufacturer for the world’s best-known brands, such as Durex, and by supplying bulk orders to global public health organizations. Analysts expect revenue to have reached $91.4 million for the year ending June 30, a 35% rise in two years. Net profit is seen totaling $18.1 million, a 69% jump since fiscal 2014. That performance puts it on our annual Best Under A Billion list for the first time.
Karex recently bought U.K. condom-maker Pasante, which supplies the National Health Service, Tesco and Costco; U.S. condom brand ONE, known for its hip, arty packaging and young customer profile; and a U.K. bespoke condom-maker called TheyFit. Its own Carex brand is already a leading mass-market condom brand in the Middle East. “This strategic shift allows the company to capture more of the industry’s value chain,” says Kenneth Yap, who manages the KAF Asia Equities Fund. The fund holds Karex shares. “If they can sell more condoms at 30 cents rather than 3 cents, their already outstanding net profit margins of 20% can be improved further.”
To do that, Karex plans to tap ONE’s branding savvy. The Boston-based brand with the distinctive tubular packaging debuted last year in Malaysia and will soon be on store shelves in Singapore. Recently, just in time for durian season, ONE introduced a durian-flavored, studded condom.
On a recent morning the smell of ammonia wafts from Karex’s factory in Port Klang, a 45-minute drive southwest of Kuala Lumpur. The ammonia is used to stop liquid latex from coagulating. This is Karex’s headquarters and one of its four facilities. The other factories are in Pontian and Senai, in southern Malaysia, and Hat Yai, Thailand.
Goh Miah Kiat’s great-grandfather was part of a wave of Chinese migrants who sailed to Southeast Asia in the late 1800s and early 1900s in search of better economic prospects. He opened a small sundry shop on a rubber estate in Muar, Johor. Some customers brought in rubber sheets to barter for rice, sugar and other daily necessities.
Goh’s grandfather, Goh Huang Chiat, expanded that side business into a rubber-processing factory. Malaysia is one of the biggest producers of natural rubber in the world, and in its heyday the business included a trading office and a factory in Singapore. Goh Huang Chiat became wealthy enough to send five of his seven children to university–in the U.K., Australia, New Zealand and Malaysia. Then came the mid-1980s global commodities crash. Prices plunged overnight. “It rubbed us out of business,” says Goh Miah Kiat. “Grandfather went bankrupt.”
Malaysian rubber producers–looking for a new lease on life–turned to making rubber gloves or condoms. The Goh family sold its homes, pooled the money and plowed it into a new condom factory. The HIV/AIDS crisis was spreading, and public health organizations were promoting condoms. Goh’s two U.K.-educated uncles, Goh Siang and Goh Leng Kian, had studied chemical engineering and mechanical engineering, respectively; the pair designed and built the condom machines from scratch .
The family slept on mattresses in a room above the factory. Once, when cousins from Hong Kong visited, instead of balloons, they blew up some condoms to lend a festive air.
After a rocky few years the company that would become Karex began to prosper. Goh left Malaysia to study economics and management at the University of Sydney. While he was there, his father, Goh Phon, died unexpectedly, and the extended family took over financing his studies. When they requested that he return immediately after graduating in 1999, he could hardly say no. At the time Karex had 60 employees and annual revenue was $1.9 million.
Goh took over sales and marketing. He signed up new, high-volume customers, including organizations such as the U.N. and the World Health Organization, which were leading the global fight against HIV/AIDS. These large contracts allowed Karex to expand rapidly. By the time the company was listed in 2013, it was the world’s biggest condom-maker and Goh was chief executive. Today the Goh family retains a 56% stake in the business.
The company also makes catheters, but these are only 4% of sales, as well as ultrasound probe covers and lubricating jelly, which make up 3%. Condoms, at 93% of Karex’s revenue, remain the star.
Malaysian condom-maker Karex, the world’s largest manufacturer says that next on his list is nasi lemak flavored condoms. Nasi lemak is one of Malaysia’s most popular foods, a blend of coconut milk-flavored rice, with spicy sambal and garnishes that include fried anchovies, a boiled egg and peanuts.
Goh Miah Kiat, the company’s CEO, knows no-chill after the success of durian-flavored latex goods, and sees the national breakfast food as a natural progression.
He told Channel NewsAsia that: “In Malaysia, the first thing we wake up in the morning, we talk about our nasi lemak.” Embarrassing, but widely accurate. “So, I suppose it is something that will unite us all.”
“People want to use condoms today,” says Goh, “but they also want to feel it’s not there.”