Condom producer Karex targets world market, plans expansion


  • Business
  • Friday, 11 Oct 2013

Karex Bhd chief executive officer Goh Miah Kiat

KUALA LUMPUR: World's largest condom manufacturer, Karex Bhd, en route to a listing on Bursa Malaysia on Nov 6, aims to raise RM75mil from sales of its 40.5 million new shares at RM1.85 each.

Chief executive officer, Goh Miah Kiat, said from the total proceeds, RM42mil will be used for capital expenditure, RM14mil for working capital, RM10mil to repay bank borrowings, RM5mil for listing expenses and RM4mil for research and development. 

"The listing will enable us to leverage on the growing opportunities in the global condom industry," he said at the launch of the initial public offering (IPO) prospectus here today. 

Goh said the fund raised for the group's capital expenditure would be used to expand the manufacturing facilities.

He said the group was ready to develop its largest factory in Pontian, Johor, which was not far from the company's existing plant.

Goh expected construction of the new factory at the 7.28-hectare site to begin by early next year and be completed by end-2014. 

"Upon completion of the expansion of the factory, we expect our total annual production capacity to increase from the current three billion pieces to six billion by end-2015," he said.

Besides Pontian, the company also has factories in in Klang, Selangor and Hat Yai, Thailand, he said.
He said the expected increase in its annual production capacity was also in tandem with the acceleration in demand of condoms worldwide.

The global condom market was expected to grow at compound annual growth rate of 7.5% from 22.8 billion pieces last year to 30.4 billion pieces in 2016, he said.

Goh said Karex, which currently has 10% of the global market share, expected it to increase to double digits with the increase in demand for condoms worldwide.

In a statement, Karex said the IPO involved the offer of 67.5 million shares comprising the public issue of 40.5 million new shares and an offer for sale of 27 million existing shares. 

"Of these, 47.25 million IPO shares are for institutional and selected investors in Malaysia, Singapore and Hong Kong while 20.25 million shares are for Malaysian retail investors.

"The retail offering of 20.25 million shares would comprise of 13.50 million offer shares to the public and the remaining 6.75 million issue shares to eligible directors, employees and business associates," it said.
Application for the Karex's IPO will be closed at 5pm on Oct 23, 2013.

RHB Investment Bank Bhd is the principal adviser, underwriter and joint placement agent for the IPO.
ZJ Advisory Sdn Bhd and CIMB Investment Bank Bhd are the financial adviser and the joint place agent respectively.

Besides condoms, Karex also produces catheters, latex probe covers and lubricating jelly.- Bernama

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