Pandamaran, Port Klang, holds fond memories for me, as it was where my late father used to take me regularly on weekends for long seafood lunches featuring crab cooked in a multitude of ways and the town’s speciality of Teochew-style steamed pomfret with rice noodles and salted vegetables. My visit to the quaint Klang town today, however, featured flavours of a completely different kind.
Flavours of life
I am here today to reconnect with Goh Miah Kiat, the endearingly-youthful head of Karex Bhd, whose company name might not be as instantly attention-grabbing as that of its products — condoms, in a multitude of flavours and varieties. Goh, or “MK” as he is best known, recently made the headlines when newswire AFP reported that Karex was launching a nasi lemak version of the prophylactic. And this was after Karex’s durian-flavoured one (studded too, if you must know) hit the market about a year ago.
“It’s not a marketing gimmick,” says MK in his beautiful office. “And, I can tell you, I found it hilarious to read all the comments when news of it broke. I wanted something that encouraged Malaysians to talk and, of course, to encourage the use of contraceptives. And nothing unites us like food. I also wanted something we all have in common, nothing too scientific. I can talk about graphene (a thermally conducive material that is also incredibly thin and strong, said to be the perfect material for condoms, and permeable only to water) but, I can tell you, it won’t resonate. Innovation is much easier to accept if it’s understood.”
“I’m not a fan of durian but I still developed it,” he adds with a grin. I say that I cannot imagine what a nasi lemak condom might be like, and MK, with characteristic openness and not a trace of shyness, describes, “It smells like nasi lemak, but from a pandan and coconut perspective. I mean, it has got to be fragrant. No one will want it if it smells fishy,” he laughs. “And it’s also studded … to give the sensation of anchovies and kacang (peanuts). In all, it took about a year to develop, from idea to conceptualisation. In the end, it’s still a medical device and the product needs to be tested, to ensure it is stable, with no side effects.”
Young but with lashings of savoir faire, MK — suitably dressed in a smart suit with Audemars Piguet’s Royal Oak on his wrist and Hermès protecting his feet — brings a worldly sophistication to the thoroughly industrial environment. Exceedingly hands-on and driven, a typical day for the young CEO starts at 8.30am and 12-hour days are par for the course. We sit down to drink cups of delicious BB Detox Kusmi tea from Paris. “It’s my favourite,” he says, of the unusual green tea, which has notes of maté, rooibos, guarana and dandelion. His expansive office reminds me more of a suite at a St Regis hotel, coming complete with blue-and-white porcelain bowls overflowing with Phalaenopsis orchids, Khalil Ibrahim artworks on easels, a pony hair table from Marina Home in Dubai and DeLonghi and Nespresso Aerocinno coffee machines. It’s hard to believe we are in the heart of Karex’s kingdom. The only giveaways are clear glass jars on the coffee table containing, not cookies and bonbons, but brightly-coloured circular packets of condoms.
Driven to succeed
Karex has been the world’s largest condom manufacturer by capacity since 2011, when it hit the three billion mark. The Pandamaran factory has been in operation for the past 14 years and next year marks three decades since the Goh family began the shift from rubber processing to condom manufacturing.
Currently, around 400 people work at the factory, which also houses Karex’s corporate headquarters. Three other facilities — two in Johor (Senai and Pontian) and the largest, in Hat Yai, Thailand — make up the production muscle of the company. Hat Yai and Pontian are the largest factories, producing 2.2 billion and two billion pieces respectively each year, followed by Port Klang at 0.8 billion and Senai at 0.2 billion. Its nearest competitor by capacity, Suretex Ltd, is a comfortable distance away with 2.2 billion pieces.
And although diversification is on the cards — with medical devices like ultrasound probe covers and catheters as well as sexual wellness aids like lubricating jelly and dams, a vaginal latex covering marketed towards the W2W (woman-to-woman) segment — condoms remain the company’s bread-and-butter product and contribute about 93% to revenue. Karex listed on the Main Market of Bursa Malaysia in 2013 and the Goh family remain majority shareholders with a 57.6% stake.
“My great-grandfather came from China and started life here with a single sundry shop surrounded by rubber plantations just outside of Muar,” shares MK. “He arrived in Malaya with several relatives from our ancestral village, which is located between Swatow and Teochew. He later went back to China and returned with my great-grandmother. My grandfather Huang Chiat was more entrepreneurial by nature and always looking at how to do things better. He could have taken it easy by tapping rubber or owning rubber estates but decided he wanted to process rubber, so he had the latex made into sheets and began trading them internationally.”
Armed with just a Standard Six education, Huang Chiat nevertheless impressed the importance of education on his seven children, five of whom went on to earn university degrees. “My grandfather had done well enough to send several of his children abroad to study. It was the 1970s and you must remember what a big deal it was in those days to receive higher education, let alone a foreign one. Two ended up graduating [with degrees] from the UK, one from Australia and one more from New Zealand.” MK himself is an economics and management graduate of the University of Sydney.
By the 1980s, however, turbulence came in the form of a global commodities crash, causing Huang Chiat’s business to plummet. But out of adversity comes opportunity, as Benjamin Franklin once said. Many of Malaysia’s rubber producers had to reinvent themselves, choosing between rubber gloves and condoms. “My grandpa had wanted to manufacture both,” shares MK. “He established Karex in 1988 and had already bought the first machine — a condom-manufacturing one — and had wanted a second machine. We were also trying to build our own as well. But before we got the machine ready, prices of rubber gloves had tumbled from about US$100 per thousand pieces to US$30 to US$40. That was when the family realised we had better stick to just condoms.”
I saw successful people around me and that inspired me. I also learnt a lot from my customers. In life, what I have learnt is that you need to be hungry and I was hungry
Leng Kian, MK’s uncle and executive director of technical and R&D at Karex, was also quite the inventor. “He told me he could build machines and I never believed him. I mean, talking about machines with moving parts and all … these were things only ang mohs could build. Then, you could only buy machines from abroad and it tended to be German machines, which were small and expensive. We wanted something with more capacity as well as energy efficiency. Our first machine wasn’t perfect and we struggled with quality while trying to fix the problem ourselves. In the end, we bought steel bars, welders and, somehow, put things in place. So, when I saw what my uncle could do, I was impressed and then realised what human beings are truly capable of. And when we succeeded in making a condom machine that met our needs, things began to really change.”
Globally, the shadow of HIV and AIDS had begun to loom, resulting in a spike in the demand for condoms. “We were already exporting from day one,” adds MK. “Malaysia then was a small market. And we were competing with the likes of India, South Korea and so on. What we needed most was the price advantage, which is always the first step to securing a client.”
Karex’s big break came in 1997 — in part, due to the Asian financial crisis, which made the US dollar/ringgit exchange rate leap from 2.70 to 4.50. “Business volume just grew organically from then on.”
Of life and latex
Growing up in a family that makes condoms, openness and a sense of humour are necessary. “It’s not your traditional family business,” laughs MK, “but it’s not something to be shy about either. In fact, we used to have blown-up condoms instead of balloons at family parties! The colours may not have been as vibrant but we made do as we didn’t have money then.”
On joining Karex straight out of university, MK admits it was never his intention to do so, nor was it his father’s. “My mother used to admonish me when I was younger … how if I didn’t study hard, I would have to go and work in grandpa’s factory,” he laughs. “Karex then was very small and my dad had wanted me to go out and work for others.” However, his father’s untimely passing during his second year at university made MK acquiesce to his family’s wishes.
Joining the company at the age of 21, MK adopted the bottom-up approach, in the sales and marketing department. “I already had two engineer uncles at Karex, so I came to fill that niche,” he says, matter-of-factly. And MK did it spectacularly, growing Karex’s revenue from RM7 million in 2000 to RM360 million last year. On how he came to achieve such stellar results with no prior working experience, MK smiles modestly, saying, “I saw successful people around me and that inspired me. I also learnt a lot from my customers. In life, what I have learnt is that you need to be hungry and I was hungry. Also, in economics and business, it’s all about demand and supply. If there’s supply but no demand, what then? So, I always ask myself, ‘There are so many other manufacturers, why buy from me?’ You have to do things differently! And it helps that I also see my uncles working hard and how, after the products and packaging are all done right and shipped out in containers, my family will say, ‘Let’s go out to dinner’. I can tell you, those dinners taste the best … better than any Michelin-starred meal money can buy!”
Although he intends to hit the seven billion pieces mark before the year is up, he qualifies that, saying moving up the value chain is still his main priority, not capacity. “Our production is at the 5.5 billion mark now but we are seeing increasing demand for thinner condoms. In the 1980s, people feared contracting HIV and AIDS, so they wanted thicker condoms to feel protected and safe. Now, it’s all about pleasure.”
When asked if the introduction of new HIV-prevention drugs like PrEP have affected sales, MK says: “PrEP has been around for a few years now, while men who wear condoms constitute only 5% of the population, so there’s lots more room to grow. Also, PrEP is more for the high-risk market, so I don’t think that affects us. What I can’t stress enough is how STIs (sexually transmitted infections) are now a bigger problem than HIV.”
He goes on to share how a new strain of antibiotic-resistant super gonorrhea has emerged. “Over a million people contract an STI every single day … the UN puts it at 500 million per annum. That’s a serious thing.” Serious enough to even attract the unlikely attention of Bill Gates. The Bill and Melinda Gates Foundation had, a few years back, awarded US$100,000 to scientists at the University of Manchester’s National Graphene Institute to create a new generation of the thinnest, lightest and most impenetrable condoms to combat and change the mindset that prophylactics prevent pleasure. “Hence, Karex is now focusing on lightweight condoms that are super safe and yet breathable in order to encourage more people, especially the younger generation who are not into condoms, to use them.”
Community and corporate initiatives
As World AIDS Day was just celebrated on Dec 1, it is timely to highlight Karex’s upcoming annual community initiative — art against AIDS. Making its debut two years ago, art against AIDS is an annual charity art auction that raises funds for charitable organisations while educating the public on HIV/AIDS and other pertinent sexual health issues as well as to show solidarity with the millions of people living with HIV in the world. “It will be held on Dec 14 at Black Box, Publika,” says MK, who is an art aficionado. In fact, as we take a break for lunch, he whips out his mobile phone to show me a snapshot of a painting of a warthog by the great Ahmad Zakii Anwar. The Karex corporate HQ itself resembles a bijou art gallery.
Back to the subject matter, MK shares how 17 artworks by established names as well as 13 student pieces will be up for auction. “This is our third year and our beneficiaries include Pink Triangle — the non-profit organisation that works on improving education about HIV/AIDS as well as provides care and support programmes for drug users, sex workers, transsexuals and those living with the disease — and Pertubuhan Kesihatan Dan Kebajikan Umum Malaysia, which provides assistance to the marginalised and underrepresented community, and builds a safe, non-discriminatory haven for the needy.”
Another key event for MK is the handover of the EY Entrepreneur Of The Year Malaysia mantle to this year’s winner at a gala dinner on Dec 7 at The Majestic Hotel Kuala Lumpur. Reminiscing about his win, MK says: “It was really unexpected. Moreover, so many great entrepreneurs were vying for it and to have won in the Master category, let alone being country winner, was something beyond my imagination. In fact, when we submitted the application, I had thought of competing only in the emerging category as I was just 38. Who knew?”
His takeaway from the whirlwind three days in glitzy Monte Carlo this summer representing Malaysia as country winner during the EY World Entrepreneur Of The Year awards? “You learn a lot standing on the global stage. To me, those few days in Monaco were really inspirational. I especially liked the talk by William Lauder (executive chairman of the Estée Lauder Companies Inc). After all, his is a family business too. And that 15 minutes spent with the judging panel allows you to reflect. As entrepreneurs, we are always chasing after perfection and to deliver the perfect execution. This year, I am on the judging panel for EY Entrepreneur Of The Year Malaysia 2017, so this gives me a totally different experience. All I can say is that I’m still learning, even as a judge.”
Tomorrow and beyond
“In any business,” he continues, “you have got to go for the long term and remember that there are always ups and downs. And you learn more when you are down rather than up. And it also helps to remember that success isn’t a destination — unless your idea of it is retiring by the beach.”
When asked whether he harbours any regrets, he candidly states: “No. No regrets. It is the mistakes that make you better and I really am grateful to be where I am today. And I am always reminded of my grandpa, who passed away when I was 12. I never had many long chats with him as he was a very serious man. He did, however, make me learn Teochew. Although he could converse in English, he wanted me to be able to speak my dialect so I would know my roots. It helps that I have also seen him go through success and failure, the latter occurring in the later part of his life. That truly gave me the hunger to do more, to be more.”
The father of four girls, aged 1½ to 11, is equally adamant about applying the rule of meritocracy when it comes to charting their eventual career paths. “This organisation should outlive any one individual,” he asserts. “It has to be run by the best. But, of course, as a dad, I want them to be successful so, hopefully, I will be able to train and mentor them.” He is happily married to Jennifer Ker.
He shares how he once brought the older children to work and they complained about the smell, referring to ammonia, which is used to prevent liquid latex from coagulating and protect the rubber in condoms. “They said it was smelly so I told them what my grandpa once told me. I said, ‘Girls, this is the smell of money!’ On a more serious note, they do know what condoms are. I don’t know what they tell the teachers at school but I’m lucky I haven’t been called in yet. But, at the end of the day, it is the family business and we must remember: condoms save lives.”
MK has certainly come a long way from the days when, asked what nature of manufacturing his family did, his answer was a vague and non-committal “rubber products”. “And I always hoped it would stay at that. But if pressed, of course, I would admit that we made condoms,” he chuckles. “Also, there was once this person who excitedly remarked: ‘Oooh, so you build condominiums, ah?’” Like the Goh family knows already, a sense of humour is necessary in the condom industry.
This cover story appeared in the Dec 4, 2017 issue of The Edge Malaysia. Save by subscribing to us for your print and/or digital copy.