Rising Costs Trigger Industry Concerns
Indian condom firm Aabha was the latest contraceptives giant to warn of soaring prices both at home and in the Western markets on Monday, following supply chain disruption and scarcity of oil-derived raw materials due to the Iran war.
“The effect would have been short-term if the war had ended in a week or two. But as you can see, the war is still going on. We still have no clarity. We still have to pay extra amounts for procuring material, and I don’t think now the prices would go down,” said the firm’s representative.
“We are third party manufacturers. We manufacture for big pharma companies. So we would have no other option left than to increase the prices.”
Production Challenges and Material Price Surge
Footage from the facility in Maharashtra shows condoms being tested and packaged up. Aabha supplies the domestic Indian market, as well as Europe and other global regions. The representative also explained how crude oil byproducts were used in the foil packaging, the rubber itself, and the lubricant.
“The oil is expensive. Latex is expensive. Ammonia is very expensive right now. And even the silicone oil prices have skyrocketed,” he said. “So the prices [of rubber] have drastically increased over the past few months. The price has gone up by almost, let’s say if it was 130 rupees per kilogram, now it’s 181/170 rupees per kg.”
“We required the finest quality rubber for our product. It’s not like any other product, like the rubber which are used in tires… And many products are rubber-based, but in our product, we cannot compromise on the quality of rubber because the product is very critical,” he added.
Global Impact and Market Growth Outlook
It comes after Malaysia’s Karex, the world’s largest manufacturer – supplying US Trojan and UK Durex brands in the West – also said last week that prices would need to rise 20-30 per cent, or even more.
The crisis is primarily down to the shortage of ‘naphtha’, a byproduct of petroleum – used in anhydrous ammonia and silicone oil, two key components in condom manufacturing.
Half of Asia’s supplies of naptha are from the Middle East, and costs have reportedly quadrupled since the start of the Iran war, amid disruptions of shipping and supply chains, notably the critical Strait of Hormuz.
Meanwhile, industry experts say India’s condom market is valued at about US$860 million in 2023 and projected to reach US$1.8 billion by 2030.
Article by Viory
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