Local NGOs succeeds too well for some in condom market

Local NGOs succeeds too well for some in condom market

Peter Janssen, Deutsche Presse-Agentur, Jakarta

It's a performance most companies would be proud of.

DKT Indonesia, through a successful mix of clever advertising
campaigns, innovative products and direct marketing to
pharmacies, brothels and street stalls, captured a 57 percent
share of the 70 million condoms sold in Indonesia last year.

In fact, DKT's sales record over the past six years is
impressive.

According to a mid-2003 A.C. Nielsen survey, sales of most
non-food items in Indonesia have yet to reach the level they were
at in 1996, before a regional financial collapse sent the country
into a "multi-dimensional crisis" from which it has yet to fully
recover.

But during the same period, condom sales, led by DKT's "Sutra"
brand, boomed.

"In six years the non-food market has not increased in volume,
but the condom market has increased by 50 to 60 per cent," said
DKT Indonesia director Christopher Purdy.

DKT, a Washington D.C.-based "social marketing" organization
that was named after Indian family planning pioneer Dhendra K.
Tyagi, is not, however, laughing all the way to the bank.

The non-profit organization is in the condom business to save
lives rather than make money.

"Basically what we're interested in is changing behavior, and
how do you get someone to do something they don't normally want
to do, like use a condom," said Purdy.

Condom use is still deemed the best way to fight HIV/AIDS,
which is only beginning to take off as an epidemic in Indonesia.

Although reported case of HIV/AIDS were only 3,924 by
September 30, 2003, UNAIDS estimates that the real number is
closer to 200,000, with latest data showing alarmingly high rates
of HIV among intravenous drug users, sex workers and gays.

About 52 percent of HIV/AIDS cases in Indonesia caught the
virus via heterosexual sex, experts say.

Brothels and sex workers abound in Indonesia, a country of 215
million people with some 40 million of them unemployed, and
promiscuity among young people is increasingly common, and yet
condom use remains extremely low even by Southeast Asian
standards.

To increase condom use, DKT has spread the message through
educational campaigns and advertisements, launching humorous
items such as durian-flavored condoms and with direct sales of
cheap condoms to brothels, massage parlors and truck stops.

The ordinary Sutra brand condom, targeted for the poor, costs
about one third the price of other brands.

Some, however, have faulted DKT and its donors for disrupting
market forces with their subsidized condoms, claiming that
private sector forces should prevail in the marketplace, even
when lives are at stake.

"The commercial people are angry (at DKT) because it's killing
an already private market," said a consultant from John Hopkins
Bloomberg School of Public Health.

"We feel that DKT is selling the condoms too cheap. I've
complained to the government about this," said Hendra Setiawan,
director of Vonic Latexindo Company, that manufactures Simplex
brand condoms for the Indonesian market.

Setiawan, however, acknowledged that Vonic Latexindo was a
major supplier of condoms to USAID's family planning program for
seven years before it stopped orders.

Condom manufacturing is big business in Southeast Asia, where
much of the world's rubber is grown. Most condoms are made with
100 per cent rubber latex.

While Indonesia has only one large condom manufacturer,
Malaysia has at least 12 and Thailand has four.

For all of these companies, NGOs helping to fight the spread
of HIV/AIDS, with subsidized or give-away products, represent big
orders.

"NGOs, being the most active purchasers of condoms, are our
most valued customers," said Paul Liang, chief operating officer
of NR Synergy Sdn Bhd in Malaysia.

KfW (German Development Bank), which has provided 15.2 million
euros to DKT Indonesia, acknowledged that the subsidizing of
condom costs under the project was an issue for them.

"You should not subsidize something that otherwise customers
would buy in the market at market prices, but nevertheless, we
see that HIV/AIDS is on the rise here in Indonesia, so something
special has to be done," said Jens Clausen, KfW Jakarta director.

Even so, KfW will only subsidize DKT's advertising and
marketing costs as of next year, forcing them to meet their
condom production costs off sales.

DKT's Purdy argues that the group's successful efforts in
social marketing have been good for everyone, not only potential
HIV/AIDS victims but also private sector condom distributors who
have also benefited from an expanding market and customer
awareness.

"The market for condoms has more than doubled in the past five
years and most of that growth is because of the availability of
condoms that we have put out there and because of advertising and
changing behavior," said Purdy.

dpa pj jh ct

GetDPA 1.10 -- NOV 26, 2003 09:21:23