Macmillan buyout opens new chapter in local publishing
A Macmillan stand during a past primary school head teachers’ conference. A local investor has bought the Kenyan unit of the UK firm and renamed it Moran Publishers. Photo/GIDEON MAUNDU
UK publisher Macmillan has sold its Kenyan unit, marking the latest case of divestment from the local market by a foreign firm in the face of stiff competition.
Mr David Muita, who has been the managing director at Macmillan since 1990, bought the firm from its UK parent company at a cost estimated at Sh200 million, raising his stake to 97 per cent.
Following the sale, the firm will re-brand and trade as Moran Publishers.
Mr Moody Awori, a former vice president, is the chairman of Moran and holds a three per cent stake
The advent of the indigenous 8-4-4 system of education in 1985 and the opening up of the publishing sector have made it difficult for foreign publishers to compete with local firms.
Other foreign publishers that have been bought out by local investors after finding the going tough are Longman and Heinemann.
Oxford University Press East Africa remains the only fully foreign-owned publisher in Kenya.
After a decades-long presence, Longman left the Kenyan market in the 1990s as a section of its owners broke off to set up Longhorn Kenya Ltd.
Longman books, however, re-entered the local market from South Africa at the turn of the millennium as an imprint of Pearson Education.
“The publishing sector has seen increased competition with the entry of more local players,” Prof Lucas Othuon, a lecturer at the department of Education, Maseno University, said.
“Foreign publishers are, therefore, moving to new markets where they can compete better, leaving the Kenyan market to local players, who have gained deeper local knowledge and skills over the years,” he said.
The publishing sector has about 15 active companies, including state owned Jomo Kenyatta Foundation and Kenya Literature Bureau (KLB), with a total of 100 registered firms.
The industry sells books worth over Sh3 billion per year.
The government’s introduction of free primary education and subsidy of secondary education has made it the single biggest buyer of text books.
Annually, the State spends Sh1,056 and Sh3,600 per student in primary and secondary schools for purchase of learning materials.
Mr Muita told the Business Daily that Moran Publishers will now expand into the East African market where it will compete head-on with Macmillan operations in those markets.
“Previously, my hands were tied in terms of venturing into new markets. On my own, that is now possible,” he said, adding that the firm will roll-out electronic books that other rivals like Oxford and KLB have ventured into to deepen sales of hard copy books and as a revenue diversification strategy.
Over the last one year, publishers started digitising some of their titles as a value-add to push the sales of printed copies.
The growing uptake of computers and broadband in homes, coupled with the government’s push for electronic learning in public schools, is expected to boost demand for digital and interactive learning materials.
Moran Publishers also plans to launch new products.
The firm is currently present in the atlas, revision, workbooks, wall maps, charts, dictionaries, and readers markets.
Mr Muita said the new strategies should help grow earnings. Before the sale, the firm has been making annual turnovers of about Sh300 million.
Educationists say the takeover of publishing houses by local investors is a positive development for the country’s education system.
“We have developed more competent curriculum developers among other human resources. We should use these more effectively to produce educational material that suits local needs,” Prof Othuon said.
The publishing sector is showing signs of growth though it continues to depend heavily on government orders as a long-running culture of functional reading denies the players sales beyond text books.
