Publishers face tough times as Treasury cuts textbook budget

• The sector was the biggest beneficiary of the over Sh28 billion the government releases to schools every year for teaching material.

• Over-reliance on school textbooks came to haunt Longhorn Publishers this week after it posted a Sh22.4 million loss for the year ending June 2012.

Reduced government spending on textbooks has handed the book publishing industry its biggest setback yet at a time when it is hurting from the twin blows of advancing technology and piracy.

The industry that has enjoyed a windfall for almost a decade since the government introduced the free primary education (FPE) and free day secondary education (FDSE) is now bleeding after the government cut down on textbook purchasing.

The sector was the biggest beneficiary of the over Sh28 billion the government releases to schools every year for teaching material.

Handsome returns from the business had attracted more players in the sector. The number of publishers has grown exponentially from just six a decade ago to more than 130 currently.

There are also hundreds of briefcase companies eyeing a piece of the market. The FPE and FDSE programmes made the government the single largest buyer of textbooks.

But last year, the government stopped bulk purchasing of books, ending the windfall that started in 2003. 

No diversification

“Publishers wholly depend on school books to survive. The sad truth is, if you pull the textbook business away from them, most will just close,” Mr Herman Manyora, the chairman of Hillman Publishers told Saturday Nation.

The situation is made worse by the fact that most publishers concentrate on school books only.

“Convincing a publisher to publish anything other than school textbooks is very difficult. However, there are a few who are doing religious and motivational books, but they are yet to get them to a scale that makes it profitable and sustainable for the long-term,” Mr Manyora said.

This over-reliance on school textbooks came to haunt Longhorn Publishers this week after it posted a Sh22.4 million loss for the year ending June 2012. Sales reduced 29.4 per cent to Sh775.9 million from the Sh1.1 billion last year. In 2010, it recorded a profit of Sh127.4 million, a staggering 530.5 per cent rise.

“In an environment where government funding accounts for over 80 per cent of textbook purchases in the major market segments of primary and secondary schools, reduced fund allocation and disbursements resulted in a commensurate reduction in textbook market size,” Ms Janet Njoroge, the outgoing Longhorn Publishers chief executive officer, said in the statement accompanying the results.

Longhorn listed at the Nairobi Securities Exchange on May 30.

The Kenya Publishers Association (KPA) says the situation has been worsened by the teachers strike as they will lose a season of sales.

“Reduction in government orders is mainly due to the fact that it is only ordering books for replacement or those that are worn out,” Mr Lawrence Njagi, the KPA chairman, said. Mr Njagi is also the managing director of Mountain Top Publishers, which posted a 20 per cent increase in sales despite the difficulties.

“Children’s books such as story books and other reading materials like dictionaries are always stable markets that contribute between 10 to 15 per cent of the revenues. But no publishing house can survive on this segment alone,” Mr Njagi added.

Publishers say private schools are becoming a major market for them after the government.

According to Phoenix Publishers, firms that publish other books such as story books have been cushioned from the lower orders from schools.