Sri Lankan conglomerate Hemas Holdings has completed its first international acquisition, purchasing a 75% stake in Kenyan stationery company Twiga Stationers & Printers for $16.1 million. The Group CEO has identified supply chain management, intensifying competition, and political uncertainty as key challenges ahead.
Hemas Holdings PLC has marked a significant expansion into East Africa by acquiring a controlling stake in Kenya's Twiga Stationers & Printers Limited for $16.1 million through its subsidiary Atlas Axillia Company. The transaction grants the Sri Lankan diversified conglomerate access to Kenya's 54 million consumers and a broader regional market of approximately 330 million people across East Africa, while diversifying revenue away from Sri Lanka's domestic economy.
Group CEO Ashish Chandra identified supply chain management as the most pressing operational challenge facing the venture. The stationery business operates on a highly seasonal model, with approximately 65 to 70 percent of annual sales concentrated in a three-month window from November through January, coinciding with the school year. Securing adequate paper supplies at competitive prices during peak demand presents particular difficulty, Chandra explained, given that paper prices fluctuate based on global commodity markets and external factors such as Middle East economic conditions. He emphasized that Atlas Axillia's established expertise in procurement would be instrumental in addressing this constraint.
Competition represents the second major challenge, according to Chandra. The Kenyan market has recently seen consolidation among competitors, with the third and fourth largest players merging to form a strengthened second-place competitor. Additionally, international players are entering the market, though Chandra suggested that increased competition could ultimately benefit industry development. Twiga operates as a market leader under established local brands including Kasuku, CrownBird, and Envoy.
Political factors also warrant attention, as Kenya's upcoming elections next year could influence government policies affecting the stationery sector. Chandra noted that government subsidies for school materials significantly shape market dynamics in both Kenya and Sri Lanka, and any policy shifts following elections could impact business performance.
