Hemas Holdings PLC’s $16.1 million acquisition of a majority stake in Kenya’s Twiga Stationers & Printers has opened the door to East Africa, but the company faces two forces it cannot control: intensifying competition and potential policy changes following Kenya’s next election.
Hemas acquired 75% of Twiga through its subsidiary, Atlas Axillia Company, marking the diversified Sri Lankan group’s first landmark international acquisition. The transaction immediately gives Hemas access to Kenya’s 54 million consumers and creates a platform for reaching a wider East African market of approximately 330 million people.
But Group CEO Ashish Chandra has acknowledged that the opportunity comes with significant risks.
Competition is already becoming more aggressive. Chandra said Twiga faces renewed pressure after the third- and fourth-largest competitors merged, creating a stronger number-two player. International companies are also entering the market, adding another layer of competitive pressure.
For Twiga, the challenge is not simply protecting market share. Hemas must determine whether the acquisition can deliver enough innovation, manufacturing efficiency and commercial synergies with Atlas Axillia to maintain its position as competition intensifies.
The political environment presents another uncertainty.
Kenya is scheduled to hold elections next year, and Chandra said government policy could influence the stationery and paper market. As in Sri Lanka, part of demand is connected to government support or subsidies provided to schools, which ultimately helps students purchase books and other educational materials.
Any policy change following the election could therefore affect the market.
That creates an unusual risk for a company whose business is also heavily seasonal. Twiga already depends substantially on the school cycle, with 65% to 70% of business generated between November and January. A change in government support mechanisms during a politically sensitive period could affect demand at the very time the company is preparing for its most important sales season.
Hemas believes the similarities between Kenya and Sri Lanka give it useful experience in managing such uncertainties. Chandra said the company is familiar with comparable challenges in its home market.
Still, the Kenyan investment represents a strategic shift for Hemas. The group is seeking to make East Africa and Bangladesh core pillars of its international consumer strategy while reducing dependence on domestic economic conditions.
The acquisition could therefore become an important test of Hemas’s ability to operate beyond Sri Lanka. Its success will depend not only on manufacturing and distribution, but also on how effectively it responds to competitors, government policy and election-driven uncertainty.
For Twiga, the question is whether Hemas can defend an established market position while navigating a business environment that is becoming increasingly competitive and politically sensitive.
