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Afribooks, the latest acquisition by Mion, had the potential to add R100 million a year into the venture capital firm’s turnover, Manana Nhlanhla, the joint director of Mion, said last week.

July 22, 2008

By SLINDILE KHANYILE

Durban – Afribooks, the latest acquisition by Mion, had the potential to add R100 million a year into the venture capital firm’s turnover, Manana Nhlanhla, the joint director of Mion, said last week.

Mion, based in KwaZulu-Natal, paid Indiza Capital R65 million for Afribooks and its assets. The retail schoolbooks company had previously belonged to Naspers.

The company, which already has a presence in Johannesburg, Durban, Cape Town and Bloemfontein, has the potential to become one of the biggest schoolbook retailers in the country, according to Nhlanhla.

“This is yet another investment in a lucrative sector, where there is a gap in the market in terms of blacks being key players,” she said. “It’s also about having a business where you are in full control, as opposed to buying just a stake.”

Afribooks will focus on distribution. It will also source material from publishers.

Previously, it sold directly to schools only, but Nhlanhla said Mion wanted to expand the client base of Afribooks to government and non-school customers such as libraries, hospitals, prisons as well as corporate clients.

She added: “The firm needs to be re-engineered. We are creating a new Afribooks, which would also manufacture and distribute learner support materials such as pencils, rubbers and chalk. This is where we see the growth area.

“We would partner with small businesses that will be our suppliers, because we have always wanted to get involved in the development and sustainability of small, medium and micro enterprises.”

Nhlanhla jointly owns Mion with Sithembiso Mthethwa. The company has existed for five years. Its other interests are in Smith Amandla Marine, a marine services firm; Digitot, a bar management technology company; and Gold Circle, the horse racing and gaming entity.

“We don’t get involved in fields that we don’t know because we want firms where we can contribute to the growth,” said Nhlanhla. “I am a master in library science and publishing, and Mthethwa is a master of marine science. We also prefer doing business with people we know.”

Mion employs about 60 people, including the staff of Afribooks, the only wholly owned subsidiary. Nhlanhla said the staff complement at the books company could go up to 300 people during peak time.

Costing would be a challenge, “because you can’t encourage people to read if they can’t afford the book. A book competes with a lot of other media.” Strong relationships with the government and publishers would also be key.

Afribooks was aiming to expand to the southern African market, which Nhlanhla said was still buying a lot of books from overseas.