Since the flotation of the Egyptian pound, the publishing industry in Egypt suffered significantly, given that as an import-based industry around 90 percent of its components are sourced from external markets, according to Printing Chamber at the Egyptian Federation of Industries (FDI).
The problem was compounded further, despite being a component for decades of “Egypt’s soft power,” by the fact that little to no data was gathered on the domestic industry, or even Egypt's ranking in the world in this sector.
Yet, the industry has started to recover, in the wake of Egypt's improving macroeconomic performance, especially the better performance of the Egyptian pound against the US dollar and the stabilisation that the domestic market has begun to witness.
According to Saeed Abdu, head of the Egyptian Publishers Association (EPA) and chairman of the oldest Egyptian publishing house, Dar Al-Maref, the publishing industry in Egypt has faced considerable challenges.
One challenge, Abdu noted, was the absence of a database monitoring the industry’s investments, sales volume, or even basic data, such as the number of authorised publishers in the market, publishing houses, and their share in the Egyptian market.
The EPA has made significant efforts to gather this data, to be in line with countries around the world, as well as other Arab countries, that jumped forward in this industry.
“According to our data, Egypt’s market involved approximately 1,500 publishers and 500 publishing houses, including the illegal ones, with total industry volume estimated at about EGP 3 billion. More than 90 percent of books produced in the domestic market are provided by the private sector, which constitutes the lion's share of the industry in Egypt,” Abdu said.
The flotation of the Egyptian pound was a serious challenge to the publishing industry, forcing around 60 publishers to leave the market in 2017, Abdu noted. Production costs tripled due to hikes in the US dollar, while the price of publications jumped by between 120 and 150 percent. Publishers’ profit margins dwindled by as much as 50 percent, according to Abdu.
This situation has caused purchasing power to decline by more than 50 percent since 2016 until now. And the Egyptian reader’s budget could not bear the hikes.
Yet, Abdu notes, the industry has started to slowly recover as the market has begun to adjust to current economic conditions since late 2018, while macroeconomic indices have started to perform better.
Forged books is a serious challenge in this regard, affecting publishers’ profits and investments, amid the absence of an active intellectual property law.
Markets shrink, costs rise
Meanwhile, Abdu said, tensions and wars in number of neighbour countries, such as Libya, Syria, Yemen and Iraq, excluded these countries from Egypt’s target markets, while Morocco, the United Arab Emirates and Saudi Arabia replaced them.
The countries that have experienced conflict were among the largest market for Egyptian books for decades, with as much as 60 percent of Egyptian book exports headed to these countries, according to Abdu.
On the other hand, paper manufacturing in the domestic market plays a role in the publishing scene. Egypt has only two state-owned factories that produce paper.
According to the head of the Printing Industries Chamber at the Federation of Egyptian Industries (FEI), Ahmed Gaber, paper production costs jumped significantly in the wake of the government’s economic reform programme, followed by the flotation of the Egyptian pound in November 2016. Publishers were forced to resort to imported paper, saving costs but putting further pressure on this domestic sector.
“The only paper manufacturing factories have stopped their work since April because of the price hikes in gas, which reached $5.5 per thermal unit, while it costs between $2.5 to $3 globally. Meanwhile, paper pulp, which is used to manufacture paper, itself is subject to VAT tax, while imported paper is not. Economic variables in the Egyptian market have caused a significant rise in these factories’ debts,” Gaber explained.
Reviving the industry
Amid such serious challenges, the Cairo International Book Fair (CIBF) has become a lifeline for the publishing industry in Egypt.
On a tour in CIBF in its current round, Ahram Online met with number of publishing house representatives who asserted that the event is vital to their businesses and sales.
Ahram Online found that the price a book in standard size ranges between EGP 50 and EGP 60, while larger sizes range between EGP 80 and EGP 120, with discounts ranging between 10 and 20 percent.
But CIBF in its current round noticeably lacks the hot deals of past editions.
Adapting to change
Given existing challenges in traditional print, some are turning to digital publishing as a lifeline for the industry.
CEO and founder of “Kotobna,” the first Egyptian digital on-demand publishing platform, Mohamed Gamal, told Ahram Online that adopting a digital outlook towards publishing has become urgent, to break the current deadlock.
Kotobna is the first platform of its kind that allows to fresh authors to publish works online with an ability to publish on-demand paper copies for readers.
Electronic publishing in the Arab world accounts for only two percent of publications, Gamal said, while the latest report of the Berlin International Book Fair noted that the publishing industry in the Arab world has an estimated value of $4 billion. In the US, electronic books account for 40 percent of the publishing market, and in Europe around 25 percent, while between 15 and 20 percent in India and China. These figures illustrate an untapped market in the Arab world.
“Publishing house owners, particularly in Egypt, still do not believe in electronic publishing, while current readers have started to depend on digital materials more than on traditional paper books. Moreover, electronic publishing has number of potentials, especially that it does not require costs of printing and warehousing,” Gamal highlighted.
He added that the publishing industry in Egypt lacks investment. Thus, electronic publishing could be a way out for the publishing industry to boon yet again, adding that the government should embrace digital publishing in its efforts to boost and invest in Arabic content.
According IBIS World, total revenues of the publishing industry globally raised in 2019 over $119 billion. Furthermore, annual growth in the industry between 2014 and 2019 reached three percent.
The transition toward digital technology, particularly e-books, has created a fast-growing segment. However, e-books are generally priced lower than print works, which has put pressure on revenue expansion.
Mature markets, such as North America and Europe, embraced digital technologies early, but these have reached their apex, producing a saturated e-book market.
Significant space remains, however, in the Arabic content market. Can Egyptian publishers adapt, spurring business as well as sales?