AMG cites sluggish economy for reduced orders

AMG Packaging and Paper Limited, which makes cardboard packaging for businesses, recorded higher profit but blamed the sluggish economy for its flat sales.

Profit totalled $136 million for year ending August 2024 , up from $89 million in the previous year. The rise in profit came despite a one-quarter rise in administrative expenses linked to salary increases.

Fourth-quarter profit totalled $28.5 million, nearly doubling the $14.8 million reported a year earlier.

AMG operates a mid-sized packaging firm from its factory on Retirement Crescent in Kingston. Over the full year, the company generated $999.7 million in sales revenue, slightly down from $1.01 billion the previous year.

“The decrease shown for the financial year is mainly attributed to the downturn in the economy, reflected in reduced orders from our customers,” said Managing Director George Hugh in the report to stockholders.

The company’s performance mirrored that of the broader manufacturing sector, at least for the June quarter.

The local packaging market includes a mix of imports and locally manufactured items, with main operators being AMG Packaging, Jamaica Packaging Industries, Sterling Packaging, and Red River Limited.

The Planning Institute of Jamaica estimated double-digit growth for the manufacturing of food, beverages, and tobacco, but this was offset by contractions in other manufacturing sub-sectors. Overall, the country’s output, or GDP, for fiscal year ending March 2025 will remain sluggish, according to the PIOJ. The agency projects 1.0 per cent growth at best and negative 1.0 per cent at the low end.

AMG is bullish on business, however.

“We look forward to another positive year,” said Hugh.

Having installed new equipment in its past financial year, the company plans to maintain profit growth by continuing cost-cutting measures, including integrating its operations through an enterprise resource planning system to streamline functions across various departments, such as purchasing, manufacturing, sales, and finance.

“We have engaged an ERP company to develop, train, and install a system suited to our needs. This time-consuming project will bring significant efficiencies,” Hugh added.

The system rollout is expected within AMG’s first quarter, which terminates in November.

steven.jackson@gleanerjm.com