AMG to address weaknesses in company structure

 




The management discussion and analysis for AMG Packaging and Paper Limited, released in its annual report on December 30, 2024, highlighted strategic decisions being considered to improve company operations.

For the Year Ended August 31, 2024, the report stated, risks assessed within the period include the need to address the Corrugator Line through seeking an alternative supplier of f corrugator spare parts due to the permanent closing down of the original corrugator manufacturer.

For the same line, another risk identified was an inability to produce enough sheets to meet the growing demands of the automatic and semi-automatic conversion machines. This will be reviewed and addressed.

AMG has purchased and will install new equipment in 2025. The company manufactures, distributes, and retails cartons including s corrugated, die-cut, specialty, and custom boxes, as well as warehousing products for liquid bulk, beverage, poultry, and storage applications.

Started in 2005, AMG was created when founders saw the need for a local manufacturer of boxes. At the time, 95 per cent of boxes were being imported for use in Jamaica.”

Management for the year ended also identified as needed work on AMG’s ERP system implementation “to provide a single accurate source of data for the entire organization, which helps to reduce administrative and operational costs by providing real-time information.”

Enterprise Resource Planning (ERP) is a type of software that integrates essential business processes within an organization. It streamlines operations across departments.

Management is also focused on reducing risks attached to talent acquisition – Creating a training plan for ERP system implementation.

Another weakness was that of tardiness – with the need for “continual enforcement of the late policy to reduce man-hours loss.

The final area of risk identified was Cyber Security – with he need identified to sensitize administrative staff on data protection, access and storage of information on local computer network and on the internet

The results for the financial year ended August 31, 2024, showed a 1.23 per cent decrease in revenues moving from $1.01 billion (2023) to $999.65 million (2024).

Total manufacturing costs decreased by 10.76 per cent moving from $690.348 million (2023) to $616.036 million (2024).

This movement was attributed mainly due to the increase in efficiencies in production processes. gross profit increased by 19.22 per cent moving from $321.8 million in 2023 to $383.6 million in 2024.

Net income before tax increased by 43.34 per cent moving from $133.002 million (2023) to $190.648 million (2024).

Total expense increased as a result of the movement in depreciation from $42.595 million (2023) to $53.095 million (2024) and administrative expenses moving from $128.653 million (2023) to $134.394 million (2024).

AMG’s cash equivalents shows an increase of 21.5 per cent closing at $360.520 million (2024) as compared to $296.714 million (2023).

The main contributory factor is the increase in interest Income. Accounts receivable for the period increased by 3.4 per cent.

Inventories showed an increase of $96.115 million over 2023 mainly due to the raw materials shipments close to year end.

Current liabilities showed an increase from $120.481 million in 2023 to $176.568 million in 2024.

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