A slowdown in business across the manufacturing sector over the months of March to May 2024 has caused box-making company AMG Packaging to report a fall-off in revenue for the quarter; however, new-found efficiencies in its manufacturing processes kept third-quarter earnings of the company intact.

Box sales for the third quarter ending May 31 plummeted 16 per cent year on year to $242.4 million. Still, earnings of the company rose 8.8 per cent for the quarter to $35.1 million year on year, owing to manufacturing cost savings at AMG’s St Andrew-based production plants from new machinery the company installed in 2022.

For the quarter, AMG shaved manufacturing costs by 25 per cent year on year, down to $153 million. The performance brought down manufacturing costs from $192.5 million to $153.6 million, or 14.5 per cent for the nine months to May 2024.

“We continue to benefit from efficiencies gained from the installation of our new machinery,” Managing Director George Hugh said.

AMG’s investment in the buildout of a second factory on Retirement Road in Kingston, along with the acquisition of new machinery in 2022, began bearing fruit just 12 months later. At the close of financial year 2023 the box maker reported a three per cent decline in manufacturing costs.

The company is not yet through the 2024 financial year but already it has quadrupled last year’s cost savings while having the capacity to handle higher sales.

But now it’s contending with a slowdown in sale orders.

“This can be attributed to the downturn in the economy which is currently affecting the manufacturing sector,” Hugh opined, adding that there was a reduction in the number of orders received within the quarter.

Data from Statistical Institute of Jamaica (Statin) shows that growth in Jamaica’s manufacturing sector slowed by 2.3 per cent in the fourth quarter of 2023 but rose by 1.1 per cent for the first quarter of 2024.

The changes in the box sales market come at a time when AMG Packaging is gunning for growth. The company wants to capitalise on lowering production and raw material costs, alongside rising internal efficiencies and growing demand.

AMG Packaging has been vocal about its plans to acquire a third property but is still tight-lipped on the details about how the property will be used.

AMG acquired the property — which adjoins its current facility at 9 Retirement Crescent in St Andrew — about five years ago but it has been less than two years since AMG Packaging commissioned the new factory.

The complex was initially targeted at alleviating some of the space constraints at the first facility but the board later decided to utilise some of the space to construct a second production plant. That decision has led to the doubling of the company’s production capacity.