AMG Packaging & Paper Company Limited says its long-planned expansion remains in the preparatory phase, with approximately 60 per cent of the work completed but no capital spending yet incurred as it pushes toward a strategic boost in capacity.

The company told the Jamaica Observer that it has so far focused on identifying the machinery required and a suitable location for the next phase of its growth, with costs largely tied to professional and preparatory fees.

“The costs so far are largely related to the professional and preparatory fees. There has been no capital expenditure related to the expansion as at the end of Q1,” General Manager Michael Chin told the Business Observer.

The update adds detail to an expansion strategy first articulated in early 2025, when AMG said its next phase of growth aims to significantly increase production capacity — up to 10 times current output — by consolidating operations in a purpose-built facility and upgrading key equipment such as its corrugator system.

At that time, company leadership told shareholders they were working with advisory specialists to determine whether to build, lease or acquire facilities capable of housing the expanded operations, along with the machinery needed to lift efficiency and competitiveness.

That strategy flowed from medium-term goals to not only serve Jamaica’s core packaging market but also to support broader distribution across the island and position the business for potential export growth — an ambition driven by the need to improve throughput and cost competiveness.

However, the firm’s latest financial performance highlights the near-term pressures confronting the business.

For the three months ended November 30, 2025, AMG’s net profit before tax fell 38.8 per cent to $22.15 million, compared with $36.20 million in the prior year, according to its unaudited financial statements. Revenue for the period declined 11.43 per cent to $223.75 million as production days were lost due to Hurricane Melissa which disrupted operations and necessitated restoration work.

Lower output also meant reduced manufacturing costs — which fell 12.27 per cent to $145.73 million — allowing the company to maintain its gross profit margin at 34 per cent despite the drop in sales.

The squeeze was more acute on the bottom line, however, with total expenses rising 12.6 per cent to $59.16 million as professional fees associated with planning work and higher wage costs took their toll.

However, AMG’s balance sheet continues to show resilience. At the end of the quarter, total assets stood at $1.75 billion, underpinned by $898.9 million in property, plant and equipment, and $409.2 million in cash and equivalents, offering some buffer as preparatory work continues.

Looking ahead, management has told investors that while the expansion remains central to future growth, meaningful financial benefits from the project are not expected until next year.

“We expect our investors to start benefiting from the increased financial performance by Q4 2027,” Chin said.

— Karena Bennett