PARAMOUNT Trading (Jamaica) Limited is negotiating with an unnamed international lubricant marketer to manufacture its brands in Jamaica for local and export markets, a prospective arrangement that could reshape the company’s lubricant operation, although there is no timetable for concluding the negotiations.

Chief Executive Officer Hugh Graham said Paramount deliberately reduced some existing lubricant production to preserve blending capacity for the prospective customer.

“We have a big player at the table that would take up all the capacity that we have,” Graham told the Jamaica Observer on Tuesday.

If an agreement is reached, he said, Paramount may eventually have to expand its plant.

Graham did not identify the customer or disclose the proposed contract’s value, duration, production volumes or export markets. He also did not say whether the parties had signed a preliminary agreement.

He said Paramount had obtained certification to standards developed by the International Organization for Standardization (ISO) as part of its preparations. Graham described the prospective customer as “one of the biggest marketers in the world”.

Graham said he hoped the negotiations would conclude soon but could not provide a timetable, citing the war in West Asia and volatility in the global oil industry.

His explanation provides context for the 43.1 per cent decline in lubricant revenue during the year ended May 31, 2026. Sales from the division fell to $60.6 million from $106.4 million a year earlier. Paramount has not quantified how much of that decline resulted from the production cut or disclosed when the reduction began.

The discussions form part of Paramount’s plan to shift towards contract manufacturing. Under that model, the company blends and packages lubricants for customers that already have established brands and distribution networks.

“We prefer to produce and have someone else market it,” Graham told the Business Observer.

Hugh Graham, CEO of Paramount Trading (Photo: Joseph Wellington)

Paramount already manufactures Futrol lubricants for Future Energy Source Company Limited (Fesco) and the ALTRA brand for Allegheny Petroleum Products Company. Based on Graham’s description, the proposed international arrangement would apply that model on a much larger scale, with production intended for Jamaica and export markets.

The negotiations come after a financial year in which Paramount’s profit recovered but revenue declined.

Total revenue fell 2.1 per cent to $1.69 billion. Chemicals, the company’s largest division, declined 6.9 per cent to $1.13 billion, while lubricants recorded the steepest contraction.

Growth in smaller divisions partly offset those declines. Revenue from construction products and adhesives increased 26.7 per cent to $251.3 million, while manufacturing revenue rose 16.8 per cent to $228.2 million.

Graham expects sales of construction chemicals to benefit from high-rise developments, underground parking facilities, water-storage projects and hotel renovations. Paramount distributes Sika-branded construction products.

He also expects demand to recover among hotels and industrial and water-treatment customers affected by Hurricane Melissa. Paramount, however, has not issued a formal revenue or profit forecast for the new financial year.

Net profit increased to $99.1 million from $26.1 million, although the improvement was supported substantially by $138.1 million in other operating income rather than higher sales.

The largest disclosed item was the write-off of a vendor liability of approximately $54 million after Paramount was informed that the obligation had been settled by the vendor’s parent company. Other operating income included a $33-million unrealised foreign-exchange gain, $33.9 million from services and $10.5 million arising from the termination of a lease.

All were reflected in Paramount’s audited profit, but some may not recur at the same level. A calculation using the audited figures shows that before other operating income and expenses were taken into account, gross profit after administrative, selling and distribution expenses fell to approximately $77.8 million from $153.2 million a year earlier.

Paramount also increased its provision for customer debts that may not be collected to $96.2 million from $50.4 million. At the end of May, approximately $215.9 million — nearly half of gross trade receivables — had been outstanding for more than 90 days.