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AMG paper products ready to hit the market

Published:Friday | January 29, 2016 | 1:50 AMTameka Gordon

Box maker AMG Packaging and Paper Company says its new consumer paper products will hit the market in a matter of weeks, a market segment largely served by imports.

The products will include "what we call a lower end and a higher end toilet paper," said as well as a line of paper towels, said general manager, Michael Chin, in an update to shareholders.

AMG is in the process of retaining distributors for the products.

"We are not going into retail for ourselves," he said at the annual general meeting in Kingston on January 21.

Chin estimates Jamaica's toilet paper market at US$31 million.

The general manager also told shareholders that AMG's streamlining of its operations last year resulted in a 50 per cent cut in its sales and distribution costs, from $14 million to $7 million at year ending August 2015.

"We used to pay the cost of making deliveries out to the clients (but) what we do now is that they have to make their own payment for delivery. We used to pay the cost of dyes and printing plates for the clients; the clients now have to, so we have saved a lot in that area," Chin said.

Plates are used to stamp a company's logo onto its boxes. Previously, AMG would develop the stencils but did not price it separately. That now changes. It will still make the stencils, but the clients will now pay for and own them, and are free to utilise them elsewhere.

AMG said it expected no adverse impact on its business relationships as a result, saying it aligned with industry practise.

"Of course, you had some clients who had reservations. But at most, if not all, companies that manufacture like products, you (the client) have to pick up your boxes," Chin said.

Overall, the company saw a $23 million increase in revenues closing the year at $633 million. Earnings per share nearly doubled from 45 cents to 78 cents.

AMG's first quarter results ending November 2015 saw sales dipping by $2 million to $149 million, relative to the November 2014 period. However earnings nearly doubled in the period from 15 cents per share to 28 cents per share.

The box company leased a 15,000-square foot site at Orange Street, Kingston, last year, as additional space for warehousing and manufacturing base for the new paper lines.

tameka.gordon@glenaerjm.com