AUGA group, AB and its subsidiaries presented to the public and investors the principles of a new business model that will enable scaling of technology and sustainable food supply
25 Maio 2023 - 10:44AM
AUGA group, AB and its subsidiaries presented to the public and
investors the principles of a new business model that will enable
scaling of technology and sustainable food supply
AUGA group, AB (hereinafter – the
Company) presented the key principles of the new
business model of the Company and its subsidiaries (hereinafter –
the Group) along with the steps for its
implementation, as approved by the Company’s Board. The Company
believes that this will help to achieve the goals set out in the
Group's strategy more effectively.
"We are consistently implementing our 2020
business strategy to make the AUGA brand synonym for sustainable
food and lifestyle. The new business model will create
opportunities for farmers to use the more sustainable technologies,
that are being developed by the Group, through sharing economy
principles. It will help them work more efficiently and earn more
by joining a new community that enables economies of scale. For
consumers, it is an opportunity to choose food with no cost to
nature, and for investors, it is an opportunity to get a financial
return while making a positive impact," says Kęstutis Juščius, the
Company's CEO.
The Group's new business model is based on three main
pillars:
(i) the development and production of sustainable agricultural
technologies;(ii) the organisation of agricultural activities
through cooperatives, applying AUGAsustainable farming standard;
and
(iii) delivering more sustainable food to
consumers.
A new organisational structure has been put in
place to implement the new business model. AUGA Tech, UAB develops
and produces innovative agricultural technologies which will be
commercialised. AUGA SOFA, UAB will develop AUGA sustainable
farming standards and provide services to agricultural cooperatives
and farmers under franchise agreements. AUGA Trade, UAB will
organise the production, trade and marketing of sustainable
consumer products. All activities of the new business model are
consolidated by the Group company AUGA Community, UAB.
AUGA Tech, UAB
AUGA Tech, UAB will continue developing
sustainable agricultural technologies that enable to reduce
greenhouse gas emissions. The Group has already developed the AUGA
M1, a biomethane- and electricity-powered tractor for professional
use. The tractors from the first production batch are currently
being tested on farms and will be prepared for mass production at
the end of 2023. The Group continues to steadily develop
specialised feed technology to reduce methane emissions from
cattle. It is also developing and intends to manufacture other
agricultural machinery that uses sustainable energy sources.
Revenue from this business will be generated through the lease and
sale of the technologies to the cooperatives served and other
market players.
AUGA SOFA,
UAB
Through AUGA SOFA, UAB the Group will develop
AUGA sustainable farming standards, introduce a cooperative and
franchised model of agricultural organisation and provide farmers
with know-how and digital farm organisation solutions. This will
enable technology sharing and the implementation and scaling of the
AUGA sustainable farming standards. Farms (initially Group farms,
later enabling other farms to join as well) will form cooperatives
which will work the land of the member farms and provide other
agricultural services to their members (and other farms when
capacity suffices) adhering to the AUGA standards and methodologies
for sustainable agriculture and using the sustainable technical
solutions developed by the Group.
The new operating model will first be tested and
refined among the Group's farms. Implementation of the new model
has already begun. Eleven cooperative companies have been
established with Group farms as the founders and members. Assuming
the new model proves effective, there are plans to allow other
farms to join in the second half of 2023. The Group will offer
members of the cooperatives the use of a centralised system for
purchasing the raw materials needed for agricultural activities and
for selling what they produce.
AUGA Trade, UAB
AUGA Trade, UAB organises the production and
marketing of more sustainable organic products and AUGA brand
building. The end-consumer products are produced from raw materials
grown on farms that apply AUGA sustainable farming standards and
implement new technologies that reduce emissions. Such products
have already been introduced on the Lithuanian market and are
available in the country's major supermarket chains. The new
product line currently includes milk, kefir, cottage cheese, sour
cream, eggs and oat flakes. Expansion of this product line in the
dairy and other categories is foreseen in the future. The aim is to
achieve a 10% market share in the relevant categories by providing
consumers with products that are familiar, affordable, and enable
more sustainable choices.
The Group sees global expansion opportunities
not only for AUGA-branded consumer products, but also in
co-branding and suppling food processors with raw materials that
bear the AUGA sustainability mark. The Group’s and other companies’
data show that, for final food products, it is raw materials that
account for the largest share of emissions, so addressing that
issue is of particular relevance in the market.
AUGA Community, UAB
The Group's new organisational structure will enable the
implementation of the new business model and help attract
investments, which is planned in the last quarter of 2023.
"The Group will consider a variety of funding
possibilities – to raise venture capital and private equity funding
within the AUGA Community structure for early-stage technology
development. There are plans to make use of EU green financing
opportunities for the development and scaling of technologies, and
in later stages commercial bank financing will also be used," says
Kęstutis Juščius, the Company's CEO.
Outlook for the future
The new business model will first be introduced and tested in
Lithuania. It will then be expanded abroad through the technology
branch and through the supply of climate-neutral raw materials and
branding.
View the full presentation here: bit.ly/3MWafEb
The presentation slides attached below.
Chief Executive OfficerKęstutis Juščius+370 5
233 5340
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