0IR4 Auga Group Ab

AUGA group, AB and its subsidiaries (hereinafter – the Group) consistently implement the objectives set out in the strategy to develop sustainable agricultural technologies and apply them on farms in a cooperative principle, thus reducing emissions from agriculture. To increase the scale of impact, the Group will start implementing more sustainable practices in regenerative conventional agriculture by converting a part of the Group's organic lands into conventional ones. Additionally, the Group will invite all farmers to join the sustainable farming community. This will ensure a greater expansion of AUGA's sustainable farming standard and significantly reduce agricultural emissions not only in organic but also conventional farms. It is also expected to improve the Group's financial results and provide greater scaling opportunities.

The Group has been a deeply committed pioneer on the sustainable side of agriculture for many years and has been preparing to expand its footprint internationally to the widest possible audience.

“We are developing innovative emission-reducing technologies such as biomethane and electric powered tractor AUGA M1, and the AUGA sustainable farming standard. We have established 11 cooperatives and will invite farmers to join and work in the AUGA way. However, we are seeing a trend of organic farmland decreasing in Lithuania, and agricultural policy is increasingly focused on greening conventional farms rather than developing organic ones.  To achieve the goals, set out in the strategy and to solve the problem of emissions from the whole agricultural sector, we can no longer continue to work only in the niche market of organic farming, which in Lithuania accounts for only 8% of the total cultivated land area," says Kęstutis Juščius, CEO of AUGA group, AB.

Kęstutis Juščius adds that by attracting not only organic but also conventional farms and applying technologies and work methods, the Group will expand the scope of its operations, have a much greater impact on emissions, and also achieve better financial results.

“Moreover, we see a significant market demand for producing products with lower emissions in all product categories. We will meet this need by supplying more sustainable raw materials to food processors and manufacturers in much larger markets than we have been able to do so far.  AUGA branded end-consumer-products such as dairy, oat flakes, porridges, and vegetables will remain organic, made from raw materials grown in AUGA organic farms," says Kęstutis Juščius, CEO of AUGA group, AB.

According to the Agricultural Data Centre, the area of organic farms in Lithuania decreased by 18% in 2023. As the number of organic farmers decreases, it would be difficult to achieve the development of the AUGA sustainable farming standard and reduce emissions from the agricultural sector's production. Moreover, there has been volatility in organic commodities’ prices in the main markets of the Group.

Therefore, this step to develop organic and regenerative conventional agriculture at the same time will allow the Group to diversify markets risks, reduce income volatility caused by the result of climate change, and lay the foundation for future growth. The Group also anticipates that due to increased efficiency and better land utilization, it will be able to improve financial results.

The main sources of emissions in both organic and conventional agriculture are the use of fossil fuels, emissions from the soil, and internal fermentation processes in livestock. The Group is implementing a strategy to reduce emissions by replacing fossil fuels in agricultural machinery with biomethane produced from livestock and crop residues, by applying regenerative crop rotation and using specialised feed for cattle. These practices and technologies will also be applied on conventional farms.

"The Group's strategic goal remains unchanged - to achieve climate neutrality by 2030. In the short term, emissions per tonne of production can be improved due to increased efficiency. The Group's strategy foresees that sustainable agriculture technologies and know-how will be shared with farmers on a cooperative principle. We have already taken the first steps by establishing cooperatives across Lithuania. We will have enough arable land to meet the demand for organic products. The main activity of the Group remains organic farming and the production of more sustainable organic products," says Kęstutis Juščius.

CEO of AUGA group, ABKęstutis Juščius+370 5 233 5340

Auga Group Ab (LSE:0IR4)
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