He says that bankruptcy of the Auga group is not likely.
“We will need to transform into another company with a very simplified business model, because we will no longer make technology for the world (…). We will simply be an agricultural company that will save every euro and cent so that we can return the company to financial results that are acceptable to the banks, (…) so that financial obligations to creditors can be reduced,” said K. Juščius on the “Verslo žinios” podcast on Tuesday .
“I don’t consider the possibility of bankruptcy, I don’t even imagine it,” he added.
“Auga Group” announced on Monday about the initiated restructuring of the parent company of the group, which will be decided by the group’s shareholders on December 4.
According to K. Juščiaus, last year the company started the transition from the ecological to the commercial farm segment: “We were not able to achieve efficiency in the first year. We need time to prove for at least one year. And the same debts are no longer so terrible.”
“Once we become stable and financially secure, we will have to think about what we will do with the technologies that we put on the shelf for today,” said K. Juščius.
According to him, the company has invested 6 million in technology development. euros – it developed biomethane and electric tractors “Auga M1”, agricultural machines “Auga E1” and feed production and feeding technology systems.
“We know that it can really be used in commercial agriculture, (…) but the time has not yet dawned for that.” Our technologies are a little ahead of time,” said K. Juščius.
According to him, after stopping the development of the technology, the company will lay off the researchers who worked with the technology.
“We will have to take efficiency and shrink in some places,” he emphasized.
K. Juščius also said that the company faced financial difficulties due to a change in the business environment, as the profitability of organic farming decreased. Despite the fact that the European Union promotes organic farming, the consumption of these products has decreased by about 10% in recent years, and has remained extremely low in Lithuania as well.
Organic and conventional grain prices roughly equalized around 2016 when organic farming losses were amortized by high produce prices and direct payments, he said. K. Juščius emphasized that “Auga” lost more than 12 million. euro payments.
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#Juščius #Auga #normal #agricultural #company #lay #employees #Business
**Interview with K. Juščius, CEO of Auga Group**
**Interviewer:** Thank you for joining us today, K. Juščius. Let’s start with the elephant in the room: You’ve mentioned that the bankruptcy of Auga Group is unlikely. Can you elaborate on why you feel confident in this assessment?
**K. Juščius:** Thank you for having me. I firmly believe that bankruptcy is not a possibility we need to entertain. Our focus is on transforming the company into a more straightforward agricultural business model. By streamlining our operations and cutting costs to save every euro, we aim to improve our financial results, which is crucial for maintaining good relations with our creditors.
**Interviewer:** You mentioned the need to transition into a simplified business model. What does this transformation entail for Auga Group?
**K. Juščius:** Essentially, we are shifting from being a technology-driven company to focusing primarily on agriculture. This change means prioritizing efficient farming practices while potentially shelving some of our technological advancements for the time being. Last year, we started this transition, but it’s clear that it requires time to achieve the desired efficiency.
**Interviewer:** In your recent podcast appearance, you discussed the challenges faced last year during this transition. What have you learned from that experience?
**K. Juščius:** We faced a steep learning curve. Achieving operational efficiency in just one year proved difficult, but we are committed to learning from those challenges and proving ourselves over time. While the debts we incurred may seem daunting, they are manageable as we focus on stabilizing our operations.
**Interviewer:** Speaking of investments, you mentioned Auga Group has invested in technology development. How will these investments fit into your new business strategy?
**K. Juščius:** We have invested around 6 million euros in various technologies, including biomethane production and electric tractors. Once we achieve financial stability, we will reassess these technologies. Our goal is to ensure that when we are ready, we can harness these innovations effectively within our new agricultural focus.
**Interviewer:** Could you share more about the upcoming restructuring decision that shareholders will make on December 4?
**K. Juščius:** The restructuring process is pivotal for our future. We will be presenting a clear plan to our shareholders, outlining how we intend to simplify our operations and return to financial health. Their support will be crucial in moving forward with our transformation.
**Interviewer:** Thank you for sharing your insights, K. Juščius. It sounds like an important time for Auga Group, and we wish you the best in this transition.
**K. Juščius:** Thank you for the opportunity to speak about our journey. We are optimistic about our future and committed to making Auga Group a stable and successful agricultural company.
