The organic food producer AUGA group and its subsidiaries (Group) have signed financing agreements, according to which the Business Aid Fund (Fund), which is managed by the State Investment Management Agency (VIVA), and Medicinos bankas provided almost EUR 10 million in financing to the Group.
“The funding received will ensure the financial stability of the Group in the short term, and in the long term will allow us to continue to develop of the technological projects envisaged in our strategy and start their commercialisation. We expect 2022 to become a major year of technological breakthrough for the Group − we plan to launch biomethane production, employ our zero-emission hybrid tractors on farms, and complete testing of specialised feed technology,” says Kęstutis Juščius, CEO of AUGA group.
The Fund helps large and medium-sized businesses in dealing with the effects of a pandemic.
“The funding provided to AUGA group will help balance financial flows, continue planned investments and develop innovations. For the most part, the Fund will provide financing by redeeming EUR 6 million worth of bonds, also a loan of EUR 1.28 million. Funding is provided for a period of 4 years. The group of companies will have the possibility to repay the financing in full or in part without any restrictions before the agreed deadline,” says Dainius Vilčinskas, CEO of VIVA.
According to D. Vilčinskas, CEO of VIVA, although the challenges caused by the pandemic did change, they did not disappear. It is vital for businesses to continue to invest, and develop innovations, and for financial assistance to move smoothly into the post-pandemic economic cycle.
In 2021, Group faced challenges caused by the COVID-19 pandemic, with unavoidable outbreaks in some of its production units leading to short-term production capacity shortages. The Group’s plans also had to be adjusted to factor in disruptions in global logistics, resulting in increased logistics costs, an unbalanced supply chain, and delays in the implementation of export projects due to transportation shortages. The extreme heat recorded in June and July of 2021 also had a significant impact on the results of the Group.
Medicinos bankas, focused on agricultural and other green investments, has also signed an agreement with the Group. Medicinos bankas provided the Group with a loan of EUR 2.5 million for a period of 3 years.
“We are happy to contribute to the development and strategic goals of one of the market leaders − AUGA group. We appreciate and support the values, activities, and ambition of this Group of companies to develop green crops and dairy practices that not only contribute to reducing greenhouse gas emissions, but are also modern, innovative, and sustainable. We see that the market demand for organic and sustainably grown and produced products is growing. Furthermore, we believe that more and more people will appreciate food and other products that not only look and taste good, but whose path to our tables is less harmful to the environment. We believe in this and want to contribute to the implementation of such projects,” says Julius Ivaška, Head of Commerce at Medicinos bankas.