Compañía de Tierras del Sud Argentino, the local arm of the Benetton family holding company, is the largest landowner in the country and its businesses are beginning to transcend their agricultural core with disruptive diversifications.Its CEO, Agustín Dranovsky, told El Cronista that the group is facing a mega project to produce green hydrogen in the Argentine Patagonia and is advancing a mining project in the north.
The company has just been part of a multi-million dollar merger between its Faimali meat factory and Estancias de Patagonia, the company of associated cattle ranchers and the largest producer of Patagonian sheep meat.. For this business unit, there are also projects for further development of its kosher production, boosting beef production, bringing sheep meat to the United States and even developing the slaughter of guanacos. Dranovsky assures that the company will continue to grow and invest in the country as it has done for four decades, even when dividends cannot be paid.
What will you focus on after the merger of Faimali and Estancias?
The transition is going very smoothly and we are already working on future plans such as developing markets and taking advantage of the volume we have together to optimize production. We are trying to increase one of the businesses, which is kosher production, which we already had in Faimali.. Now, having more farms with ranches, we can classify better and send the ones that are most suitable for that type of production. We are trying to increase the volume: we started with 200 tons and we want to increase it to 300 tons.
Is there local demand for such kosher production?
The bulk of this demand is for export, but we are beginning to have some contacts to make products for the domestic market. There are supermarkets and restaurants that work with kosher products. And that is where we are beginning to look and make connections to supply them.
Do you have any other projects in terms of livestock production?
We are seeing if we can advance in the production process, in other types of processed meat products to give the merchandise to a supermarket chain or to customers. Now we will also be able to serve some markets that, previously, due to having two separate plants, did not have sufficient scale to generate the volume and serve them.
What kind of prosecutions would they launch?
We could take the tray directly to a branch or make a product like hamburgers or milanesas, sliced products or sausages.. Estancias is the main supplier of La Anónima. The new processed products could be sold under the same Estancias brand or directly with the supermarket label.
Are you targeting new export markets?
We would like to be in the United States. I have important work to do there, but the scale might not allow us to think about supplying that market. There is still no Argentine sheep meat in the United States. We have to open the market and work with Senasa to formalize the opening. We also want to open markets that pay better because they value the quality and certifications that producers in Patagonia have, like us at Compañía and Ganadera Condor who are certified as organic, or RWS (responsible wool).
Is there potential to develop other types of animals?
There is great potential in the guanaco slaughter. As Famali, we made the first export of guanaco meat to Belgium in 2018 and then we were unable to continue. There is demand in the world for exotic meat.. We need to find the client, but we have to finish coordinating internally in the province and be able to have a plan of work that allows us to continue every year. Today there is no breeding of guanacos in the ranches. It is even a problem for the producers because the sheep stock is decreasing and the guanacos are growing, eating the food that was for them. There are also more political questions about whether it is a native animal, which in some provinces it may be, in others like Santa Cruz there are so many that it can even be considered a plague.
Where is the Benetton green hydrogen project?
Do you have projects outside the company’s core?
We are beginning to study projects that may be important in the future. One is green hydrogen, in the Santa Cruz fields. We are already installing the measurement towers and carrying out complementary studies to see the feasibility of producing it. We are developing it in Cóndor, in Río Gallegos, and in Puerto San Julián, in Santa Cruz. To make green hydrogen, you need some renewable energy, which in this case is wind power because Santa Cruz and the area where we are is one of the best in the world in terms of wind resources to produce energy. Then you need water and a hydrolysis process to separate the molecules, which also exists. We are thinking of a project that is oriented towards the production of green hydrogen, which today is most commonly transformed into ammonia, a raw material for the chemical industry, for fertilizers. The important thing is to do a large-scale project, which can be somewhat disruptive for the province and for the country. Green hydrogen is incipient worldwide, there are still no large-scale projects developed. We are accompanying all of this business development.
How long will it take for the project to be ready?
We estimate that in about two years we could have all the results to see what the final project and scale would be, and then start working on the feasibility and managing it to make it a reality. We are doing it with a partner and it is a project that could be very large, so it may need more than one partner. We have already started to make investments. For example, the measuring towers are already installed, and we also need to do consulting work, which requires investments that we already started this year.
As the company with the largest land area in Argentina, can the business be made more profitable?
There are different situations. Patagonia is one thing and the province of Buenos Aires or the center of the country is another. They are different productivities. In order to be profitable and sustainable, scale is needed, and this is achieved by having been growing because we work with commodities and the price is not controlled. Then, the impacts of the exchange rate delay or the gap and years in which it was much higher than inflation with products denominated in dollars.generates a significant increase in costs due to the payment of services, fuel, salary payments, taxes. This has caused the scale required by a producer to survive to grow in recent years.
