Regenerating a region’s economy and ecology
Ledesma’s importance to the remote region of Jujuy in the north of Argentina can hardly be overstated. The town of Libertador General San Martin (formerly known as Ledesma) has grown up around the company’s activities over the last century and remains by far the biggest employer for a community of over 45,000 people. But through a combination of factors, the future for Ledesma, and therefore the regional economy and environment, was looking increasingly bleak.
A complex social and economic ecosystem
Ledesma operates in the agribusiness and food sectors. With over 8,000 employees, it operates across 200,000ha, producing a diversity of crops and managing a variety of associated industrial facilities. Through NGO partnerships, it also manages over 100,000ha of highly biodiverse primary forest in this remote region, and north of Buenos Aires.
Water captured in the mountains around Jujuy is used to irrigate 40,000ha of sugarcane and 3,000ha of citrus trees. The water also services the sugar mill and paper factory, as well as the bioethanol, fruit-packaging, juicing and aromatic oil facilities. There is a natural interaction between the various resources and associated processes, and Ledesma is constantly looking for ways to innovate so it can add value to sub-products, minimizing waste and maximizing circularity.
Ledesma also manages 50,000ha of integrated grain and livestock operations in the center of the country in the Provinces of Buenos Aires and Entre Ríos. Through natural conservation practices and largely biomass-based energy production, the company’s overall operations are carbon negative.
A region’s future threatened
Like the town, Ledesma’s operations and practices have evolved organically over the decades. This has occurred independently within each operation, largely in response to local environmental, social and safety standards, which tend to be less stringent than international ones. Management practices are highly dependent on the knowhow of individuals, who are challenged to comply with increasingly complex national and international standards in a region with very high biodiversity value and increasing social demands.
There was also ground for improvement in various areas, from unsafe working conditions in the sugar mill to accident prevention, with heavy goods vehicles passing through the tight town center.
Lower emissions, higher standards, a brighter future
In 2019, together with the Rabobank, we invested US$90 million in Ledesma. The main goal was to enable the company to increase the overall efficiency of its operations, while also improving its environmental and social performance.
Ledesma plans to reduce from three to two sugar mills, while also making improvements to its power and steam generation facilities. This will reduce energy consumption and associated emissions. At the same time, it plans to mechanize its sugarcane harvesting operations, increase the use of drip irrigation, and increase the proportion of energy and power generated through biomass, thus reducing natural gas consumption.
We are also helping Ledesma improve its environmental and social management systems, applying international standards and with a particular focus on biodiversity management across both its 100,000ha of natural land and 100,000ha of farming operations. Ledesma is also addressing accident risk, for example by recently opening a logistics center a kilometer outside Libertador General San Martin.
Together with Ledesma and national researchers, we are looking into co-funding research into greenhouse gas emissions from Ledesma’s grain and livestock operations. The aim is to identify the most appropriate local regenerative agriculture solutions. These carbon-neutral or negative solutions can then be applied regionally. Indeed, if the results are sufficiently positive, there is a hope they may even be the blueprint for regenerative agriculture across Argentina, generating carbon credits for the country while combating climate change for the planet.