Argentina's Ledesma Agroindustrial Complex Celebrates a Century of Success, a Feature of "Navigating the Currents of Change" on Industrialinfo.com

---

Español

Researched by Industrial Info Resources (Sugar Land, Texas)--Ledesma Sociedad Anónima Agrícola Industrial (BUE:LEDE) (Buenos Aires, Argentina), Argentina's largest sugar producer, is a model of stability and one of the few large Argentine companies that has remained in Argentine hands since being founded in 1908.

Ledesma is a diversified company that, in addition to sugar, produces and sells cereals, meats, avocados, fruits (citrus and mangos), fruit juices, paper products and electricity. These activities are closely related to its original business as a sugarcane grower and sugar producer. The company, through a joint venture with Aguaragüe UTE, also participates in oil and gas exploration, and the exploitation of the Aguaragüe oilfields.

The Ledesma agroindustrial facility is located in the Jujuy province. The complex produces about 377,000 tons of sugar per year, which is about one-fifth of the sugar produced in Argentina, and approximately 40% of the paper consumed in the country. For additional information, see January 20, 2010, article - Sugar Industry Will Play Major Role in Global Energy Market, a "Navigating the Currents of Change" Webcast on Industrialinfo.com.

According to Federico Gatti, Ledesma's administrative manager, the key to the company's success is its vertical and horizontal integration, self-financing and the use of best technologies. The company is distinguished for its use of best practices, high efficiency and environmental friendliness. Gatti emphasized that Ledesma's growth would not have been possible without a long-term vision throughout three generations that invested in technology and introduced a limited diversification that added synergy to the company's activities. These actions provided slow, but steady and solid, growth for the company.

Industrial Info asked Mr. Gatti about the role that the sugar industry plays in Argentina and about the potential increase of the sugarcane harvest. Gatti explained that, compared to Brazil, Argentina's sugarcane output is forecast to grow moderately, but the initiation of the government's ethanol program in early 2010 will likely divert a growing volume of sugarcane into ethanol production.

Because of the severe drought that occurred in 2009, the general condition of the current crop is not optimal. Currently, cane-cultivated areas in Salta and Jujuy are in good condition. However, in Tucuman the cane fields lack uniformity: Some are fields in very good condition, while others are not. Argentine mills normally begin the harvest season between mid-May and early June. However, the 2010 crop season began earlier, because sugar stocks are currently very low and processors preferred to start harvesting earlier--although yields were considerably lower-- rather than importing significant volumes of sugar.

Most of the Argentine sugarcane producers obtain an average of 70 tons of cane per hectare, but several studies indicate that the potential is about 350 tons of cane per hectare if new biotechnology developments were introduced into the process. Gatti said that Ledesma, in conjunction with Tabacal Agroindustria (Buenos Aires), is researching different types of cane that are better adapted to weather and geological conditions in the country. Gatti explained that the research is related to the necessity of supplying the domestic market, which may be affected by ethanol production.

The company is also participating in the National Biofuels Program, for which a dehydration unit is being installed. The unit will become operational on October 1, 2010, and will have a production capacity of 100 million liters of fuel ethanol per year. Maguin SAS (Charmes, France) is providing engineering, construction and procurement services for the project.

Mr. Gatti said that Ledesma is part of a wet-milling industry joint venture with Cargill Incorporated (Minneapolis, Minnesota) to produce starches, glucose syrups, fructose, maltodextrin, supplies for the food industry, paper, pharmaceuticals and cosmetics. Ledesma will own 70% of the new company and will construct a 120,000-ton maize mill at Villa Mercedes (San Luis, Argentina). Cargill will be the owner of the remaining 30% and will invest approximately $34 million to expand and optimize the facilities at the mill.

The complex is also investing significantly in its pulp-production area. Approximately $20 million has been allocated to the installment of a new black liquor recovery boiler, which is expected to become operational in the second quarter of 2011. The company has also awarded Metso Oyj (HEL:MEO1V) (Helsinki, Finland) a contract to replace some of the washers in the wet-end pulp process area.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.