DLG secures deforestation-free soy with significant investment in Argentina

Greater transparency in complicated value chains and security of supply of segregated soy. These are some of the strongest reasons why DLG Group invests a large double-digit million amount (DKK) in the Argentine soy mill, Entre Ríos Crushing S.A. (ERCSA), which is located in the northeastern part of Argentina. 

Group COO at DLG, Jesper Pagh, says:  

"For several years, we have successfully aimed to ensure a stable supply of verified and deforestation-free produced soy based on the principle of mass balance. With the co-ownership of ERCSA, we are taking the next important step towards the supply of segregated soy, where we achieve full transparency in the value chain from the soy farmer in Argentina to the livestock producers in the Northern European market." 

Mass balance means that certified soy is mixed with conventional, whereas segregated soy is kept separate. The soya beans that ERCSA will process are also non-GM products for which there is a demand in most of Northern Europe. 

The investment is made in a strategic partnership with the Argentine agricultural cooperative, ACA, and is thus also the beginning of a transatlantic cooperation between the two parties. The ownership of ERCSA is now divided with DLG and ACA as the main shareholders, while the company behind ERCSA is a minority owner. 

It is a collaboration and a new partnership that Jesper Pagh is looking forward to.  

"In recent years, we have had close contact with ACA, which is an organization that is built on a similar foundation as DLG. Despite cultural differences and long distances, there are many common denominators, and we see this investment as a starting point for a close partnership in the future," says Jesper Pagh. 

Soy is an important source of protein in livestock production, but soy production has been the subject of much debate over the years, as in certain areas, primarily in Brazil, it is grown on deforested areas. From 1 January 2025, an EU regulation will enter into force where importers must document deforestation-free value chains. 

"Although we have invested heavily in other protein sources such as biorefining of grass and insect proteins, the import of soy will remain in the future. Therefore, it is important for us to be able to ensure a stable supply of non-GM segregated soy to our owners and customers. This is also an important step in accommodating new EU legislation in the area," says Jesper Pagh.

Every year, Denmark imports around 1.6 million tonnes of soy, the vast majority of which comes from South America. This is also where DLG's primary imports of soy originate.