Aditya Birla Group to increase R&D spend to 1% of revenues

MUMBAI: The $35 billion Aditya Birla Group is scaling up research and development spend to 1 per cent of its annual revenues, a top official said.

Companies in the Kumar Mangalam Birla-led conglomerate, which has interests ranging from aluminium to retail, will up R&D spends to 1 per cent, the group's chief technology officer Luca Fontana told reporters over the weekend.

Without revealing the R&D spends currently, Fontana conceded that it is way below one per cent, and also declined to give a timeframe for reaching the one per cent level.

Fontana said companies in Europe and North America, which contribute significantly to group revenues, spend 1 to 3 per cent of their overall revenues on R&D.

He added that the spends would vary from company to company within the group, depending on research-intensiveness of the sectors they operate in.

A jump to one per cent R&D allocation will put the group in sync with global practises, he added.

The Group yesterday formally launched a dedicated R&D centre -- Aditya Birla Science & Technology Company (ABSTC) -- developed at a cost of Rs 250 crore to handle research for the group companies in an integrated manner.

Over 55 patents have already been filed by the ABSTC since its inception in 2006, he said. It employs 100 people at present, of which 50 have done doctorates.