Birla group launches Rs250-cr R&D centre

The Aditya Birla Group on Saturday launched its integrated research & development centre, the Aditya Birla Science & Technology Centre (ABSTC) at Taloja, Navi Mumbai, and said the group would increase R&D spending to 1 per cent of its turnover in the coming years.

Speaking at a launch of the Rs250-crore centre, group chairman Kumar Mangalam Birla said the centre would be ''the hub of the group's global R&D network, supplementing the R&D footprint that already exists within our businesses''.

''We cannot depend only on sourcing technology and know-how through collaborations or licensing agreements for three important reasons. First, licensing technology is expensive; second, licensees cannot always get the best available technology; and third and most important, only by actively developing our technology will we create the institutional knowledge that sets us apart from the pack.''

The new centre will be the hub of the R&D network of the group, with interests from aluminium to retail. The network includes the Novelis and Colombian Tech Centre in North America, the Thai Chemical Epoxy Centre in Thailand, and pulp laboratories in Sweden and several others.

Aditya Birla Science & Technology Company will help companies in the group, with interests from aluminium to retail, to reduce dependence on licensed technologies, and also put the group in a select category of domestic conglomerates having dedicated R&D verticals, Aditya Birla Group chairman Kumar Mangalam Birla said.

The group's chief technology officer Luca Fontana did not reveal what the group spends on R&D currently, but conceded that it is way below one per cent. He 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 the group's revenues, spend 1 to 3 per cent of their overall revenues on R&D.

He added that the spending 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.