“Taste our honey and spot the difference. Or the cheese balls, or even the jams,” said the exuberant representative at the Aditya Birla More counter. “Our R&D teams have fine-tuned even the tastemakers in our noodles offerings.”
The $30-billion Aditya Birla Group is spending substantial sums to incubate and innovate formulations at the sprawling Aditya Birla Science and Technology Company (ABSTC). These are then sold as private labels in their More retail stores. So, next time you buy Feasters Tangy Orange or strawberry jam or masala rings, remember it’s not just a label change. The Birlas have created a global R&D team that actually makes these in-house. Based on specifications, the third-party vendors manufacture these for the stores nationwide.
It’s not just food or personal care. Did you know, the scientists at ABSTC are patenting a unique value-added fibre that retains freshness, even after many washes? “There is a reservoir in the fabric which stores the active ingredients like mosquito repellants or anti-bacterial elements,” says Luca Fontana, chief executive, ABSTC.
So, don’t be surprised if in a few summers, you see Allen Solly or Van Heusen introducing a fashion line of shirts or suits with such features.
With Rs 250 crore already pumped in by its five key group shareholders —Hindalco, Grasim, Aditya Birla Nuvo, Ultratech, Grasim and Aditya Birla Retail — ABSTC has now reached the inflection point. After six years of incubation, the 20-acre group R&D centre was officially launched near Mumbai on Saturday.
Kumar Mangalam Birla, chairman, Aditya Birla Group, said, “It places us among a very select group of Indian corporations their have their own full-fledged R&D centres. This would be the hub of our global R&D network, supplementing the R&D footprint, which 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 can’t always get the best available technology; and third and most important, only by actively developing our own technology will we create institutional knowledge that sets us apart from the pack.”
“The concept of a corporate technology centre is unique for any Indian business conglomerate,” says Rajiv Dube, director of the corporate R&D centre. Dube, a key Tata Motors hand till a few years earlier, moved to the Aditya Birla Group and is one of the spearheads of this initiative.
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ABSTC would be the hub of the group’s R&D network, inclusive of Novelis and Colombian Tech centres in North America, the Thai Chemical Epoxy R&D centre in Rayong, Thailand, the pulp Laboratories of Domsjo in Sweden, and several others. The R&D team has already filed more than 55 patents filings and has over 50 active initiatives.
The business payoffs of the R&D efforts have already started to kick in. These have also been key to creating consumer products such as Kara, environment-friendly urea, innovative metal alloys, particulate aluminum matrix nano-composites, fibre cement blends and geopolymers.
At Hindalco, Renukoot, a new energy saving bus-bar design for the smelting pot, has been brought about by combining ABSTC’s expertise in advanced simulation technology with Hindalco’s technical know-how in aluminum smelting. This design is expected to save over three per cent smelting energy per tonne of aluminum produced. Even in new forays like solar energy or wind, these central R&D scientists pool helped in developing the correct technology. So far, the R&D centre has concentrated on processes and innovations around the manufacturing eco-system of the group. However, going forward, these would be commercially available for others from non-competing industries, albeit for a fee.
“We are already providing testing facilities for a few pharma companies. These are largely overseas customers and companies which do not wish to invest in R&D facilities here. They come to us,” said Luca Fontana, chief executive, ABSTC.
ABSTC would also add telecom and financial services, new forays for the group, in its R&D umbrella for a more holistic approach to innovation endeavours. The group would spend at least one to three per cent of the turnover of these manufacturing businesses in research. “That’s the global practice. We, too, want to get there as soon as possible,” feels Fontana. Eventually, the aim is to dedicate 20 per cent of resources to future growth areas relevant to the Aditya Birla Group.
India’s R&D spend is only 0.7 per cent of its gross domestic product (GDP). The comparable figures are 2.8 per cent of GDP in the US and 1.4 per cent of GDP in China. As of now, ABSTC’s R&D centre has over 100 scientists and engineers.