The Champions Of The R&D League

One of the most important items in terms of the EU economic criteria is R&D expenditure. In this regard, Turkey’s record is not good at all. Investments in R&D account for 0.7 percent of Gross Domestic Product (GDP). It is not that there are no companies which are not an exception in terms of R&D. The companies which are the leaders of the R&D league are the ones whose success attracts attention in Turkish and global markets. From Şişecam to Ülker, Marshall and Bridgestone, here are the champion companies of the Turkish R&D league.

It has been one of the most striking items on the agenda in recent months… It was a meeting of the Supreme Council for Science and Technology (SCST) which demonstrated how far Turkey lags behind in terms of expenditure on research and development (R&D). Expenditure as a proportion of Gross Domestic Product (GDP) stood at 0.72 percent in the crisis year of 2001 and fell to 0.67 percent in 2002. It was announced that TL 1.292 quadrillion was spent on R&D in 2001 and TL 1.843 quadrillion in 2002. One of the most important decisions taken at this meeting was to increase expenditure on R& D, which lags far behind the rate in many countries.

The decision was taken to increase expenditure to 2 percent of GDP by 2010 starting from 2005. The target is to increase the number of full-time researchers and professional/technical assistants from 27,000 at present to 40,000 in 2010. Even though total R&D expenditure in Turkey is still very low overall, the major companies in particular still make significant investments in R&D. The leading members of the R&D league allocate 1-1.5 percent of their total turnover to R&D.

Şişecam focused on productivity

Şişecam, the giant of the glass sector, is one of the leading investors in R&D. In 2003 the company allocated 1 percent of its turnover of $1.2 billion to R&D, up from $1 billion the previous year. The group has been spending time, labour and money on corporate R&D for 25 years and focuses particularly on the productive use of existing resources.

The group’s main targets for the future have been formulated in line with its ambition to become one of the leading glass producers worldwide and include increasing the number of its inventions and patents and to being a company which grants rather than receives licences.

1.5 percent of turnover at Arçelik

Arçelik is a white goods giant which had turnover of €1.915 billion in 2003 and allocates 1.5 percent of its turnover to R&D each year. The company’s target for 2004 is turnover of €2.4 billion. Arçelik’s R&D agenda is headed by products which are environmentally friendly, have low energy and water consumption, are suitably priced, with low noise levels and easy to use. Arçelik recently established R&D laboratories which focus on experimentation and the measurement of the effects of washing-cooling. Investments have also been made in computer-aided engineering equipment which supports the optimization of designs and ensures the characterization of the materials used in the products.

50 products a year from Ülker

R&D is important to the Ülker Companies Group. These efforts were originally focused on production but later shifted to concentrate on the market. Now they are innovation-oriented. The Ülker Group makes R&D plans in order to launch 50 new products on the market each year. These efforts are one of the most important reasons for growth.

In the past R&D was conducted within the individual companies in the group but a restructuring at the beginning of 2004 brought them all under the Business Development and R&D Group Directorate. The group plans a budget of $18 million for 2004, up from $15 million in 2003.

$1 million investment

Brisa, which manufactures the Bridgestone and Lassa brands, has a capacity of 6 million tyres a year. In 2003 the company used all of this capacity, realised sales with a total value of TL 457 trillion and assigned 1-1.5 percent of its annual sales to R&D. Brisa, which has fixed R&D investments of $20 million, invests $400,000-500,000 in new investments each year.

$13 million in three years

Pharmaceuticals is one of the sectors which invests the most in R&D. This sector is dominated by the leading companies in the world. Turkey’s economic conditions mean that they have to invest a minimum of $400 million in order to produce a new molecule.

Abdi Abraham is one of the leading local pharmaceutical producers. In 2003 it ranked second in the Capital list of the largest companies in Turkey. Abdi Abraham allocated a total budget of $13 million for the period 2003-2005, and spent $5.975 million in 2004. For 2005 it has set a budget of $1.406 million.

1 percent from Siemens Gareth

Siemens A. Ş. is one of the largest electrical-electronics companies in Turkey. In 2003 it had total sales of €472 million. Every year the company allocates an average of 1 percent of its total sales to R&D and uses 30 percent of this budget for investments. In 2004 its R&D budget was the equivalent of 1 percent of its sales. Five years ago it was 0.3 percent and next year it will be 1 percent. In 2003 and 2004 up to 30 percent of its total R&D budget was in investments. These investments include panel production, production management solutions, metered reading systems and dynamic strategic planning systems.

$1 million from Marshall

Marshall Boya also assigns a considerable budget to R&D. The company allocates an average annual budget of €1 million of which the average total investment is €100,000. Marshall Boya R&D Manager Dr. İsmail Yiğinsu says that in 2004 the company’s R&D budget was €1.1 million, compared with €800,000 five years ago. Next year the budget will again be €1.1 million. The company’s investments in R&D totalled €50,000 in 2003. In 2004 its total investments of €192,000 will include paint production and quality control.

The R&D Super League

Firm Size of budget allocated to R&D

Abdi İbrahim In 2004 its R&D budget was US $5,975,000. Next year its budget will be US $1,406,000.

Arçelik Spends approximately 1.5 percent of its turnover on R&D. The company is targeting turnover of €2.4 million in turnover in 2004.

Brisa Has R&D worth US $20 million. Around US $1 million was invested in 2004.

Ford Otosan Its product development budget for 2004 was US $27 million. This is expected to be increased to US $42 million next year.

Marshall Assigns an average annual budget of €1 million. Its budget for 2004 was €1.1 million.

Nortel Networks NetaşAllocates an average of 6-9 percent of its turnover to R&D. Last year spent a total of US $20.8 million.

Profilo Telra Annual expenditure is around US $10-13 million. Spent US $10 million in 2003.

Siemens The company recorded sales of €472 million in 2003 and allocates 1 percent of sales to R&D.

Şişecam The group had an annual turnover of US $1.2 billion in 2003. Allocates 1 percent of its turnover to R&D each year.

Teknoloji HoldingHad a R&D budget of €2.5 million in 2004. Over the last three years the average has been €1.1 million.

Ülker The company had a R&D budget of US $150 million in 2003 and spent around US $180 million on R&D in 2004.

Yeşim Tekstil Allocates 3 percent of its total budget. Invested US $2 million in R&D in 2004.

YASEMİN BALABAN
ybalaban@capital.com.tr