Smith & Nephew increasing R&D Budget by $300M to focus on BRIC markets
Smith & Nephew saves research spend for emerging markets (The Telegraph) Smith & Nephew, the maker of artifical hips and knees, is to ring-fence a slice of its research spending to develop products for emerging markets as it eyes sales in fast-growing economies.
The FTSE 100 medical devices manufacturer has said it will increase its research and development budget by $300m (£186m) over the next five years and plans to set aside 20pc of this for emerging markets.
The investment comes as Smith & Nephew sharpens its focus on countries such as Brazil, Russia, China and India, with a view to raising sales from these markets to $500m in 2016 from around $170m currently.
Olivier Bohuon, who joined Smith & Nephew as chief executive in April, has made growth in these countries one of his five strategic priorities for the company.
“We have not been doing a lot in emerging markets. We’ve been doing good in China and now have revenues of $100m there. That’s all,” Mr Bohuon told The Sunday Telegraph.
“We have not been in India, in Brazil or in Russia. Those markets are growing double-digit, there is a need for our products out there.” He added that Smith & Nephew needed a group of products, including those at a lower-specification, to enter these markets and capture growth. “We are creating a specific R&D model to be sure that we answer the needs of these emerging markets.”