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Sabic to Boost R&D Spending, Supplementing Takeovers

(Corrects figure in first paragraph in story published Jan. 26.)

Saudi Basic Industries Corp. plans to increase its spending on innovation and developing new products in-house to about $800 million annually, supplementing any diversification through acquisitions.

Over the next few years, spending on research and development will grow to more than 2 percent of sales from 1 percent currently, said Abdularahman al Ubaid, executive vice president of technology and innovation. The company reported sales of 150 billion riyals ($40 billion) last year.

Sabic, which last year bought General Electric Co.’s plastics unit for $11.6 billion, remains open to acquisition opportunities, the executive said. The company is building large R&D centers in India, China and Saudi Arabia. The move highlights Sabic’s aim to move beyond petrochemicals into more value-added products, in a challenge to BASF SE and Dow Chemical Co.

“It is not smart to invent everything in-house,” al Ubaid said in an interview in Dubai today. “Go and get the best knowledge and information around and use it. If there is an opportunity, we will study it,”

To contact the reporter on this story: Tamara Walid in Abu Dhabi at twalid@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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