Siemens Plans Record R&D Spending in 2011 to Harness Clean-Energy Demand

Siemens AG, Europe’s largest engineering company, plans to raise spending on research and development to 4.5 billion euros ($6.2 billion) in 2011 as it pours more money into its range of energy-saving equipment.

This year’s budget represents a record when adjusted for disposals, and is a 17 percent increase over last year’s 3.85 billion euros, spokesman Ulrich Eberl said in a Jan. 26 phone interview. The budget for wind-energy products has tripled in the past two years, Rene Umlauft, head of Siemens’s renewable energy division, said in an interview.

Siemens has invested “hundreds of millions” of euros in wind energy since entering the industry with an acquisition in 2004, Umlauft said. The division plans to add at least 2,000 employees to its current 7,000-strong force to help work through a 10 billion-euro backlog.

“We are going to spend a lot of money,” Umlauft said.

The German company, based in Munich, is going head to head with General Electric Co. in the market for turbines, products for the renewable energy industry, and scanners and equipment used in healthcare.

The Fairfield, Connecticut-based company plans to double its R&D spending to about $5 billion this year, with an additional $1 billion in customer-funded R&D development. Expenditure in past years has tracked between $2 billion and $3 billion, it said on Dec. 14.

Siemens, which had a record 15.66 billion euros in cash in its most recent quarter, will focus R&D spending on products for smart grids, controls to make buildings more energy efficient and storage systems for renewable energy, Eberl said. The company has doubled the pace of inventions per R&D worker in the past decade, he said.

Siemens’s industry division, the largest of the three main units by sales, absorbed the largest proportion of last year’s R&D funds, or about 1.7 billion euros, Eberl said.’

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net.

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

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