backward integration

Backward Integration

A business model whereby a company takes direct control of how its products are supplied. For example, a company may buy another company that previously supplied its raw material. That is, a butcher may own a ranch so that he does not have to buy slaughtered animals from an outside ranch. Alternatively, backward integration may involve the butcher buying the outside ranch. See also: Forward Integration.

backward integration

see VERTICAL INTEGRATION.

backward integration

the joining together in one firm of two or more successive stages in a vertically related production/ distribution process, with a later stage (for example, bread making) being combined with an earlier stage (for example, flour milling) Backward integration is undertaken to cut costs and secure supplies of inputs. See VERTICAL INTEGRATION, FORWARD INTEGRATION.
References in periodicals archive ?
Our plant is the first of its kind in South East Asia and meets local market needs, supported by strong raw material backward integration, said Dr Sven Crone, Managing Director of BASF PETRONAS Chemicals.
The Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri, after the meeting of Fisheries Committee for the West Central Gulf of Guinea (FCWC), speaks with the Nigerian Tribune on how the government plans to support fish framers in this year's farming season and other developments in the Fishery Sub-Sector, ranging from smuggling, issuance of waivers and backward integration among other issues.
6 value chain through increased polymerization capacities and the backward integration into the key raw material ADN (adipodinitrile).
6 value chain through increased polymerisation capacities and the backward integration into the key raw material ADN (adipodinitrile).
The Dangote Sugar Refinery is developing a sugar backward integration plan through the production of 1.
The backward integration project is another step forward in the company's middle-and-long-term strategy to increase the overall capacity and production at the Bhuj site.
However the Company expects revenues to grow going forward, as the Company has taken steps to counter the raw material related issue by doing backward integration and has successfully set up its additional optical fibre capacity, which will get operational in the early third quarter of financial year," said Satyendra Gupta, Deputy Managing Director at Aksh Optifibre Limited.
According to different integration directions, the vertical integration can be divided into forward integration and backward integration: the forward integration refers to the way of integrating along output direction or product sales direction; and the backward integration refers to the way of integrating along production investment or raw material supply direction.
The Indian government will, for the first time, auction 12 copper reserves over the next year to enable backward integration of the domestic industry.
a move that will help the firm achieve its goal of backward integration into bottle processing for its Repreve recycled fiber product line.
The investors plan to enhance the scope of investment further by investing in the mining of iron ore in Balochistan and in the production of semifinished steel products thus achieving forward integration in the next three years and backward integration in four years as it involves investment in parts of Baluchistan where law and situation is not exemplary.
downstream activities and intends to further strengthen its backward integration.

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