Vertical Integration

Vertical integration is a strategy that allows a company to streamline its operations by taking
direct ownership of various stages of its production process rather than relying on external
contractors or suppliers. A company may achieve vertical integration by acquiring or
establishing its own suppliers, manufacturers, distributors, or retail locations rather than
outsourcing them.

Backward Integration
Backward vertical integration is where a company joins with another that is at a stage before
itself in the supply chain. In other words, it integrates with one of its suppliers.
For example RPG group merger with Harrison Malayalam Ltd. gave it control over rubber, a
major tyre input for Ceat Ltd.

Forward Integration
Forward vertical integration is where one company mergers, acquires or expands with a firm that
is ahead of it in the supply chain. In its most basic form, the supply chain contains the raw
material extractors, the manufacturers, and the retail distributors.
 KEC
Through creation of infrastructure has been the core operation of the Company for over seven
decades. They have vertically integrated their operations through in-house manufacturing of
transmission towers, monopoles, hardware, cables and structures for substation, railways and
solar at their eight state-of-the art tower and cables manufacturing facilities located in India,
Brazil, Mexico and now, Dubai. Adoption of modern technologies and equipment, continued
focus on process innovation and stringent quality assurance has enabled them to deliver superior
products and services across geographies with utmost customer satisfaction, enhancing trust and
credibility amongst our stakeholders.
The merger will create clear operational and financial synergies for the merged entity. KEC
consumes cable products in its current portfolio of project management businesses like
Distribution, Telecom and Railways. The merger will provide in-house capacity for these cable
products which will boost these businesses, thereby furthering KEC on the path to becoming an
integrated infrastructure project management player.
 Ceat
Ceat Tyres has partnered with TyresnMore, a digital platform for purchasing tyres and batteries,
to sell its range of tyres online and provide contact-less fitment services at the doorstep for its
customers in the wake of the coronavirus pandemic.