Backward integration: It involves moving toward the input of the present product. It is aimed at moving lower on the production process so that the firm is able to supply its own raw materials or basic components. For example, a Car manufacturer may start producing tire tubes; Reliance Industries Ltd. has been able to grow largely through backward integration. It started business with textiles and went for backward integration to produce PFY and PSF critical raw materials for textiles, PTA and MEG raw materials for PFY and PSF, propylene raw materials for PTA and MEG, and finally naphtha for producing propylene.
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