Rob Zenilman submits: In today's Wall Street Journal, Timothy Aeppel's article A Hot Commodities Market Spurs Buying Spree by Manufacturers details how high commodity prices are driving a wave of vertical integration - companies buying their suppliers in an attempt to control their raw material costs. Examples include:
- Armored car & bullet-proof vest maker Armor Holding (AH) recently bought Integrated Textile Systems, its supplier of super-strong fibers.
- Mittal Steel (NYSE:MT), the world's largest steelmaker is aiming to to be mostly self-sufficient in iron-ore by 2010.
- Russian steelmaker Novolipetsk Steel wants to be totally self-sufficient in raw materials.
- Japan tire manufacturer Bridgestone (OTCPK:BRDCY) purchased an Indonesian rubber plantation, and is investing in plants for other raw materials it uses.
- In order to ensure a reliable supply of batteries for its popular hybrids, Toyota (NYSE:TM) has taken a controlling interest in its main supplier for that product.