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Hispanic-Owned Companies See Strong Growth Spurt
By Jim Hopkins, USA TODAY
July 1, 2003
More Hispanic-owned companies which have historically been tiny ventures are becoming corporate behemoths amid growth of the Hispanic consumer market.
Annual revenue at each of the USA's top 10 Hispanic-owned companies now exceeds $400 million, says Hispanic Business magazine's newest list of the 500 biggest firms. Three years ago, only half had revenue that high. (Chart: The five largest firms owned by Hispanics)
Their growth is boosting:
The overall economy. Although the combined revenue of the 500 biggest dipped 1.7% last year the first such decline in 19 years of the magazine's rankings that was better than the Fortune 500, whose revenue fell 6%.
Hispanic companies outperformed partly because they're better at marketing to Hispanics, one of the few fast-growing consumer niches, says Betsy Zeidman, who studies emerging U.S. markets for the Milken Institute think tank. The Hispanic population surged 9.8% from April 2000, making it the USA's biggest minority group, the Census Bureau recently reported.
Hispanic firms also prospered by diversifying into faster-growing sectors such as technology and away from slow-growth ones like agriculture, Zeidman says. Brightstar, a Miami retailer, distributor and maker of cell phones that was started just six years ago, has soared to No. 2 on Hispanic Business' list. It expects $1.1 billion in annual revenue this year up from $849 million last year mostly from Latin American markets.
The private company launched an investor road show last week with adviser Salomon Smith Barney to raise as much as $70 million for expansion, founder and CEO Marcelo Claure says.
Competition. Non-Hispanic-owned firms expanding into the Hispanic consumer market include Univision Communications, owner of 53 TV stations. It wants to create a Spanish-language media colossus by buying Hispanic Broadcasting, which operates 65 radio stations. That worries Hispanic-controlled Spanish Broadcasting System, which operates 27 stations. It says the merger would reduce competition. The Federal Communications Commission is studying the proposal.
Political clout. The jump in the number of big Hispanic-owned businesses is boosting the financial clout of owners making them targets for campaign fundraising.
Karl Rove, President Bush's top political strategist, told The New Yorker magazine in May that the GOP is looking to "the growing entrepreneurial class, which is increasingly non-white," in politically critical states such as California.