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Top 300 Becomes The Top 400 Locally Owned Companies

With more small local companies getting bigger, CARIBBEAN BUSINESS expands it’s Top 300 to the Top 400


November 6, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

Top 400 tops the news

CARIBBEAN BUSINESS reaches new milestone in its exclusive November classic

The list of the Top 400 Locally Owned Companies, introduced in this edition, represents another landmark in CARIBBEAN BUSINESS’ recognition of Puerto Rico’s entrepreneurs.

For the past seven years, CARIBBEAN BUSINESS has identified and ranked by revenue the Top 300 Locally Owned Companies, businesses that are dynamic, innovative, and daring. And for seven years before the Top 300, the companies of the largest local entrepreneurs earned a place on the Top 200. A year before the debut of the Top 200, the CARIBBEAN BUSINESS 100, the first listing of Puerto Rico’s largest locally owned companies, was published in 1988.

"The first year we were hard-pressed to identify 100 companies," said Manuel A. Casiano, Casiano Communications chairman & CARIBBEAN BUSINESS editor in chief. "In fact, our biggest locally controlled and based company at that time wasn’t the size company it is today."

In 1988, Popular Inc., owner of Banco Popular de Puerto Rico, had $5.7 billion in assets. Today, the bank holding company Popular Inc. has assets totaling $33.7 billion and Banco Popular North America is the largest Hispanic bank in the U.S.

"The same dynamic of growth has permeated our whole locally owned business community," Casiano said. Even though some local companies aren’t locally owned any longer and don’t qualify for the list, such as Supermercados Amigo with revenue of $500 million, the Puerto Rican entrepreneur keeps growing and new companies are continuously starting up.

The criterion for this list remains the same: A company has to generate revenue of $10 million or more.

CARIBBEAN BUSINESS this year expands its reach to list the Top 400 locally owned companies. As globalization has broadened businesses’ horizons and small companies have become bigger, we have widened our net to capture more of the companies that are working to move Puerto Rico’s economy forward.

Companies on the Top 400 generated $25 billion in total revenue during 2002, an amount equivalent to more than one-third of the island’s gross domestic product (GDP) in fiscal year 2002. As for jobs, the Top 400 companies combined employ 134,541 workers, representing more than 10% of the total work force and about 15% of private-sector jobholders.

The No. 1 company, Popular Inc., has been at the top of the list—previously in the form of its biggest subsidiary Banco Popular de Puerto Rico—since CARIBBEAN BUSINESS presented the CARIBBEAN BUSINESS 100 in 1988. Last year, Popular Inc. posted $2.57 billion in revenue, the ranking criterion for the Top 400. For banks, the equivalent of sales is income from interest, investments, and service fees. For 90% of the companies on the list, sales, also referred to as gross sales, are the revenue standard.

The No. 400 company, construction material supplier A. Oscar Rivera Inc., weighs in with $10.5 million in 2002 sales, a 32% jump from the previous year.

This despite a difficult year in which close to half of the Top 400 saw revenue shrink or remain flat, yet over all register a slight improvement over last year. They keep on keeping on, symbolizing resourcefulness, determination, and an entrepreneurial spirit.

Construction equipment & machinery distributor executive Jose M. Baeza exemplifies that spirit. "Being an entrepreneur takes a lot of determination, a lot of work, a lot of desire, and a lot of guts," said Baeza, president & CEO of GT Corp., a newcomer to the annual list of locally owned companies. "It also takes having a good plan, being focused, and doing today’s work today and tomorrow’s work tomorrow."

GT, short for Gonzalez Trading, is a small company celebrating 40 years and growing. Last year, sales increased 4.5% over 2001 to $15.6 million. "The business climate was very difficult…due to the stagnant construction industry and delays in government-related projects," Baeza said.

He added that the company doesn’t sell the volume of big-ticket items sold by bigger competitors, but it is able to keep a solid established clientele based on its large service operation. "We’ve got a proactive management team that is very aggressive," Baeza said.

Some sectors bucking the downturn

Despite the slumping economy, revenue of 65 companies jumped by 20% or more. Newcomer MMM Healthcare Inc., ranked No. 102, reported an astronomical 2,200% increase in revenue. That’s because MMM is a three-year-old health insurer whose revenue amounted to $2 million in 2001 and $55.6 million in 2002.

"We knew we were going to do well, [but the growth has been] beyond our expectations," said Julio F. Julia, MMM vice president. The company, contracted by Medicare to sell senior citizens a private health plan, attracts customers by adding services that Medicare doesn’t cover, such as a full dental plan, Julia explained. MMM sells seniors a managed-health-oriented plan that is more efficient, allowing for savings for the extras. As the only Medicare contractor in Puerto Rico, MMM has found a growing niche in the health insurance market.

"The over-65 population is the only population that is growing," said Julia. He expects no fewer than 40,000 members by the end of this year, and 70,000 to 75,000 in 2004.

In general, the health insurance sector is flat. Both government and the private sector are looking for ways to cut health plan expenses. Last year, the Calderon administration put restrictions on companies contracted to insure the medically indigent. Businesses, too, are looking to cut health insurance expenses, making for stiff competition in the sector.

Among the fastest-growing companies are construction companies, such as F.J. Construction Co. and Constructora de las Americas Inc., whose revenues can be buoyed by a new project. They can also sink if the flow of projects slows to a standstill. Fast-moving distributors ranged from auto retailers to wholesalers of petroleum derivatives to Mexican eatery Margarita’s Restaurants, the 20th fastest-growing company on the list.

Wholesalers & retailers

Once again, the wholesale and retail sectors dominate the list in number of businesses with 147 companies, or 37% of the total. That breaks down to 19% wholesale and 18% retail. The dividing line between the two sectors has been blurred by the North American Industry Classification System (NAICS), which replaces the Standard Industrial Classification (SIC). Wholesalers, such as cash-and-carrys that operate in a warehouse and sell in bulk, are now classified as retailers if their business is open to walk-in customers, much like any supermarket or department store. Last year, Top 400 wholesalers and retailers combined chalked up $8.24 billion in sales.

The list of locally owned companies has undergone some revision. Supermercados Econo, a local supermarket chain, isn’t considered a single entity belonging to a single owner or a group of shareholders. The stores in the Econo chain have various owners, and some own more than one store. The same principle applies to Supermercados Selectos and Mi Familia. Econo vacates a place at the top.

Last year, Econo appeared in seventh position. Under the revised criteria, several supermarkets in the Econo chain made the Top 400 on their own. Supermercados Facundo earned slot No. 175, Econo Aguas Buenas No. 188, Econo Mega Expresso No. 311, and Econo de Isabela No. 340. Some of these chains are cooperative setups of individually owned stores, which join together primarily to improve their purchasing power to help them compete. But they aren’t a single company that can qualify to be listed.

Supermercados Amigo, which first appeared in the No. 8 slot on the CARIBBEAN BUSINESS 100, is no longer eligible because it is no longer 51% locally owned. Last year, Amigo ranked No. 5 and the world’s largest retailer, Wal-Mart, acquired the Amigo chain for an estimated $225 million.

With the retirement of Amigo and Econo, two companies that placed just outside the top 10 last year broke into it this year. Medical Card System Inc., whose income has been propelled by the Health Reform premiums, moved up to No. 7 from No. 12; and J.F. Montalvo Cash & Carry Inc. went from No. 13 to No. 10.

Climbing into the No. 5 slot with $545 million is V. Suarez & Co., No. 6 on last year’s list. R&G Financial moved up from No. 8 to No. 6. In 1988, R&G came in last on the Top 100.

Puerto Rico’s financial services industry is one of the list’s strengths. Banks and insurance companies make up just 7% of the companies in number of businesses but chalk up 31% of the total revenue generated during 2002, or $7.76 billion—almost two-thirds of that amount generated by the eight banks on the list.

The first four on the Top 400 list—Popular, Triple-S Management Corp., Doral Financial Corp., and First BanCorp—haven’t budged from their positions of last year. In the past 10 years, Puerto Rico’s dynamic financial services industry has captured half the top 10 positions.

Old and new faces

Today, CARIBBEAN BUSINESS, bullish on business, adds 114 companies that weren’t on the list last year. Some of these have been on lists in other years, but the majority are newcomers, such as Advanced Cardiology Center Corp., Atlas Roofing Contractors, Coopertiva de Ahorro & Credito Dr. Manuel Zeno Gandia, Dee Produce Corp., Den Caribbean Inc., Drogueria FMC Distributors Inc., Jaguar of Puerto Rico Inc., King Oil Co., Me Salve Inc., McConnell Valdes, Miguel Casanova Auto, Polytechnic University of Puerto Rico, San Juan Bautista Medical Center, Simed, and Uno Radio Group.

A few companies were dropped from the list because they missed the revenue cut. Others lost a place because they were merged into a larger company. Wholesaler Mendez & Co. acquired Carlos Malave & Co. and insurance broker Saldaña & Associates was sold to global powerhouse March & McLennan Companies Inc.

Others that were on previous year’s lists are back. Among them are hardware / software manufacturer Avant Technologies of Puerto Rico, Cidra Excavation, Junco Steel, Kupey Auto Distributors, Lehigh Press Puerto Rico, Royal Motors, and Western Electric.

About 85% of the companies provided CARIBBEAN BUSINESS with their sales figures, but others refused. However, using a combination of industry sources, government filings, and business databases, CARIBBEAN BUSINESS estimated revenue for 58 companies.

Even companies that filled in the questionnaire told us they were reluctant to give their sales numbers because they dreaded being deluged for donation requests, particularly political contributions. "We like to make noise in our industry, but we don’t want to be seen," said one entrepreneur who declined to provide sales figures and asked not to be named.

Nonetheless, the policy on estimates is clear. "Our position is that a company that we identify with revenue over $10 million has to be listed," said Casiano. "If not, our list is not a true list of the top locally owned companies. If a company won’t supply its revenue, we will use every source possible to estimate the revenue and will identify it as an estimate."

CARIBBEAN BUSINESS ranks companies on the basis of revenue, or sales—a yardstick used by other business publications such as construction trade magazine ENR. For some companies, such as banks and insurance companies, revenue is more complicated than the gross sales reported by retail, wholesale, and manufacturing establishments.

This year, CARIBBEAN BUSINESS refined its definition of sales for insurance companies. "Premiums net of reinsurance" replaces "total premiums written," which includes business sold to reinsurers.

The average revenue for the 400 companies was $62.6 million and the medium gross revenue—the halfway point—was $27.5 million, reported by Sagrado Corazon University. Local nonprofit educational organizations have been included in the survey since 1999. Nonprofit hospitals also figure prominently in the Top 400.

How we define revenue

For more than 90% of the companies on the Top 400 Locally Owned Companies list, revenue means sales, a straightforward item that refers to a company’s gross income.

But 29 companies on the list use a different yardstick for revenue. Neither banks nor insurance companies record sales as retailers and manufacturers do. Indeed, three years ago, CARIBBEAN BUSINESS hired public accounting firm Ernst & Young (E&Y) to come up with an equivalent of revenue for selected industries, including advertising, financial services, and insurance.

E&Y researched each industry represented on CARIBBEAN BUSINESS’ list of the largest locally owned companies and provided the newspaper with the sources of income that should be counted as revenue.

For banks and credit unions, for instance, revenue is equated with total interest and investment income, service fees, and any gain on the sale of loans. Advertising agencies report total commissions and fees received.

This year, we refined the measure of revenue for property and casualty insurers to exclude reinsurance, which is business they cede to reinsurers.

For property & casualty insurers, premiums are defined as "premiums net of reinsurance" instead of "total premiums." Other items included in total revenue are net investment gain or loss and other income. This year, data on most of the insurance companies, including life and disability insurers, was obtained from the Insurance Commissioner’s Office.

Other industries for which E&Y provided revenue definitions include:

Automobile: Total automobile and truck sales, parts sales, income from repair services, income from automobile rentals;

Construction: Total sale of real property and / or income for services rendered (including engineering and construction contracts);

Real estate: Total commissions on sale or rental of real estate; and

Telecommunications: Total sales of services, goods, and / or advertising time.

How they made the list

Winning a place on the CARIBBEAN BUSINESS Top 400 Locally Owned Companies list is both competitive and rewarding. Companies that make the list have excelled in business and deserve this recognition.

The selection process began in July with the mailing of a one-page questionnaire to about 1,100 companies selected from CARIBBEAN BUSINESS’ database, industry sources, and D&B, a worldwide source of business data.

These sources provided the information needed to add qualifying companies to the mailing list. Close to 600 companies responded, either by telephone or fax. Not all company owners volunteer revenue figures. Sometimes they are too busy or they refuse to disclose their gross sales for the year.

In cases in which a qualifying company doesn’t provide this information, an estimate is entered for the company. In the ranking of the Top 400, an asterisk next to the sales amount indicates the number is an estimate.

Estimates are made by researching industry trends and ratios, interviewing industry sources, and consulting D&B databases and government filings. Companies with the highest sales win places on the Top 400. When two candidates tie for a slot, the company with the most employees gets the position.

For a company to qualify for the Top 400, 51% of its shares must be in the hands of residents of Puerto Rico and it must have headquarters here.

A handful of Puerto Rico companies no longer qualify as locally owned. One example is Supermercados Amigo, in the top 10 since the survey’s inception in 1988, because it was acquired in 2002 by Wal-Mart, the world’s biggest retailer. Pavia Health Inc., owner of Pavia Hospital and San Jorge Children’s Hospital, can no longer be considered locally owned because its stateside owner no longer resides in Puerto Rico; Pavia Health is owned by the Orlando-based United Medical Corp. Industrias Avicolas, better known by its brand name Pollos Picu, has a new owner, Venezuelan company Krisma de Puerto Rico.

Supermercados Econo this year drops out of the top 10 because stores that operate under the Econo banner are individually owned. They share a concept, but not ownership of the assets of the individual stores. For purposes of the Top 400, the Puerto Rican supermarket chain isn’t considered a single entity.

Top 10 Companies

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

Popular Inc.: 2,572.00 / 1

Triple-S Management: 1,193.55 / 2

Doral Financial Corp.: 670.99 / 3

First BanCorp: 598.50 / 4

V. Suarez & Co.: 545.00 / 5

R-G Financial Corp.: 480.03 / 6

Medical Card System: 441.17 / 7

W Holding Co. (Westernbank): 385.73 / 8

Empresas Cordero Badillo: 360.00 / 9

J.F. Montalvo Cash & Carry Inc.: 291.64 / 10

Total $7,538.61

Top 400 by Industry

By number of companies

Wholesale 19.25%

Retail 17.50%

Construction 15.25%

Service 15.25%

Automobile 9.25%

Manufacturing 9.25%

Healthcare 6.50%

Insurance 3.75%

Financial Institutions 3.00%

Agriculture 1.00%

Top 10 Employers

Company: No. of Full-Time Employees / Top 400 Ranking

Popular Inc.: 10,960 / 1

Universidad Interamericana de Puerto Rico: 3,258 / 21

Servicios de Salud Episcopales Inc.: 2,643 / 29

Fuller Group: 2,550 / 123

Ranger American of P.R. Inc.: 2,500 / 210

Doral Financial Corp.: 2,161 / 3

Empresas Cordero Badillo: 2,100 / 9

R-G Financial Corp.: 2013 / 6

Sistema Universitario Ana G. Mendez: 1,949 / 44

First BanCorp: 1,897 / 4

Total 32,031

Top Agriculture Companies

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

Procesadora Campofresco: 54.00 / 104

Industria Lechera de Puerto Rico Inc.: 36.93 / 157

Federacion de Asociaciones Pecuarias de P.R. Inc.: 22.01 / 236

Café Rico: 18.73 / 272

Martex Farms S.E.: 10.00 / 406

Total $141.67

Top 10 Automobile Companies

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

Bella International Corp. & Affiliates: 217.15 / 16

Caguas Expressway Motors Inc.: 99.45* / 51

Centrocamiones: 90.55* / 57

Royal Motors Corp.: 87.75* / 61

Autosummit Inc.: 82.63* / 63

Auto Nuevo Inc. / Tocars Inc. an Affiliated Co.: 80.47 / 66

Losada Auto Truck Inc.: 78.60* / 68

Autos Vega Inc.: 76.80 / 69

Braulio Agosto Motors: 73.99 / 74

Garage Isla Verde Inc.: 69.06 / 83

Total: $956.45


Top 10 Financial Institutions

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

Popular Inc.: 2,572.00 / 1

Doral Financial Corp.: 670.99 / 3

First BanCorp: 598.50 / 4

R-G Financial Corp: 480.03 / 6

W Holding Co. (Westernbank): 385.73 / 8

Oriental Financial Group: 172.00 / 25

Eurobancshares Inc. (Eurobank): 58.99 / 93

Bank & Trust of P.R.: 49.01 / 122

Cooperativa de Ahorro y Credito de Arecibo: 28.01 / 196

Cooperativa de Ahorro y Credito de Rincon: 17.35 / 289

Total $5,032.61

Top 10 Manufacturing Companies

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

Mova Pharmaceutical Corp.: 116.39 / 39

Destileria Serralles Inc.: 115.76 / 40

Holsum de Puerto Rico: 103.30 / 46

Goya de Puerto Rico: 100.00* / 50

Empresas Bechara Inc.: 75.00 / 71

Empresas Master: 72.29 / 75

Cerveceria India Inc.: 72.00 / 76

Lausell Inc.: 60.77 / 89

Mill Agro Group Nutrimix Feed Co.: 50.50 / 112

Industrias Vassallo Inc.: 50.00 / 117

Total $816.01


Top 400 Revenue by Industry

In millions & (% by Industry)

Financial Institutions $ 5,060.95 (20%)

Wholesale $4,690.98 (19%)

Retail $3,538.41 (14%)

Insurance $2,694.49 (11%)

Service $2,327.99 (9%)

Construction $2,200.78 (9%)

Automobile $1,797.79 (7%)

Manufacturing $1,482.46 (6%)

Healthcare $1,108.16 (4%)

Agriculture $131.67 (1%)

Locally owned financial institutions total 12 companies, or 3% of the companies on the 2003 list. Their combined revenue equals 20% of the total generated during 2002. Their combined employment is 14% of all Top 400 jobs.

Top 10 Retail Companies

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

Empresas Cordero Badillo: 360.00 / 9

J.F. Montalvo Cash & Carry: 291.64 / 10

Almacenes Pitusa Inc.: 251.13 / 13

Farmacias El Amal: 201.00* / 18Supermercados Mr. Special:199.84 / 20

Empresas Berrios Inc.:127.47 / 35

J. Pica & Cia / Tiendas Capri: 124.75 / 36

Ralph’s Food Warehouse:123.40 / 38

Me Salve Inc.: 106.34* / 43

Supermercados del Este: 92.40 / 53

Total $1,877.97*CARIBBEAN BUSINESS estimate

Among the top 10 companies

Fifteen years ago, Banco Popular de Puerto Rico, A. Cordero Badillo Inc., V. Suarez & Co. Inc., and Seguros de Servicio de Salud placed among the top 10 of the list of 100 (see chart below). In this edition, Banco Popular’s corporate parent Popular Inc. maintains the No. 1 position; Triple-S moves up from No. 4 to No. 2; Cordero Badillo, No. 3 in 1988, holds on to the No. 9 slot; and V. Suarez, No. 4 back then, is No. 5 of the Top 400. Other charts below show the leaders in their sectors.

Top 10 Companies in 1988

Company: 1987 Revenue ($ Millions) / Top 100 Ranking

Banco Popular de P.R.: 450.90 / 1

Bacardi Corp. & Subsidiary: 437.00 / 2

A. Cordero Badillo Inc.: 300.00 / 3

V. Suarez & Co. Inc.: 252.00 / 4

Banco de Ponce: 240.00 / 5

Seguros de Servicio de Salud: 200.70 / 6

B. Fernandez & Hnos.: 200.00 / 7

Supermercados Amigo: 160.00 / 8

La Cruz Azul de P.R. 151.10 / 9

Empresas Villamil: 150.00 / 10

Total $2,090.80

Based on the 1988 Top 100 Locally Owned Companies in P.R.

Top 10 Wholesale Companies

Company: Revenue ($ Millions) / 2002 Top 400 Ranking

V. Suarez & Co.: 545.00 / 5

Plaza Provision Co.: 258.00 / 12

Mendez & Co.: 225.00 / 15

Borschow Hospital & Medical Supplies Inc.: 209.91 / 17

B. Fernandez & Hnos.: 200.00 / 19

Northwestern Selecta Inc.: 186.00 / 22

Packers Provision Co.: 170.50 / 26

Ballester Hermanos Inc.: 165.55* / 27

Puerto Rico Supplies Co.: 157.27 / 31

Drogueria Central Inc.: 153.32* / 32

Total $2,270.55


Top 10 Construction Companies

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

F&R Construction Corp. & Affiliates: 160.58 / 30

Levitt Homes Corp.: 114.00 / 41

Bermudez & Longo S.E.: 102.70 / 48

Empresas Diaz Inc.: 102.07 / 49

Empresas VRM: 96.60 / 52

Aireko Construction Corp.: 92.00 / 54

Rodriguez & Del Valle Inc. & Affiliates: 88.82 / 59

Desarrollos Metropolitanos S.E.: 76.30 / 70

Empresas Ferrer: 70.00 / 81

Hill Construction Corp.: 60.81 / 88

Total $963.88

Top 10 Service Companies

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

Empresas Fonalledas: 266.00 / 11

Universidad Interamericana de P.R.: 186.65 / 21

El Nuevo Dia: 185.86 / 23

Sistema Universitario Ana G. Mendez: 104.16 / 44

Diamond Palace Hotel & Casino: 91.49 / 55

Ramallo Group: 88.85 / 58

Empresas Santana: 62.00 / 86

Instituto de Banca y Comercio: 57.30 / 95

Bithorn Travel Corp.: 55.80 / 101

Regency Caribbean Enterprises Inc.: 51.90 / 110

Total $1,150.01

Top 10 Insurance Companies

Company: 2002 Revenue* ($ Millions) / Top 400 Ranking

Triple-S Management Corp.: 1,193.55 / 2

Medical Card System Inc.: 441.17 / 7

Universal Insurance Group: 245.56 / 14

Cooperativa de Seguros Multiples de Puerto Rico: 175.89 / 24

Asociacion de Suscripcion Conjunta (JUA): 164.92 / 28

Cooperativa de Seguros de Vida de P.R. (Cosvi): 123.58 / 37

Victor J. Salgado & Associates Inc. (Integrand) 69.60 / 82

National Life Insurance Co.: 56.88 / 96

National Insurance Co.: 56.63 / 99

MMM Healthcare Inc.: 55.63 / 102

Total $2,583.41

*For property & casualty insurers, the definition of total revenue has been revised. Premium income is defined as "premiums net of reinsurance" instead of "total premiums."

Top 10 Healthcare Companies

Company: 2002 Revenue ($ Millions) / Top 400 Ranking

Servicios de Salud Episcopales Inc.:162.63 / 29

Hospital Español Auxilio Mutuo de P.R. Inc.: 107.85 / 42

Centro Medico del Turabo: 103.35 / 45

Mennonite General Hospital Inc.: 84.81 / 62

CAS Management Inc.: 71.20 / 77

Hospital Damas Inc.: 59.02 / 92

Ryder Memorial Hospital Inc.:51.29 / 111

Hospital Hnos.: 44.66 / 134

Melendez Doctor’s Center Hospital: 42.90 / 139

Ashford Presbyterian Community Hospital: 41.51 / 140

Total $769.22

This Caribbean Business article appears courtesy of Casiano Communications.
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