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Against All Odds


November 4, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

Thank God, it’s over.

Although by press time, Monday people were yet to go to the polls, one thing was already clear: Last Tuesday’s elections marked the end of the four-year political cycle, and it’s time now for winners and losers, businesses and consumers, employers and employees, and indeed for all in Puerto Rico to redirect our attention to and refocus our energies on the never-ending challenges of growing our businesses and strengthening our economy.

And what better way to start than by taking stock of the stellar performance our Top 400 locally owned companies had in 2003! Shunning skyrocketing oil prices, war jitters, and a slow economy both here and on the mainland, the 400 largest locally owned companies posted total revenue of $27.5 billion in 2003, a remarkable 10% growth in comparison with the previous year.

Last year, when CARIBBEAN BUSINESS expanded its annual November classic to include 400 companies, up 100 from the 300 we had been surveying for the previous seven years, the group had posted total 2002 revenue of $25 billion.

Nearly three-fourths of the Top 400 companies saw revenue increase during 2003, and 84 of them reported that gross income rose by more than 15%. That’s a significant improvement over 2002, when roughly half of the Top 400 had seen their revenue shrink or remain flat, and an even better performance over 2001, when an even greater proportion of the list—then only 300 companies—had seen their revenue decrease.

The point is that even though the economy is nowhere near where we would like to see it, there’s no question it has been improving little by little in the past couple of years.

Granted, a good chunk of the total growth in revenue was due to the stellar performances of certain industries, most notably the banking industry, which continued to benefit from the still-prevailing low interest rates. For example, just 11 banks on the list represented 20% of the aggregate revenue of the Top 400.

Meanwhile, the largest industry group on the list, comprising 78 wholesalers and distributors, accounted for 19% of the total, and 71 retailers contributed another 14%. Those three industries—banking, wholesale, and retail—accounted for 53% of the total revenue.

The rest of the list is made up of a variety of industries, a veritable cross section of Puerto Rico’s economy, including auto dealerships, hospitals, advertising agencies, media, insurance companies, residential developers, general contractors, and others.

All told, these companies employ 149,923 people, approximately 12% of all jobholders in Puerto Rico and 15% of the private-sector work force on the island.

As in every edition since CARIBBEAN BUSINESS started the list 17 years ago as the Top 100, every company on the Top 400 is at least 51% owned by local residents. On this year’s list, no company grossed less than $11 million in revenue.

As the new administration takes the reins of government on the island, they would be well-reminded that on the campaign trail they made many promises of what they would do, if elected, to foster Puerto Rico’s economic development.

Unlike companies that are aggressively courted by government to establish themselves in Puerto Rico, locally owned businesses don’t get nearly as many incentives. Yet, they are the backbone of our economy, the ones that when the going gets rough stay here, struggling on and providing jobs, because their roots are planted on this island.

Our recently elected officials ought to take a hard look at the needs of locally owned businesses so these can continue to grow healthy.

This Caribbean Business article appears courtesy of Casiano Communications.
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