The biggest get bigger: Despite a sharp drop in business in the last two months of the year, 2000 was still a banner year for local companies.
One would be hard pressed to find anyone who did not agree that towards the end of the year 2000, the economy both here and on the U.S. mainland began showing signs of a slowdown. In late November and December, it fell off a cliff. Following almost a decade of heightened economic activity, suddenly growth wasn’t what it used to be and companies began cutting back, especially in jobs.
What has been occurring since the latter part of 2000 holds true for CARIBBEAN BUSINESS’ Top 300 Locally Owned Companies (Top 300), considered a snapshot of Puerto Rico’s economy. Combined, in 2000 the Top 300 still grew, posting $21.4 billion in revenue, a 5.9% increase over the $20.2 billion reported in 1999. The percentage growth in 1999 was 6.3%. Meanwhile, total employment among the Top 300 decreased by 8% to 113,700 from 123,600 posted the prior year.
Breaking marks
If there has been a constant in the Top 300 since the list was first compiled in 1989, it is Popular Inc.’s lock on the No. 1 spot. In 2000, the bank holding company—parent to Banco Popular, Popular Auto, Popular Mortgage, Popular Finance, among others—continued its ascent, from $2.2 billion in revenue in 1999 to $2.6 billion last year. Single handedly, Popular Inc.’s 2000 revenue accounted for 12.1% of the total revenue for the 300 companies combined. Popular Inc. is the only locally owned company in the Fortune 1,000 list of biggest companies in the U.S., ranked No. 571. Its operations include subsidiaries in Hispanic markets on the U.S. mainland and other financial subsidiaries with a presence in most states.
Three others—Supermercados Amigo Inc. (No. 3), First BanCorp (No. 4), and V. Suarez & Co. (No. 5)—surpassed the $500 million mark in revenues for the first time in 2000.
New companies: 27
This year, the CARIBBEAN BUSINESS Research Department again expanded its efforts to find new companies that could qualify for inclusion in its Top 300 ranking. Company information was gathered not only from the publication’s database, but also from industry charts, articles, and Dun & Bradstreet, which compiles financial data on companies in Puerto Rico.
As a result, 27 new companies debuted on this year’s Top 300 list, including health insurance company Medical Card System (MCS) Inc. (No. 32); Doctors Center Hospital (No. 78); clothing outlet retailer and wholesaler Komodidad Distributors, d/b/a Gatsby (No. 119); Euro Caribe Packing Co. (No. 261); architectural firm Jimenez & Rodriguez Barcelo (No. 292); Clendo Reference Lab (No. 295); and Lehigh Press P.R. (No. 300).
MCS, the highest-ranking newcomer, generated $141.9 million in revenue in 2000, for an impressive 63.6% increase in revenue over the $57.4 million reported for 1999. This increase was the result of MCS winning two of the four regions bid out to health insurance companies under the government’s health reform. Between its private and health reform contracts, MCS now insures 250,000 individuals.
Other companies—while not on the 1999 Top 300 list—are not new to the Top 300, having ranked in other editions of the Top 300. These include electrical products manufacturer and ceramic tile distributor Basic Industries (No. 208), for which an estimate could not be calculated last year in the absence of company-provided information; Caparra Motor Service, d/b/a Target Rent-a-Car System (No. 221), which missed the cut in 2000 after posting $9.1 million in revenue in 1999; chemical distributor Sachs Chemical (No. 278); credit union Cooperativa de Ahorro & Credito de Isabela (No. 299), which generated $10.1 million in 1999; and Empresas Berrios (No. 36).
After appearing several years as a Top 300 company, Empresas Berrios, d/b/a Mueblerias Berrios Inc. ceased to appear when Virginia-based Heilig Meyers Co. (NYSE:HMY) acquired it in 1995 for an estimated $100 million. This made Empresas Berrios ineligible for inclusion in the Top 300 as it was no longer 51% locally owned. But following five years of operations under Heilig Meyers, the company’s former owner, Florencio Berrios, decided to buy it back in 2000 for an estimated $125 million. The furniture chain has more than 30 stores and employs 678.
Farewell to 27 companies
Acquisitions, reductions in operations, reorganizations, closings, and decreased revenues were responsible for the "departure" of some former Top 300 companies.
Food and beverage distributor V. Suarez & Co. (No. 5) acquired Cadierno Corp. in July 2000 for an undisclosed amount. With the acquisition, V. Suarez increased its wine sales market share from 17% to 35%, and added product lines such as Equal, Casera, Carmela, and Festival to its portfolio. Founded in 1978, Cadierno was generating more than $55 million annually and had 125 employees at the time of the sale.
Meanwhile, Able Sales (No. 42) acquired candy wholesaler Ponce Candy Industries, ranked No. 215 last year, based on 1999 revenue of approximately $20 million. Able has also been in the news this year, when the company presented a plan in answer to the House of Representatives’ Bill 1052, which sought to restructure the Mercedita sugar refinery. Able proposed taking over the refinery.
Another former Top 300 company—health insurer Plan de Salud Federacion de Maestros de P.R.—made headlines last year when Insurance Commissioner Fermin Contreras ordered its liquidation. The company, which insured some 50,000 policyholders, had trouble paying back approximately $16 million in debt. Founded in 1986, Federacion ranked No. 52 on the Top 300 according to 1999 revenue. Progresso J.R. Cash & Carry, another former Top 300 company, also shut down operations.
Not making the $11.0 million level, where the Top 300 bottomed were Empresas Tito Castro Inc., Induchem Environmental Services Inc., RC Engineering, Roof Decks of Puerto Rico Inc., and law firm Cancio, Nadal, Rivera, Diaz & Berrios, which posted $9.5 million in revenue.
Other former Top 300 companies such as Alberic Colon Auto Sales, Ballester Hermanos Inc., Kress Stores of P.R., La Esquina Famosa, Marvel Specialties, Miramar Construction, Rendic Enterprises Inc., Tiendas Madison, Mascaro Porter & Co., Empresas Ferrer, and Empresas Catalino Sanchez failed to answer the Top 300 questionnaire. In these cases, CARIBBEAN BUSINESS decided to forego estimates due to insufficient company information.
Wholesale dominates
Each Top 300 company was identified by one of 12 categories: advertising, agriculture, automobile, construction, financial institutions, healthcare, insurance, manufacturing, real estate, retail, service, and wholesale.
Of these categories, wholesale once again dominated in number of companies, with 68 or 22.7% of the Top 300 companies. Service followed with 47 companies or 15.7%; retail had 42 companies or 14%; construction had 41 companies or 13.7%; manufacturing had 30 companies or 10%; automobile had 22 companies or 7.3%; healthcare had 17 companies or 5.7%; and financial institutions and insurance each had 13 companies or 4.3%.
In terms of revenue, the top category was financial institutions, with $4.6 billion or 21.3% of the total revenue for all Top 300 companies combined. Wholesale follows, with $3.9 billion or 18.2% of the total; retail, $3.4 billion or 15.9%; insurance, $2 billion or 9.4%; service, $1.9 billion or 8.9%; construction, $1.7 billion or 7.9%; manufacturing, $1.3 billion or 6%; healthcare, $1.2 billion or 5.8%; and automobile, $1.1 billion or 5.4%.
