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Issued : Wednesday, November 13, 2013 12:00 AM
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Caribbean Business TOP 400 locally owned companies

Edition: November 14, 2013 | Volume: 41 | No: 44

Total revenues: $26.73 billion in 2012
An increase of $222.9 million over 2011
Direct employment of 136,997 people

Despite the marathon local economic slump, the combined revenue generated by the CARIBBEAN BUSINESS Top 400 Locally Owned Companies in Puerto Rico during 2012 was slightly higher than the previous year.

In 2012, combined revenue of the Top 400 Locally Owned Companies was $26.73 billion, up by $222.9 million, or 0.84%, from 2011, when revenue reached $26.51 billion.

The top locally owned companies provided 136,997 full-time jobs in 2012, a decrease of 5,838 positions, or 4.08%, from 2011.

While the Top 400 companies have suffered the effects of the lingering recession that has beset the island since 2006, the results highlight the valiant efforts of these private companies to keep their businesses moving forward and help the local economy stay afloat.

In fact, given the state of Puerto Rico's economy, now in its seventh year of contraction, the Top 400 companies should be highly commended and admired as the backbone of our economy, and even more for their remarkable achievements in such difficult circumstances.

Their feat is even more remarkable when one considers that during fiscal 2012 (ended June 30), the local economy contracted 0.3%, according to the latest figures from the Puerto Rico Planning Board.

Still, the Top 400 companies showed their resiliency and resolve in finding ways to overcome such hurdles as increased operational costs in a dismal economic scenario, which has been uncertain at best. In 2012, it was again a test of survival for many businesses, but also a period of growth for others.

The CARIBBEAN BUSINESS Top 400 Locally Owned Companies employed 15.06% of full-time jobholders (909,600) and 20.84% of the private-sector workforce (657,200) in 2012. In calculating the number of full-time employees on the Top 400 list, part-time employees were included where applicable (two part-time employees equal one full-time employee).

Companies in the wholesale, insurance, retail, service, healthcare and automobile sectors led the Top 400 list with a combined revenue of $23.41 billion, or 87.57% of the total Top 400 revenue, in 2012.

CARIBBEAN BUSINESS first started to monitor locally owned businesses in 1988, initially as the Top 100. The survey quickly caught on and the following year the Top 200 was born. In 1996, the list grew to the Top 300 and, in 2003, CARIBBEAN BUSINESS created what has continued to be the coveted and prestigious Top 400 list of locally owned businesses.


The Top 400 Locally Owned Companies welcomed 28 newcomers to the list this year, with the highest ranked being San Juan-based Standard Refrigeration Co. (No. 260), with $17.42 million in revenue in 2012. It was followed by Caguas-based JRRA Auto Corp. (No. 280), with revenue of $15.09 million, and Santurce-based Paciv Inc. (No. 282), with $15.05 million.

Other new Top 400 members include Integrated Design Solutions Inc. (No. 298), with $14.06 million in revenue; Sign Engineering Corp. (No. 328), with $11.95 million; Héctor M. Varela Inc. (No. 332), with $11.37 million; Caguas Mechanical Contractor Inc. (No. 333), with $11.36 million; and AMS Construction Managers (No. 335), with $11.15 million.

For the fourth time since the survey began 25 years ago, the largest employer on the CARIBBEAN BUSINESS Top 400 list isn't Popular Inc., the parent company of Banco Popular, which held the No. 1 position in terms of revenue and employment for more than 20 years, from 1988 to 2010.

For the first time, the largest employer on this year's Top 400 list was Genesis Security Services Inc. (No. 69), with 5,553 employees. The security-services company surpassed Grupo HIMA-San Pablo Inc. (No. 6), which has 5,250 full-time employees and was the top employer for the previous three years.

Meanwhile, the top locally owned company in terms of 2012 revenue was insurance firm Triple-S Management Corp., which dethroned perennial leader Popular Inc. for the fourth time, after the financial institution was no longer considered at least 51% locally owned in 2010.

Between Triple-S Management Corp.'s No. 1 position and Puerto Nuevo Security Guard Inc.'s No. 400 spot exist a wide variety of businesses on the list, including auto dealerships and distributors, manufacturers, supermarkets, hospitals, insurance companies, law firms, freight forwarders, general contractors, discount stores, newspapers, security services, universities, CPA firms, pharmaceutical products distributors, travel agencies, construction companies, and many more.

The common denominator is they all have roots in Puerto Rico, with 51% or more local ownership, are managed by local residents and generated revenue of at least $7.64 million in 2012.


Banks used to be one of Puerto Rico's most important economic drivers and a dominant force in the Top 400, occupying the top positions on the list in years past. Today, that is no longer so, as all local financial institutions were knocked out of the Top 400 list starting in 2011 because the largest publicly traded banks were no longer 51% locally owned. These were replaced by savings & loan cooperatives, or co-ops.

The top five locally owned financial institutions, out of the top 10 that make up this segment, produced 67.35% of the financial sector's revenue in the Top 400. These are: Cooperativa de Ahorro y Crédito de Arecibo (No. 165), with $31.88 million; Cooperativa de Ahorro y Crédito de Rincón (No. 176), $29.4 million; Cooperativa de Ahorro y Crédito de Aguada (No. 220), $21.57 million; Cooperativa de Ahorro y Crédito de Vega Alta (No. 237), $20 million; and Banco Cooperativo de Puerto Rico (No. 244), $19.5 million.

Financial institutions accounted for 0.68% of the Top 400's total revenue.

As a group, the top 10 locally owned financial institutions in Puerto Rico amassed $181.64 million in revenue in 2012, down 3.43% from the $188.1 million the group generated the previous year.


While in recent years local auto sales have experienced a roller-coaster ride—from a record high of 144,400 units sold in 2005 to a record low of only 76,477 units in 2009—the local auto industry has had a remarkable comeback since then, remaining a vital component of Puerto Rico's economy.

New-auto sales in 2012 amounted to 102,550 units, up 9.46% from the 93,687 new vehicles sold by local distributors in 2011.

Bella Group (No. 15) leads the automobile companies in the Top 400, with $306.97 million in revenue. It was followed by Auto Grupo (No. 35), with $170 million; Cabrera Inc. (No. 40), with an estimated $155 million; Garage Isla Verde LLC (No. 48), with an estimated $125 million; and Gómez Hermanos Kennedy LLC (No. 57), which rounds out the top five, with $105.97 million.

The remaining top automobile companies are Grupo Felcon (No. 70), with $86.96 million in revenue; Braulio Agosto Motors Inc. (No. 77), with $76.17 million; Autocentro Toyota (Autokirei Inc., No. 82), with $72.01 million; Caguas Expressway Motors Inc. (No. 88), with $68 million; and Alberic Chrysler Dodge Jeep (No. 113), with an estimated $ 49.91 million.

The top 10 automobile companies in the Top 400 produced $1.21 billion in revenue during 2012. The automobile sector accounted for 6.32% of the total revenue of companies on the Top 400 list.

The 29 automobile companies in the Top 400 produced $1.68 billion in revenue in 2012.


Despite tough competition and a challenging economy, the wholesale industry remains strong. The sector accounted for 26.53% of the Top 400 revenue, with $7.09 billion.

There are 63 companies on the list in this category, led by Mayagüez-based oil wholesaler Petrowest Inc. (No. 2), with $1.32 billion in revenue in 2012. It was followed by V. Suárez & Co. (No. 5), with $523million in revenue; Puerto Rico Supplies Group Inc. (No. 8), with$432 million; Plaza Provision Co.(No. 9), with $422 million; and B. Fernández Holding Co. (No. 10),with $418 million.

The top 10 companies that make up this segment generated $4.57 billion in revenue in 2012, or 64.45% of the wholesale sector's total revenue in the Top 400.


Leading the top locally owned retail companies on this year's Top 400 list was Ralph's Food Warehouse Inc. (No. 12), with $365.09 million in revenue. It was followed by Supermercados Mr. Special Inc. (No. 16), with $289.01 million; Supermercados Máximo Inc. (Super- Max, No. 19), with $270 million; Empresas Pitusa (No. 22), with an estimated $245 million; and South American Restaurants Corp. (No. 27), with $201 million.

The top 10 companies that make up this segment generated $2.15 billion in revenue, or 51.8% of the retail sector's total revenue in the Top 400.

Retailers accounted for about 19.5% of companies on the list. The 78 retail companies on the Top 400 list were responsible for $4.15 billion in revenue in 2012.


Unlike other sectors in Puerto Rico, the insurance industry has traditionally been dominated by more than 80% domestic, locally owned companies.

The 11 local insurance companies in the Top 400 produced more than $4.29 billion in revenue in 2012, or 16.07% of the Top 400's total revenue. The local insurance industry employs more than 30,000 people.

Topping the list of insurance companies, as well as the CARIBBEAN BUSINESS Top 400 Locally Owned Companies list, was Triple-S Management Corp., with $2.42 billion in revenue in 2012. It was followed by First Medical Health Plan Inc. (No. 3), with $615.58 million in revenue; Universal Group Inc. (No. 7), with $457.88 million; Cooperativa de Seguros Múltiples de Puerto Rico (No. 23), with $232.44 million; and Cooperativa de Seguros de Vida de Puerto Rico (Cosvi, No. 26), with $209.13 million.

The insurance industry continued to show vigor in the Top 400, as the island's leading insurer, Triple-S Management Corp., took the No. 1 spot this year for the fourth time in a row. The insurance industry placed second in this year's industry rankings, after wholesale.


Once considered the main economic driver on the island for many years, the manufacturing sector may have seen its relevance diminish, yet it continues to be a significant contributor of economic activity.

This year's list is dominated by distilled spirits and beverage makers, as well as food and paint manufacturers.

The 46 manufacturing companies that made this year's Top 400 list generated a combined revenue of $1.51 billion in 2012, or 5.65% of the Top 400 total revenue, accounting for 11.5% of the companies on the list.

Topping the list of manufacturers was Compañía Cervecera de Puerto Rico Inc. (No. 39), with $164.47 million in revenue in 2012. It was followed by Holsum de Puerto Rico Inc. (No. 47), with $132 million in revenue; Destilería Serrallés Inc. (No. 53), with $114.02 million; Goya de Puerto Rico Inc. (No. 66), with an estimated $93.8 million; and Puerto Rico Coffee Roasters LLC (No. 78), with $76 million.

Rounding out the top 10 locally owned manufacturing companies are Pan American Grain Mfg. Co. (No. 86), with $69 million in estimated revenue; Industria Lechera de P.R. Inc. (Indulac, No. 91), with $65.31 million; Lanco Manufacturing Corp. (No. 95), with $63 million; Procesadora Campofresco Inc. (No. 112), with $50 million; and Rovira Biscuit Corp. (No. 124), with $44.3 million.


Empresas Fonalledas Inc. once again occupies the No. 1 slot in the service sector and the No. 13 spot on the Top 400 list. As owner of Plaza Las Américas, the largest shopping center in the Caribbean, and Plaza del Caribe mall in Ponce, revenue for Empresas Fonalledas was estimated at $355 million in 2012, up 8.56% from the estimated $327 million in 2011.

Second in this category was Sistema Universitario Ana G. Méndez Inc. (No. 17), with $284.5 million in revenue for 2012, followed by Universidad Interamericana de Puerto Rico Inc. (No. 20), with $267.32 million; and GFR Media (El Nuevo Día Inc., No. 29), with $195 million.

The top 10 service companies in the Top 400 produced $1.61 billion in revenue in 2012. The service sector accounted for 12.39% of the companies on the Top 400 list.

The 88 service-sector companies in the Top 400 brought in $3.31 billion in revenue in 2012.


For years, the construction industry was one of the pillars of Puerto Rico's economy, with high demand for housing units each year being the main driving force behind the industry. However, the sharp downturn in public infrastructure projects, a stalled housing market coupled with a laborious permit process and the general economic crisis, have hampered what 10 years ago was one of the most thriving industries on the island.

As a result of the steep decline in the number of public- and private-sector construction projects, many local contractors and developers during the past few years have been forced to scale down operations, lay off personnel, reduce working hours and, in some cases, shut down altogether.

This year, the Top 400's construction sector comprised 44 companies with a combined revenue of $1.55 billion in 2012, a 19.2% increase from 2011, with $1.3 billion. Given the tough economic conditions and the competition in this sector, the firms should be recognized for their efforts and results.

Leading the list in the construction sector are Empresas Díaz Inc. (No. 25), with $220.01 million in revenue; Bermúdez, Longo, Díaz- Massó LLC (No. 52), with $117.72 million; Del Valle Group & Affiliates (No. 56), with $106.03 million; Aireko Construction Corp. (No. 62), with $96.87 million; and Las Piedras Construction Inc. (LPC & D Inc., No. 71), with $82.17 million.

Construction companies accounted for 5.82% of the companies on the Top 400 Locally Owned Companies list.


Companies dropped from this year's Top 400 list of locally owned companies include firms in the construction, retail, services, automobile, manufacturing and healthcare sectors.

Companies no longer on the list include AGN Enterprises Inc.; American Parking System Inc.; Atlas Roofing Contractors Inc.; Avant Technologies of P.R. Inc.; Belmec Construction Inc.; Carrión, Laffite & Casellas Inc.; CSA Group Inc.; Delta Dental of P.R. Inc.; Droguería Bayamón (Wholesalers Group); Pharma Bio-Serv P.R. Inc.; Royal Motors Corp.; Star Ready Mix Inc.; Tocars (Auto Nuevo Inc.); and Western Petroleum Enterprises Inc.

The majority of companies shed from the list posted a reduction in revenue below the qualifying amount, closed operations or are no longer locally owned.


Topping the list of the fastest-growing local companies, according to revenue-growth percentage in 2012 compared with the previous year, is Muñoz Holdings Inc., with $32.29 million in revenue (397.53% growth). Standard Refrigeration Co. followed, with $17.42 million in revenue (128.61%); Héctor M. Varela Inc., with $11.37 million (114.53%); Integrated Design Solutions Inc., with $14.06 million (106.46%); and CIC Construction Group SE, with $78.51 million (100.69%).

How companies are ranked

Like the Fortune 500, the CARIBBEAN BUSINESS Top 400 Locally Owned Companies list ranks businesses according to revenue, which is considered a measure of their size.

For more than 85% of the Top 400 companies, revenue means sales, a straightforward indicator reflecting a company's gross income.

Banks and insurance companies use different yardsticks to determine annual revenue. Neither industry lists sales as retailers and manufacturers do. To make sure apples are compared with apples, CARIBBEAN BUSINESS hired public accounting firm Ernst & Young (E&Y) 10 years ago to come up with equivalent revenue measures for select industries, including advertising, financial services and insurance.

E&Y researched each industry represented on the CARIBBEAN BUSINESS list of the largest locally owned companies and provided the sources of income that should be counted as revenue in an attempt to level the playing field for all Top 400 candidates.

For instance, for the past nine years, hospitals have been asked to provide net patient revenue, a more accurate measure of gross income in this industry because it rules out discounts.

The yardstick for insurance companies was also refined to exclude reinsurance businesses. On the insurance industry charts, the total number of premiums written was used as the criterion.

For insurance companies, revenue is defined as net premiums written and income from other sources; other items included in the concept of total revenue are net investment gain or loss and other income.

For banks and credit unions, revenue is equated with total interest and investment income, service fees and gains on loan sales. Advertising agencies report total commissions and fees received.

We are also using other revenue definitions for the following, although some of these industry sectors may not have sufficient entries or revenue to be included in this year's Top 400 list:

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

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

Real estate: Total commissions on real-estate sales or rentals.

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

Insurance brokers: Total commissions from insurance-product sales.

Mortgage companies: Total interest income, commissions, service fees on asset management, investment banking, and advisory and underwriting services.

How the Top 400 are selected

For more than two decades, CARIBBEAN BUSINESS has listed the top locally owned companies in Puerto Rico. Since the first list 25 years ago, the CARIBBEAN BUSINESS Top 100, the rules have remained constant. To be considered, a company must generate revenue of at least $7.64 million, and be at least 51% owned and managed by Puerto Rico residents.

In the past few years, the revenue of the No. 400 company has hovered between $8.7 million and $12 million. This year, the company holding that rank generated $7.64 million in revenue.

Candidate companies must operate in the private sector. Local nonprofit educational organizations have been included in the survey since 1999. Winning a spot among the Top 400 Locally Owned Companies is both competitive and rewarding. Companies that make the list have excelled in business and deserve this recognition.

The selection process began in June with a questionnaire mailed to about 1,000 companies selected from the CARIBBEAN BUSINESS database, industry sources and business information from public databases. Only the 400 largest companies, based on revenue and meeting all other requirements, became part of the final list.

The information from about 500 companies came in by mail, email, fax or telephone. Of those that responded this year, 39 businesses had lower revenue figures than the 400th-ranked company, while another eight didn't meet the list's requisites. Not all company owners volunteer revenue figures. Last year, seven companies closed operations, while no local company merged.

Sometimes, companies are too busy or refuse to disclose their revenue for the year. In cases where a qualifying company doesn't provide this information, an estimate is entered. Estimates are made by researching industry trends, revenues and ratios, consulting business databases and government filings.

Although a last resort, estimating sales of companies that belong on the list is this newspaper's policy.

"If we left out companies because they failed to provide their numbers, for whatever reason, the Top 400 wouldn't be a true list of the top locally owned companies," explained Manuel A. Casiano, CARIBBEAN BUSINESS publisher & editor in chief.

When two candidates tie for a spot, the company with the greater number of employees is listed first.

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