Like fine wine, the IW 1000 list improves with age. During the 10 years that we have been tracking the world's biggest manufacturers by revenue, IndustryWeek also has been refining its process.
For example, the most glaring contrast when comparing the 1996 list with this year's list is an extreme increase in the number of oil companies -- from 24 to 96. Additionally, of the 96 companies in the Petroleum & Coal Products industry, Royal Dutch/Shell Group, Exxon Mobil Corp. and BP plc comprise the top three companies respectively on the list, with another 19 companies making it in the top 100. This makes sense in a post-Sept. 11 world, but the real reason for the change is that the inaugural year of the IW 1000 list noted that because integrated oil companies are inconsistent in how they report the revenues they derive from exploration and refining activities, those companies deriving a major portion of their revenues from such activities were excluded. Only those oil companies that were engaged primarily in refining and production of petroleum and petroleum products were included. In 1997
IndustryWeek added oil companies that derived approximately 50% of their revenues from the refining of oil and gas products; and companies that derive approximately 50% of their revenues from the manufacture of mined materials.
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While the previous lists were not wrong -- quite the contrary -- they needed adjustments to enhance the robust universe that is manufacturing. And like wine, there are myriad varieties and categories.
The Basics
Collectively, the IW 1000 companies reported $12.21 trillion in total revenues, up nearly 14% from last year. In that $12 trillion purse, 13 companies topped the $100 billion revenue mark, with Royal Dutch/Shell Group (No. 1) leading the pack with $337.5 billion in revenue and Siemens AG (No. 13) posting $101.8 billion in revenue.
In 1996 only two companies topped the $100 billion mark -- General Motors ($168.8 billion in 1996; $193.5 billion in 2005) and Ford Motor Co. ($137.1 billion in 1996; $171.7 billion in 2005.) Again, keep in mind the first list did not include all oil companies.
It is interesting to note that five of the companies that appeared in the Top 10 on 1996's list also appear in the Top 10 in 2005: General Motors (No 1., 1996; No. 4, 2005), DaimlerChrysler AG -- Daimler-Benz AG back then -- (No. 7, 1996; No. 5, 2005), Ford Motor (No. 2, 1996; No. 6, 2005), Toyota Motor (No. 3, 1996; No. 7, 2005), and General Electric Co. (No. 8, 1996; No. 10, 2005).
From Around The Globe
Much like the first list, the number of companies in the U.S. (323 in 1996, 313 in 2005) and Japan (244 in 1996, 227 in 2005) dominate the IW 1000. The UK (74 in 1996, 52 in 2005), Germany (47 in 1996, 45 in 2005), and France (57 in 1996, 42 in 2005) complete the Top 5 of the 48 countries that make up this year's IW 1000. The Top 5 countries represent 67.9% of the list and nearly $9.1 trillion of the $12.2 trillion total revenue for the list.
Since 1996, South Korea more than doubled its presence from 17 to 35 and contributed $329 billion in revenues.
Seven countries did not appear on the list in 1996: Saudi Arabia, Poland, Jamaica, Hungary, Czech Republic, Chile and the Cayman Islands. While these countries represent only 0.7% of the list, they did contribute $48.5 billion in revenue.
Movers And Losers
Of the 946 companies that experienced some sort of movement on the list (either positive or negative), 16 companies moved more than 200 slots up the IW 1000 list. One of those companies, Pilgrim's Pride Corp. (No. 468), jumped 276 spaces. According to Austin, Texas-based Hoover's Inc., a business research firm, Pilgrim's Pride is the second-largest poultry producer in the U.S. after Tyson Foods Inc. (No. 90). The Texas-based firm is also partially (38%) owned by ConAgra Foods Inc. (No. 181).
Another big mover is Brazil-based Embraer-Empresa Brasileira de Aeronautica SA, the world's fourth-largest aircraft manufacturer behind Airbus (parent company is EADS NV, No. 58), Boeing Co. (No. 38) and Bombardier Inc. (No. 168). The company, which primarily makes jets and turboprops, also serves the military market -- mainly the Brazilian Air Force.
Now for the biggest loser: Snow Brand Milk Products Co. Ltd., which lost 374 places to land at No. 710 in 2005 with $3.1 billion in revenues. The dairy company, based in Japan, entered the list in 1996 at No. 100 -- posting $13.5 billion in revenues. It remained in the 100-to-200-range until last year, when it placed 336. Plagued by food-poisoning scandals and fraudulent meat-labeling fiascoes starting in 2000, the company that used to be Japan's largest dairy firm has soured.
The Big Picture: Industries
Of the 31 industries that make up the IW 1000, Fabricated Metal Products, with companies such as Nippon Steel Corp. (No. 82), Gillette Co. (No. 260) and Timken Co. (No. 553), shined in 2004. The industry had profit growth of 673.5%, and the sum of net income for all companies in the sector was $12.5 billion.
As for the Paper industry -- with such leaders as Georgia-Pacific Corp. (No. 134) and Kimberly-Clark Corp. (No. 176); and the Plastics industry, with PolyOne Corp. (No. 951) -- both had profit growth of 230%. And in this case, Paper won over Plastics with a sum of net income at $8.6 billion compared with $460 million.
In terms of industries that didn't fare as well, the Chemical companies on the list collective negative 705% profit growth, but still managed to bring in $45.7 billion in net income with help from companies such as Procter & Gamble (No. 39) and BASF AG (No. 40).
As you can see, there are myriad ways to look at all of the data presented in the IW 1000. And like wine, one connoisseur's favorite may not be another's. It's all in how you analyze the package. With that, go forth and sample this year's vintage.
