Seven local firms make `Forbes' A-list

Forbes magazine named seven Taiwanese companies to its list of the world's 400 best large companies in its latest edition released over the weekend.

These companies include electronics manufacturers Hon Hai Precision Industry Co (鴻海精密), Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), United Microelectronics Corp (UMC, 聯電), banking company Cathay Financial Holding Co (國泰金控), material supplier China Steel Corp (中鋼) and chemicals maker Nan Ya Plastics Corp (南亞塑膠) and Formosa Plastics Corp (台塑).

The top 400 list, or the Forbes A-list, is released annually after evaluating each company's five-year sales, profit and return on capital data, recent stock market performance as well as analysts' earning estimates.

To qualify for the list, a company has to have annual sales of US$5 billion or a stock market value of US$5 billion.

Hon Hai ranks as the highest at No. 291 among all Taiwanese nominees, with the company reporting a 62 percent five-year average annual sales growth, second among all the electronics companies on the A-list.

Terry Gou (郭台銘), chairman of Hon Hai who owns a 25 percent stake in the company, also ranked as No. 256 on the latest Forbes billionaires in March with US$1.6 billion wealth.

The company has thrived via selling electronics parts and assembling.

According to Forbes, rather than creating own brands, Hon Hai better embodies the island's ascent in the no-brand contract manufacturing that's made it rich in recent years. Hon Hai Precision started out as a supplier of plastics in 1974.

In 1981, a time when personal computing was in its infancy and Microsoft was a little-known six-year-old newcomer, Hon Hai began manufacturing connectors -- a business that would boom as personal computers became popular.

Despite tough times in the electronics sector last year, Hon Hai's business continued to grow. Net profit in the first nine months of last year climbed by a third from a year before to US$350 million, sales also soared by about two-thirds, to US$5 billion, the Forbes Web site reported.

At the industry level, the move into contract manufacturing makes sense. A global trend toward outsourcing could allow growth among those companies to more than double the 5 percent to 7 percent long-term average for the electronics industry, Forbes said, citing Goldman Sachs.

Three out of the seven local companies were also selected on last year's top 400 list, of which the nation's two largest chipmakers, TSMC and UMC, rose in ranking to No. 309 and No. 358 from the previous year's No. 343 and No. 366, respectively.

Chemicals processor Nan Ya Plastic slid from No. 250 on the 2002 Forbes A-list to No. 299 this year.

US retail giant Wal-Mart Stores ranks as the world's finest large corporation on the A-list, followed by France-based energy supplier Total Fina Elf, Japan telecom player NTT and German electronics maker Siemens. German insurance company Allianz ranks as No. 5 on the top 400 of the world's best big companies.