Fastest Growing Companies Internationalizing
In recent years, an increasing number of companies have ventured offshore to seize opportunities offered by the vast global markets. And according to the data from DP Information Group’s Fastest Growing 50 (FG50) 2007 Awards and Ranking, many of these companies have reaped huge returns.
The annual FG50 award recognises the 50 companies with the highest Compounded Annual Growth Rate (CAGR) in turnover over the last 3 financial years.
Of the 50 companies that have made it to 2007’s FG50 winners’ list, 80% have an overseas component in their turnover, suggesting the crucial role that overseas expansion plays in fostering the growth of these companies.
One winner that has expanded overseas is Omni United (S) Pte Ltd, ranked 5th on this year’s winners’ list. Omni United specializes in manufacturing and distribution of tires, and derives its turnover from its overseas markets, the biggest being USA, Europe and India.
K1 Ventures Limited, ranked 10th on this year’s FG50 winners’ list, is another company where a substantial portion of its revenue is contributed by its overseas operations. 99.0% of the investment holding company’s turnover comes from investments spread across three sectors in the USA, namely energy, transportation leasing, education and wellness industries. Notably, the company’s turnover from overseas has grown from $230 million to $975 million during 2004 to 2006, signifying the importance of overseas markets to the growth of K1 Ventures.
This year’s FG50 winners demonstrate that growth is not just about venturing overseas but also about looking beyond the relatively established markets to opportunities presented by emerging markets such as the Middle East and the BRIC (comprising of Brazil, Russia, India and China). The opportunities for companies equipped with the expertise and resources are immense in emerging markets given the rapid pace at which they are opening up and the growing affluence of consumers in such markets.
Inter-Roller Engineering Limited, a first-time winner of this year’s FG50 awards, is one company that has made inroads into the Middle East market based on the expertise and experience that it has in the designing and building of airport logistics systems including airport baggage handling systems, air cargo handling. Since 2004, the company has been engaged in expansion works for the Baggage Handling Systems in Dubai International Airport Terminal 1 and it is expected to be completed this year.
EZRA Holdings Limited has ventured beyond South East Asia into India, Africa and the Middle East. Ezra’s expansion into these new regions could be well explained by the increasing importance of these regions as providers of oil and gas. The integrated offshore support solutions provider for the oil and gas industry has reaped significant returns from its overseas ventures which account for 71% of its turnover.
China, one of the fastest growing economies in the world with a total FDI inflow US$69.47 billion in 2006, is one market that Hi-P International Limited has established a strong presence. Hi-P International Limited has been a FG50 winner for four consecutive years, A contract manufacturer serving the wireless telecommunications, consumer electronics and computing and automotive industries, 83% of Hi-P International’s turnover comes from overseas markets of which the Chinese market accounts for 39% of its total revenue.
Apart from China, Korea is also emerging as a preferred choice of some companies in Asia for investment. For Target Asset Management Pte Ltd, which is ranked 11th in this year’s FG50 award winners’ list, its investments in Korea accounted for 18% of its total investments spread across markets in Asia.
With the continued liberalisation and opening up of sectors in other countries, endless opportunities abound overseas for companies that are hungry for growth. The success achieved by the FG50 award winners is a testament that globalization and the ability to look beyond the traditional markets to seize the opportunities presented by the emerging markets are necessary for sustainable growth.