Where SA ranks for global companies

By 2025, almost 230 Fortune Global 500 companies will be based in the emerging world’s cities, up from just 24 in 2000.

This isaccording to a new report by McKinsey Global Institute, which notes that South Africa ranks 21 when it comes to the number of large companies who have their headquarters in the country and revenue exceeding $1 billion or more.

South Africa has 67 such companies with combined revenue of $279 billion.

The report found that there are as many as 8,000 distinct large companies, worldwide, with revenue of $1 billion or more, and three out of four are based in developed regions.

“We expect an additional 7,000 companies to grow to this size by 2025— and seven out of ten of these new entrants are likely to be based in emerging regions,” McKinsey said.

The US, with 2,123 large firms, topped the list, followed by Japan (1,028), China (577), Germany (462) and United Kingdom (358).

Emerging markets companies
Emerging markets companies

“Together the companies in our database generate consolidated global revenue of around $57 trillion, which is equivalent in size to a striking 90 percent of global GDP,” the report said.

By 2025, McKinsey says that anticipate that their revenue will climb to some $130 trillion.

The report noted that 20 cities are home to more than one-third of large companies, with Tokyo leading the way with 613, followed by New York (217), London (193), Osaka (174), and Paris (168).

In sub-Saharan Africa, Johannesburg and Cape Town are the leading business hubs, with 60% of the region’s headquarters between them. Just ten cities outside South Africa are home to a large head office.

The MGI CompanyScope database identifies 14 sub-Saharan cities that host large company headquarters whose annual revenue is at least $1 billion. But the number of headquarters is not yet proportionate to GDP.

According to McKinsey, more than 90% of cities with GDP exceeding $9 billion in Western Europe can lay claim to a large headquarters, but this is not the case in Africa where only one in eight cities does.

“South Africa is the only country that bucks this trend; it is home to names ranging from energy and chemicals company Sasol to the Bidvest Group distribution and food-services company.”

The report noted that, during the apartheid years, South Africa was isolated from the international community, and few multinationals established large subsidiaries there. In their absence, local companies grew without foreign competition.

“Today, Johannesburg, Pretoria, Cape Town, and Durban are among the continent’s leading cities for large companies,” McKinsey said.

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Where SA ranks for global companies