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ОглавлениеChapter 5
Small beginnings in business
Rupert’s change of direction, his entry into the business world, was small and modest, but it was to be like the mustard seed from which a giant tree would grow.
His business career started on a modest scale while he was still lecturing at the UP. Rupert, his student friend Dirk Hertzog, then an articled clerk at a Pretoria law firm, and Dr Nic Diederichs, later minister of finance and state president, decided to open a dry-cleaning business. This was consonant with a conviction that Afrikaners had to fight their way out of national obscurity, if not inferiority, by non-political means. Hertzog shared the view that too few Afrikaners were involved in commerce – for many years they had restricted themselves to agriculture and the professions. The choice of dry cleaning was based on sound reasoning: wartime austerity meant that new clothes were hard to come by and dear, so people had to wear what they had − and have it cleaned regularly. Besides, with his training in chemistry Rupert felt he was cut out for the business.
The dry-cleaning business, Chemiese Reinigers Edms Beperk (Chemical Cleansers Pty Ltd), was situated at 535 Voortrekker Road, Pretoria. Four partners each contributed £100 to the starting capital of £400: Rupert borrowed his £100, repayable with interest, from the fourth director, Hertzog’s half-brother Dawid de Waal Meyer, then South African trade commissioner in Canada.
The name itself tells a story. Their advertisement in Ons Reddingsdaad (Our Act of Rescue), a brochure published by the head office of the Reddingsdaadbond (RDB) in 1941, appealed directly to Afrikaner nationalist sentiment and shows how these new entrants into the commercial world initially saw their market:
Always support the True Afrikaans CHEMIESE REINIGERS (like you, we prefer this name to the erroneous, anglicised word: Dry-cleaners).
We undertake chemical cleansing (dry-cleaning) of every kind of garment, carpets, etc., as well as refurbishing of hats.
Our equipment is the latest and the best. Our workers are specialists.
A BETTER, FASTER AND EXCLUSIVELY AFRIKAANS BUSINESS. Ask your Dealers to send your clothes to us.
Directors: Dirk Hertzog, BA, LLB; Anton Rupert, MSc. [Our translation.]
Their advertising provided an early lesson to an entrepreneur who would later gain international renown for his sophisticated marketing techniques. In retrospect Rupert himself admitted that the word ‘chemical’ was an unfortunate choice − after all, dry-cleaning was meant to obviate the use of chemicals. And the focus on an exclusively Afrikaans clientele narrowed their market considerably. An appeal to sentiment was not a winning recipe, as some of his tobacco products would also later prove. Rupert noticed that the competitors to whom they later sold the business focused on serving a wider market comprising both language groups.
The new business also faced other problems. It was wartime and the benzine for the cleaning process had to be used and reused. Their German manager did not replace the filters of the machines regularly and white tennis shorts were returned to the customer a pale shade of grey. Customers complained because deliveries were not punctual. A valuable lesson from these first experiences was that quality and service delivery, in short, value for money, was crucial to the success of a business enterprise. It is not surprising that ‘the customer is king’ would become one of the chief maxims in the Rembrandt Group. They were contemplating getting Huberte to run Chemiese Reinigers, but before that could happen Rupert had launched out in a very different direction.
Yet the business was not a total failure. ‘But people were reluctant to put their money in dirty laundry – you could not get capital for it,’ Hertzog wrote in his memoirs. ‘We then thought they may put their money in liquor. We bought a bottle store and behold, the first thousand pounds we received came from a dominee; all his life he fought against the devil and then he put his money in it.’
When the partners eventually sold the dry-cleaning business, the money came in handy at an opportune time. For Rupert, the venture represented a beginning that was inspired by a dream as well as an unyielding resolve to be successful. In years to come he would often quote the Flemish adage: ‘Where there’s a will, there’s a way – the will itself becomes the way.’
This will to succeed was reinforced by the nationalist and republican ideals prevalent among Afrikaners at the time. The Reddingsdaad movement, inspired by Ds Kestell, was actively promoting the very kind of venture in which Rupert and his partners were engaged. The aim was to mobilise Afrikaners to go into commerce − and, ultimately, industry as well − rather than stay within the safe confines of the professions. At that time teaching, the church and the law were the limits of their ambition. Afrikaners had started off as farmers, the first courageous immigrant entrepreneurs on the continent with which they had come to identify, but the cumulative effects of the Anglo-Boer War, the Great Drought and the Depression had reduced many of them to penury. Poverty had eroded their cultural, religious and educational life and in the urban slums, many Afrikaner families lapsed into social disintegration and moral depravity. In an article on the Reddingsdaad movement, Diederichs expressed the need for the economic advancement of Afrikaners as follows: ‘It is the poverty that tears families apart, forcing thousands to the slums in the cities, where crime and social evils abound. It is the economically backward position of our people that makes us a nation of employees, dependent on others for their daily bread. And thus it lies at the root of a sense of dependency and a sense of inferiority that eat into the soul of our people.’
Among many English-speaking compatriots there was little empathy for the distress of poor Afrikaners. Sir Robert Beattie, vice-chancellor of the University of Cape Town, was quoted by the writer MER (ME Rothman) as casually telling a public meeting that ‘poor whites’ were ‘intellectually backward’ and that ‘something inherent in the Afrikaners’ was the reason why the phenomenon of poverty was taking on such alarming dimensions in their case.1 While the Carnegie Commission of Inquiry on the Poor White Question had refuted the allegation about intellectual inferiority, Afrikaners were manifestly not holding their own in the urban, capitalist structure that came in the wake of the mineral discoveries. The commission’s statistics on the poor white problem were, as noted already, horrifying, with 300 000 out of a total white population of 1 800 000 classified as poor whites. The Stellenbosch economist Prof. CGW Schumann calculated that the per capita income of Afrikaners in 1936 averaged £86, as opposed to the £142 of other South African whites.
This was the situation that Kestell and other concerned Afrikaner leaders sought to address with an ‘act of rescue’. Rupert had been deeply moved by Kestell’s appeal when he visited Bloemfontein for the arrival of the Ox-wagon Trek on his birthday in 1938. In later life he often pointed out that a man of the cloth, Kestell, had motivated him to embark on a business career, starting out with virtually nothing. In certain respects the Reddingsdaad campaign and the spirit it embodied foreshadowed the Black Economic Empowerment movement of post-1994 South Africa, though the earlier movement was not based on the transfer of capital with favourable financing schemes or share options.
A year after the Great Trek centenary, in October 1939, the Eerste Ekonomiese Volkskongres (First National Economic Congress) was held at the initiative of the Economic Institute of the Federasie van Afrikaanse Kultuurverenigings (Federation of Afrikaans Cultural Associations, FAK, the cultural front of the Afrikaner Broederbond, AB). The overriding goal was to rouse the impoverished, demoralised people to take on the challenges of entrepreneurship. But, like both Rupert and Hertzog with their first venture, they would need capital.
Capital and capitalism had been a bone of contention among Afrikaner intellectuals for some time. Early in the century Gen. Smuts, in A century of wrong, had thrown down the gauntlet to tyrannical international capital, which British imperialism in South Africa represented at the time. By the 1930s pent-up resistance to British imperialism was still rife among Afrikaners, alongside an aversion to hated excrescences of capitalism, as expressed through DC Boonzaier’s cartoon character, the arch-exploiter Hoggenheimer, who featured regularly in the Afrikaans daily Die Burger. But by 1939 Hitler’s national socialism and Stalin’s communism − both epitomising the totalitarian state − were looming as a counter threat. The Afrikaner intellectuals who were spearheading the economic struggle did not reject capitalism outright, but instead advocated a variant that became known as volkskapitalisme (national capitalism). Prof. Wicus du Plessis stated at the congress that the new economic movement had as its aim ‘no longer to tolerate the Afrikaner nation being devastated in an effort to adapt itself to a foreign capitalist system, but to mobilise the nation to conquer this foreign system in order to transform it and adapt it to our national character.’
One after another prominent Afrikaans intellectuals made a case for the mobilisation of capital to launch Afrikaner businesses that were capable of achieving that aim. One outcome of the congress was the founding of Federale Volksbeleggings (Federal National Investments, FVB), which would do just that. The other – the answer to Ds Kestell’s appeals over the years for the economic upliftment of Afrikaners – was the establishment on 8 December 1939 of the Reddingsdaadbond (RDB). Its task would be to dispense funds to suitable applicants who wanted to venture into business.
This was the organisation that finally lured Rupert away from academia. Various people had been prodding him to join it and in the end he was invited by his partner Dr Nic Diederichs himself, by then at the helm of the RDB. At the end of 1940 Rupert resigned from his post at the University of Pretoria. He abandoned his studies − the doctorate in chemistry and his legal and commercial courses − and stepped out into the world outside the ivory tower. At the age of 24 he found himself heading the small-business section of the RDB at its headquarters next to the railway station in Johannesburg on the bustling Highveld, the centre of South Africa’s industrial heartland.
In this decisive period of his life Rupert acquired an intimate knowledge of the needs of small-business entrepreneurs. His mentor was Dr AJ Stals, another remarkable man who would have a lasting influence on his life. Rupert had a deep respect for Stals, the kind of Afrikaner he would probably typify as a member of the Afrikaner aristocracy. He relates that Stals, the son of a tenant farmer at Tulbagh in the Western Cape who obtained doctorates in medicine and law at the universities of Berlin and Dublin, did not hesitate to scrub floors for his widowed mother during holidays at home. After 1948 he became a member of Malan’s cabinet, but died within three years. Stals’s political views were moderate – according to his wife he walked out of a National Party congress where unfavourable decisions were being taken about the rights of coloured people. In this respect, too, he influenced Rupert, who said in later life that if Stals had lived long enough after 1948, coloureds would never have been removed from the common voters’ roll. When a close friend of Stals once commented that he was not a good politician because he was too fair to indulge in nepotism, Rupert’s response was, ‘If fairness makes you a bad politician, I don’t belong in politics. My father was therefore right to turn down political positions.’ In fact, he came to believe that Afrikaners managed to build their economic muscle for the very reason that in times of crisis, like during the Second World War, they channelled their energies into non-political fields.2
In the early 1940s Stals was a director of Volkskas Bank and Voortrekker Press, two of the rather few sizeable Afrikaner businesses at the time. Twice a week he travelled from Pretoria as financial adviser to help Rupert vet loan applications from prospective entrepreneurs, who could be granted loans up to £500. A top economist, Stals trained Rupert in his new job of helping beginners find their feet. One of the success stories was DW Pienaar, who for many years ran a barber’s shop in the Groote Kerk building in Cape Town, where several parliamentarians came for their haircuts. But many fledgling Afrikaans enterprises folded − in Johannesburg alone at least 50 of them.3
Nonetheless, at the RDB’s second official congress in Bloemfontein on 14 July 1943, Dr Eben Dönges could maintain with some justice that the organisation − acting as the ‘fieldworker’ of the FAK’s Economic Institute − was breaking down Afrikaner prejudice against capital investment in business enterprises, especially Afrikaans ones. In due course the Afrikaans universities (Stellenbosch, Pretoria, Orange Free State and Potchefstroom) would also play a role in cultivating business leaders by producing growing numbers of commerce graduates. In 1945, five years after its inception, the RDB had close on 400 branches countrywide and some 70 000 members. Numerous Afrikaans enterprises had been assisted with loans. Thousands of job opportunities had been created and hundreds of people had received counselling or been helped with the financing of their studies by the RDB, which later linked up with the Helpmekaar study fund.
By the time the RDB was dissolved in 1957, Rupert had left the organisation. But his involvement with small business had made him aware of tantalising possibilities. Besides, he was itching to try his hand at manufacture, for, as he saw it, ‘chemistry and industry are first cousins’. His choice of a branch of industry stemmed from his experience as a child of the Depression: he came to the conclusion that an entrepreneur keen on entering the business world should concentrate on products that would sell even during a depression. And if any two products were depression proof, they were liquor and tobacco.
As early as 1941, while Rupert was still involved with the RDB, he heard about an insolvent tobacco company that was for sale. He himself could raise only £10, but as in the case of Chemiese Reinigers he found willing partners: Dr Nic Diederichs and his mentor Dr Stals. The new venture received loans of £2 500 each from FVB and Kopersbond, a big wholesale concern, and the new company was launched with a starting capital of £5 000. A week before Rupert’s wedding, on 21 September, Voorbrand Tabakmaatskappy4 was formally established and was registered the next day, 22 September 1941 − the official founding date of the Rembrandt Group. On the 23rd the directors held their first meeting.
Voorbrand was established at a time when the South African business world was dominated by English speakers. In trade, industry, finance and mining the turnover of Afrikaner enterprises comprised only five percent of the total in 1938-1939; in industry, only three percent. The few established Afrikaans companies included the insurance companies Sanlam and Santam, the media companies Nasionale Pers (later Naspers) in the south and Voortrekkerpers in the north, the undertaker Avbob and Volkskas, the first Afrikaans commercial bank, founded in 1934.
Two other pioneer entrepreneurs who were creating empowerment and job opportunities for Afrikaners in parastatal institutions were the chemical engineer Dr Hendrix van Eck and the equally brilliant electrotechnical engineer Dr Hendrik van der Bijl. Van der Bijl, chairman of Escom and thereafter of Iscor, realised his ideal of supplying inexpensive electricity and steel as the basis for industrial development. The industrial town of Vanderbijlpark was named after him. His successor as chairman at Iscor was Dr Frikkie Meyer, who as chairman of the council of the UP established the first business school in the world after that of Harvard University. Under Van Eck’s chairmanship of the Industrial Development Corporation (IDC) important parastatal institutions such as Sasol, Foskor, Safmarine and Alusaf were established and financed. Michael O’Dowd, a director of Anglo American, wrote about these institutions: ‘The primary credit (for the policy) belongs to the Afrikaners, and it was in effect opposed by many, if not all, English-speaking South Africans.’
As a result of the calls for economic mobilisation in the 1940s many new enterprises in the private sector sprung up among Afrikaners, most of which failed. Ultimately, out of the initiatives of those years two private-sector enterprises in particular were to grow and flourish. The one was Rupert’s Rembrandt, which developed out of Voorbrand. The other was Veka, subsequently known as Veka/Bertish, a clothing manufacturing company established by Albert Wessels. Wessels would later make his greatest strides after acquiring the South African trading rights of the Japanese vehicle manufacturer Toyota.
After the establishment of Voorbrand, Rupert continued at the RDB in a supervisory capacity for the time being. In fact, his honeymoon was spent touring the country to publicise and promote the organisation. Well-meaning friends thought it quixotic to take on a formidable industry − 90%-dominated by the giant United Tobacco Company (UTC) − with just £10 to his name. Some travelled from far afield to persuade him to abandon the plan. People like the journalist Willie Muller from Port Elizabeth, a fellow student in Pretoria, wanted to know ‘what on earth he thought he was doing’.5
Rupert himself could only contribute £10 in cash, but ultimately this £10 was to become an investment from which a multibillion rand global business empire would grow.
He had been approached by Stals to undertake the new task at the insistence of Jan de Kock, general manager of the Magaliesberg Tobacco Growers’ Society (MTKV), which he had built up into a model cooperative. De Kock had been a key figure in the establishment of the Tobacco Control Board, which sought to regulate the market in the best interests of tobacco producers and consumers, and headed an umbrella body of ten tobacco cooperatives. This dynamic leader thought so highly of Rupert that he wanted to do business with no one but the young UP lecturer at Voorbrand. He knew it would take brains and stamina to make even a dent in UTC’s virtual monopoly and he thought Rupert had the character and perseverance required for the task – if he failed to get a grip on the tobacco industry, other Afrikaners would not follow. De Kock and Rupert became close friends after the latter had taken over the management responsibilities at Voorbrand. De Kock also made a grader from the MTKV available to help Voorbrand with the manufacturing of pipe tobacco.
De Kock’s prescience was shared by others. Not long after the establishment of Voorbrand one of its directors tried to entice Rupert to join Kopersbond, at a higher salary. He turned down the offer.
The new company embarked on their task with a number of directors who would make their mark in South African business life. The calibre of the people involved also indicated a tendency that would characterise later, also foreign boards of directors of the Rembrandt Group: Rupert could draw together able associates around him.
The first chairman of Voorbrand’s board was Dr Stals, who served as minister of education, health and social welfare in the Malan government from 1948 to his death in 1951. One of the first directors of Voorbrand was Dr Diederichs, later minister of finance and eventually state president, who would succeed Stals as chairman of Rembrandt after the latter’s appointment to the cabinet. Kopersbond was represented by two directors, BJ Pienaar, at one time South African consul in Milan, and JJ Fouché. Other directors were the Afrikaans cultural figure Ivan Makepeace Lombard, who thought up the name Voorbrand; WB Coetzer, the chartered accountant who was later chairman of Federale Mynbou (Federal Mining) and Gencor as well as a director of up to 60 companies; Dr Etienne Rousseau, later chairman of Sasol, which became a world leader in the large-scale manufacture of oil from coal; and CC (Oupa) Kriel of Wol Groeiers Afslaers (WGA, Woolgrowers’ Auctioneers).
Rupert’s salary at Voorbrand was £500 per annum, £41.13 per month. He was also allocated two shares in the company. The factory occupied rented premises at 200 Commissioner Street, close to His Majesty’s Theatre and the radio corporation in those days, hence not far from the present Carlton Centre in the city centre. At this early stage Voorbrand was joined by an associate with whom Rupert was to travel a long road: the accountant Daan Hoogenhout. Hoogenhout, a B.Com. graduate from UP and a ‘child of the depression’ like Rupert and Huberte, was a grandson of CP Hoogenhout, a campaigner for Afrikaans in the late 19th century.6 Rupert and Hoogenhout shared a room at the entrance to the building. They partitioned it into two tiny offices, each barely big enough for a desk with a chair on either side. The ceiling rained dust on everything. One day when Hoogenhout climbed up there to clean the mess, he fell straight through the ceiling onto his desk.
The hallway was big enough to accommodate another desk. Within a few months it was occupied by Huberte, who became the unpaid clerk, typist, telephonist, secretary and messenger. Her typing was rudimentary − she used only four fingers − but she made up for it in other ways. Rupert soon also charged Huberte, according to her own description the ‘only female being’ at Voorbrand, with managerial duties. Among other things, she studied the Companies Act so she could draft notices of board meetings, letters to interested parties and other documents for the expanding company. She attributes their good working relationship to the good understanding between them. ‘While the speed of my typing wasn’t up to scratch, the accuracy of the data was good,’ she remembers. In effect, she was the Rembrandt Group’s first company secretary.
Adjoining the front offices was a room where six women, the first employees, sat around a block moulding containers for Voorbrand’s sole product − pipe tobacco − by hand. At the back was a workshop with a few machines taken over from their insolvent predecessor. Of these they used only the tobacco-cutting machine. Carl Langenstrass was the foreman in charge of this small domain.
For quite a while the new enterprise struggled to keep going, sometimes finding it difficult to pay the employees’ weekly wages on Friday afternoons. Once when a bank clerk from Volkskas refused to give Hoogenhout the amount of £25 needed for the wages because there was not enough money in Voorbrand’s account, Hoogenhout had to telephone Dr Stals, then a director of Volkskas. Stals deposited a personal cheque in Voorbrand’s account and requested the bank manager to pay out the amount. On another occasion Voorbrand was unable to pay its auditors, Meyernel, for their services. The auditors were obliged to write off the £5 they were owed. Rupert never forgot this, and after his move to Stellenbosch Meyernel, a precursor of PricewaterhouseCoopers, remained the auditors of the Rembrandt Group despite the difficulties caused by distance.
Without money or equipment they were unable to produce the big money-spinner, cigarettes. Besides, the wartime currency and import restrictions prohibited importation of the necessary machinery and packaging material.
At the early stage of Rupert’s entry into the tobacco industry there were already four other cigarette companies in the South African tobacco market, which yielded an annual profit of £2 million, but in which some 60 cigarette brands were vying for a market share. Tobacco farmers complained that they were being crippled by price fixing, while the net profit UTC transferred to its overseas parent company, British-American Tobacco, exceeded the gross annual income of everybody engaged in the local industry, including the − mainly Afrikaner − farmers. It was a situation calling for stronger competition, and Anton Rupert saw this as an opportunity.
He started studying companies that were depression-proof and found that, worldwide, tobacco companies were among the most successful. These included the major companies in the USA, such as RJ Reynolds, Lorillard, American Tobacco and Liggett & Myers. He also studied companies in Spain, Italy, Japan and China. In France, the state monopoly Seita owned famous brands such as Gauloises and Gitanes. Tobacco companies in the United Kingdom included Player, British-American Tobacco and Imperial Tobacco, whose chairman, Lord Winterstoke, head of the Wills family, was the richest man in Britain in 1901 after Cecil John Rhodes, who had made his fortune in South Africa.
As a new entrant to the industry Voorbrand was given a maximum allocation of only one percent by the Tobacco Control Board, and that was for snuff, pipe and cigarette tobacco. The latter had to be stored for seven years, until 1948 when Rembrandt was at last able to enter the South African cigarette market. Meanwhile the ‘Afrikaans impostor’ in the tobacco industry faced fierce competition, some of it conducted in underhand ways such as whispering campaigns and rumour mongering.
As early as 1941 Voorbrand received a substantial offer from ME Risien, chief executive of UTC: he was willing to pay £50 000 if Voorbrand undertook not to manufacture cigarettes, thus entrenching UTC’s near monopoly of the market. Stals’s response was swift and categorical: ‘We’re not selling our birthright.’
Rupert, while always courteous and considerate, early on showed the steel that would inspire his employees as well as his competitors with awe. On an occasion when he encountered Risien at a gathering of tobacco manufacturers, the man from UTC inquired somewhat snidely, ‘So how is little Voorbrand doing?’ Rupert immediately retorted: ‘Mr Risien, by all laws of probability we have a good chance of outliving you.’ Risien never condescended to him again, but many years later his son applied to Rembrandt for a job. At that time there was no suitable vacancy.
Times were hard and for the first few years the young company showed a mounting loss. By 1948 it had risen to £30 000 − ‘Not much, if you think back on it today,’ Rupert comments in retrospect, ‘but a loss just the same.’ Its competitors had the benefit of existing quota allocations not granted to newcomers. The inability to manufacture cigarettes did not help either. It inhibited expansion to such an extent that some directors were considering selling their shares. A major lesson he learned from the difficult times during and after the war, according to Rupert, is that Voorbrand was mainly selling products he would typify as C products. He distinguishes three classes of products: A products, better than those of his competitors; B products, which are equal to the products of competitors, and C products, inferior to those of competitors. The lesson he would later impress upon his employees was to launch only A products or at least B+ products. The only other way was imitation or discount prices, which he rejected as not normally options for quality entrepreneurs. Rupert’s exceptional emphasis on quality was to become a supreme feature of the Rembrandt Group.
Another major problem was to find a market for snuff tobacco. This they were able to solve with the help of two Indian businessmen, Yusuf Ahmed Cachalia, who had a textile shop, and Donath Desai. These two individuals assisted Rupert to find outlets for the snuff tobacco with the help of other Indian merchants. Huberte is of the view that the snuff tobacco success is probably what ensured Voorbrand’s survival.
The Ruperts became close friends of the Cachalias and the Desais, visiting each other at home. Both Cachalia, a brother of the activist Mauldi Cachalia, a leading figure in the Transvaal Indian Congress, and Desai were fiercely opposed to British imperialism and later played a prominent role in the political struggle against apartheid. Desai’s daughter Zureena, a medical practitioner, made news headlines as a result of her relationship with Prof. John Blacking, professor in social anthropology at the University of the Witwatersrand. The security police got wind of the relationship and started harassing the family. Desai asked Rupert to intervene, but there was nothing he could do: Section 16 of the then Immorality Act, which prohibited amorous relationships across the colour line, was in full force and spared nobody. The couple had to emigrate in order to marry.7
Pipe tobacco, too, was not without problems. Wartime restrictions on imports of packaging material hit new enterprises hard; they were unable to obtain permits at all. ‘Our packaging was simply not good enough,’ Rupert recalls. ‘Our competitors were established manufacturers, they could make beautiful plastic packets with a lead lining and foam rubber on the inside.’ His eventual obsession with packaging and marketing stems from that early experience.
Voorbrand registered several brand names with Afrikaans and patriotic connotations, such as Oom Bart, Drosdy, Patriot, Landdros (‘the good things from the past improved to the very best in the present – medium strength)’, Voorbrand, Spoor (spur, track) and Vonk (spark). English-speaking customers could buy Stop Press (‘extra special edition’), Bandmaster, Carefree and Sunkist Golden Mixture.
Drosdy, a pipe tobacco, was advertised as ‘a unique discovery: tobacco matured in old wine casks – medium strength’. One of Rupert’s good friends in Johannesburg, the poet WEG (Gladstone) Louw, approved the advertising slogan ‘matured in old wine casks’ for the pipe tobacco. Louw, who was awarded the prestigious Hertzog prize for poetry at the age of 21, also worked at the RDB at the time, in the arts and culture section. Like other friends of the Ruperts, this younger brother of the leading Afrikaans poet and writer NP van Wyk Louw contributed ideas to the new company Voorbrand, which initially stored Drosdy tobacco in old wine casks. The Ruperts also got to know Van Wyk Louw through Anna Neethling-Pohl, sister of his second wife, Truida Pohl. The Rupert and Pohl children had all grown up in Graaff-Reinet.
During the war years while he was still in Johannesburg, Rupert was, without his knowledge, proposed by friends for membership of the AB. Other members of the AB at the time were the prominent literary figures Dirk Opperman and Van Wyk Louw. Rupert’s name was put forward in a circular, as was then customary in the secret organisation. He became member number 3088.
Dirk Hertzog, also a member, points out in his memoirs that the membership of the AB was a little more than 2 000 during the war years, when Smuts had proclaimed emergency regulations forbidding public servants and teachers to be part of the movement. Afrikaners like Hertzog were incensed that Smuts had forced highly esteemed fellow Afrikaners to resign from the public service on account of their AB membership.
On 24 August 1942 Rupert was one of 75 delegates and businessmen at the founding congress of the Afrikaanse Handelsinstituut (AHI, Afrikaans Institute of Commerce) in Bloemfontein, another product of the Ekonomiese Volkskongres and an RDB initiative to promote the interests of existing and emerging Afrikaans business people and entrepreneurs. The chairman of the first executive was JG (Kaalkop) van der Merwe, businessman and lawyer from Heilbron in the Free State, and MS (Tienie) Louw of Sanlam was the first deputy chairman.8 In 1949 Rupert became a member of the executive of the AHI and in 1950 chairman of the industry committee, but he eventually resigned because of the growing demands of his international business concerns.
According to a highly secret and confidential circular of 14 January 1944 in the Rembrandt archives at Stellenbosch the production of Voorbrand increased by 300% in 1943 after the company had entered the pipe-tobacco industry in 1942. At that time the company had 40 registered brand names, eleven kinds of packed tobacco and eight kinds of loose tobacco. In a circular in Afrikaans addressed to ‘You as a connoisseur of pipe tobacco’, dated 15 February 1943, Rupert emphasised to clients that Voorbrand makes provision for a variety of tastes and maintains the quality of the various kinds of tobacco. ‘Our factory is totally under the control of Afrikaners and Afrikaans capital. Our tobacco is processed and packed in elegantly designed packets by Afrikaner hands,’ he continued, and invited clients to order directly from the factory at retail prices.
In board minutes, however, it was noted that the appeals to sentiment did not have the desired effect on Afrikaans consumers. ‘Partly as a result of early disappointments of failed businesses and largely because of a sense of inferiority, the Afrikaans public do not regard their own as good enough.’ It was also noted that Afrikaans businesses were generally perceived as ‘expensive’. These seemed to be the reasons why they started manufacturing products with English names, while attempts were also made from early on to enter the markets for black and Indian consumers.
At the beginning of 1943 Rupert presented Voorbrand’s directors with a comprehensive report on the tobacco industry. It included a careful, scientific analysis of the various types of tobacco, drying procedures and additives. There were statistics on the number of tobacco growers, tobacco corporations, their products and the Tobacco Control Board’s quota system, which was heavily biased against new entrants. In addition, wartime shortages and austerity measures curbed progress. From all this he concluded that any new factory could only expand slowly and by degrees.
Voorbrand was hampered in that it was not allowed to manufacture cigarettes, but already at that stage Rupert recommended that the cigarette tobacco should be kept and preserved in view of ‘the size and scope of the cigarette industry’. Nonetheless, the wartime restrictions on the manufacture of cigarettes posed such a severe obstacle to expansion that certain directors were keen to sell their shares.
Among further problems listed in the report was the shortage of fuel for Voorbrand’s travelling salesmen, since the chief fuel controller refused to allocate any fuel to new travellers during the war years. It was also difficult to obtain supplies of materials, as the company had to face other controllers – the controllers of paper, of vehicles, of rubber, of bags and of industrial chemicals. Moreover, owing to the shortage of matches, Voorbrand was ‘the further victim as we cannot supply matches with the tobacco’.
Rupert pointed out the dominant position of UTC and the control this company could exert over wholesale and retail traders as well as publicity and advertising space. He came to the conclusion that the answer was advertising. More and more advertising at every level, by every means, was an essential expenditure and one of the cornerstones of success.9 This conviction stayed with him, culminating in the sophisticated advertising and marketing approach with which he would build an international reputation.
Voorbrand’s third AGM was held in December 1944, the year in which it became a public company. Its capital was increased from £25 000 to £50 000 by means of a share issue of £36 980. But the immediate outlook was bleak. Government regarded smoking as a luxury and continued to impose heavy excise duty and import restrictions. The quota system still benefited established manufacturers and stifled new enterprises. Somewhat dispirited, Rupert and his friends asked at the AGM: ‘What hope is there for young industrial enterprises to establish themselves under such circumstances?’ But with unfailing idealism they themselves provided the answer: ‘. . . we believe in our future, and we shall be victorious.’
Twenty-five years later, at Rembrandt’s 21st anniversary celebrations on 4 June 1969 in Paarl, Rupert recalled the early beginnings of Voorbrand and the spirit that had sustained them. ‘It is very simple and I try to teach it to my children: when you walk on the beach at Hermanus and you see the sand that stretches for miles, you realise that the human being is nothing more than a grain of sand . . . But always remember, the other person is also nothing more than a grain of sand. Then you can never be conceited. You are humble, but you will never lack confidence. This is to me the basic concept that has sustained our small group of people who started and those who are sitting here today, to the point where we are one of the biggest groups in the world at present. You yourself are nothing, but the other people are no more than you.’
Tobacco was indeed a product that would sustain the later Rembrandt Group through thick and thin. It helped to make it possible that setbacks could be converted into opportunities – a perennial philosophy of Rupert’s, who has often pointed out that the Chinese word for ‘crisis’ comprises two pictographs meaning ‘calamity’ and ‘opportunity’ respectively.
‘If we want to avoid the calamity, we must seize the opportunity with all our might,’ he said on opening the agriculture and industry show in Port Elizabeth in 1967.
An early example of how he seized a setback as an opportunity occurred in late 1942 when FVB became dubious about Voorbrand’s prospects and threatened to sell its 2 000 shares. This plunged the fledgling company into crisis. The ironic consequence was a further far-reaching initiative, an inventive solution conceptualised by Rupert: to launch a new investment company, Tegniese en Industriële Beleggings Beperk (TIB, Technical and Industrial Investments Limited), that could strengthen its capital base through the sale of shares. The start of TIB was financed by the sale of the dry-cleaning business Chemiese Reinigers. That was when Dirk Hertzog, Rupert’s old friend and first business partner, joined the board of Voorbrand.
Rupert threw himself into the campaign to sell shares in the new company, thus raising the necessary capital to buy back not only the 2 000 FVB shares, but those of Kopersbond as well. When FVB was dissolved years later, those 2 000 shares were worth more than all its assets. With the blessing of Voorbrand’s board, Rupert was allowed to place shares in TIB.
The establishment of TIB gave the first indications that Rupert was starting to move. The investment company was to lay the foundations for one of the most spectacular expansions in South African industry, the House of Rembrandt.
