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