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.
Chapter 6
Call of the grape
The beginnings of the new investment company that would become Rupert’s vehicle for gaining access to the liquor industry were modest, as was the case with tobacco. The starting capital of TIB was a mere £5 000, but within three years it grew into the parent company of the Rembrandt Group, by then worth £1 million. By the time TIB reached the £100 000 mark Rupert became its managing director. Before that he had repaid Voorbrand all the money he had earned there and also returned to the RDB, in the form of Voorbrand shares, an amount of £700 he had been paid as salary.
On the establishment of TIB in 1943, Dirk Hertzog said to Rupert: ‘Anton, our first little venture [Chemiese Reinigers] wasn’t exactly a failure, and I trust you and can after all lend you my name.’ These words were quoted in the first edition of Tegniek (Technology), the