Soon after the arrival of the first Peter Stuyvesants on the market Rupert sent a carton of the distinctive red, white and blue packets to Reemtsma in Germany. Reemtsma, accustomed to quick action, found the packaging amazing and congratulated Rupert in a cablegram: ‘Muster Stuyvesant angekommen stop Filter Mischung und Packung volkommen in Ordnung stop Meine Glück wünsche.’ This was followed by a letter in which he declared that nothing about the packet could be improved upon. He had had the cigarettes thoroughly tested by his own experts, including his brother Hermann, and the quality was excellent. He commented as follows on the impressive packaging:
‘You were wise not to use just the surname Stuyvesant but also the first name; it gives the product a far more personal character. White packets are highly problematic, since they can create an impression of coldness if not accompanied by warm colours. That is exactly what you have done here. The gold on the packet, which sometimes looks heavy, is used very subtly. You neatly circumvented the danger of black by using a paler shade that looks more like olive green. The asymmetrical red stripe running halfway round the packet creates a sense of quality and unique distinctiveness that I have never seen in any other packaging. This asymmetry imparts a dynamic vitality to the packet and a self-assured image, suggesting that this is an established brand and its manufacturer is definitely a company of stature.’ [Our translation.]4
Impressed as he was with Peter Stuyvesant, Reemtsma remained sceptical about the future of filter tips in Germany. On account of increased competition he made various attempts to subdivide existing brands; in Rupert’s views attempts that would not succeed, even though they were based on the accepted rules of the old ‘Markentechnik’ (the German marketing technique). ‘The consumer apparently regarded each brand as a separate personality, hence there was a strong need for new brands. The rest of the pre-war brands were practically dead and exhausted.’
The new cigarette was soon introduced successfully in South Africa, the United Kingdom, Belgium, the Netherlands, Australia and elsewhere.
The year 1954 in which they ventured on the purchase of Rothmans was also the year in which the Rembrandt Group took on the world market in earnest. By 1955 Rembrandt South Africa had a capital base of £1 000 000, while that of Rembrandt Beherende Beleggings was £750 000. In the same year Rothmans of Pall Mall was established in Australia. After initial losses Rothmans also started showing good results in Canada, with the first profit declared in 1960. Rothmans Canada operated with a very strong board after Rock City Tobacco Corporation had been sold to Rothmans in the Carreras deal. Rock City’s chairman was Louis Saint-Laurent, former prime minister of Canada, who was succeeded in the election of 1957 by John Diefenbaker, the Canadian leader who would agitate against South Africa’s continued membership of the Commonwealth a few years later.
When looking for a Canadian chairman for Rothmans Canada, Rupert was advised that no one was better suited for the job than Saint-Laurent. With his help Rupert appointed as directors the kind of distinguished people on whom he felt he could depend. One was Charles Massey, chairman of Lever Brothers, of whose Toronto family it was said that there were only two families in that city: ‘The Masseys and the masses.’ Another was Robert H (Bob) Winters, president of Rio Tinto Mining Company and a later minister of trade and industry, who subsequently only just lost out to premier Pierre Trudeau for leadership of the Liberal Party of Canada. Also on the board was a confidant of Rupert’s who provided important international contacts and advice, the British war hero Sir Francis de Guingand, who would become chairman of the South Africa Foundation.
Rothmans Canada turned into a profitable success story, like the South African operations, while the other overseas companies also started doing well. Rupert’s expansion abroad was stimulated by his experience in South Africa, where Rothmans – the ‘English’ cigarette – had the highest sales in the Afrikaans-speaking Free State, while Rembrandt – the ‘Afrikaans’ cigarette – sold best in Natal, often described as the ‘last outpost of the British Empire’. It convinced Rupert that patriotism counted for nothing when somebody took money from his pocket, and that he could fare as well internationally as at home, while simultaneously countering a possible local price war.
With time, it became evident that Rupert was achieving higher profits overseas than on the home front.
Everywhere Rupert stuck to his policy of working through partnerships. Rembrandt’s overseas investments took on a particular pattern. First, the best possible local partners were found and a new company established. In the initial phase and with the launching, advice and assistance were given from South Africa on an ongoing basis. Rembrandt would revitalise the new acquisition. Through cost-cutting and an emphasis on marketing and advertising the business would take off on its own steam. After the local partners had been trained and empowered, however, the Rembrandt Group moved into the background.
The United States was a case in point. Here Rupert obtained a foothold in the market through two small companies: Riggio Tobacco on Long Island in New York and, later, Larus Brothers in Richmond, Virginia, that concentrated on pipe tobacco. In 1954 Riggio was struggling. Rupert summoned Kotie Naudé, who headed his operations in the USA, and Paul Erasmus, then in charge of finance, to his Manhattan hotel. Erasmus, who would later succeed Hoogenhout as the financial head of the whole group and also become a director, relates that this was his first personal encounter with Rupert. When Rupert asked him if they had $22 000 to buy out Frank Riggio’s shares, he confessed somewhat sheepishly that their bank balance stood at $3 000. Rupert was flabbergasted: ‘How do you run your affairs?’ he wanted to know. Naudé had to take the young Erasmus aside and whisper to him that one does not actually say ‘No’ to Anton Rupert.
From Rupert’s bedroom, Erasmus phoned the vice president of finance of Universal Leaf Tobacco, the group’s tobacco leaf-supplier in Richmond. He explained that he had to ask a favour: Rupert urgently needed $22 000 to take over Riggio. The financial officer asked Erasmus to hold on while he consulted the tobacco baron Herbert W Jackson Jr, president of Universal. When he returned, he said: ‘Mr Erasmus, Mr Jackson is very impressed by your Mr Rupert. That young man is going places.’
The Americans, who by that time had got to know Rupert well, were especially impressed by his knowledge of the American Civil War. ‘He knows more about it than we do,’ they once told Erasmus. The good impression Universal Leaf’s bosses had of Rupert had its origin in an unannounced visit he had paid the company one Friday afternoon in 1954, when he met Jackson Jr and the chief executive officer, Gordon J Crenshaw, for the first time. ‘He said he intended to grow his company into a much larger one and to go into many other countries, and he would like to give us all his business,’ Crenshaw related. ‘Mr Jackson and I looked at each other and thought that it was likely that we were being offered 100% of virtually nothing.’
In retrospect, however, Universal Leaf Tobacco considered Rupert’s arrival one of the most important events in the company’s history. At first tentatively and then more and more extensively, Universal helped finance Rupert’s needs as he expanded internationally and became one of the world’s biggest cigarette manufacturers. A book on the American company’s history refers to the relationship as follows: ‘A man with a keen sense of loyalty to those who aided him along the way, he still gives public recognition to Universal (for whom he remains a key customer) for being willing to listen and then make a commitment to him on that Friday afternoon in 1954.’5
When Erasmus rejoined Rupert and Naudé after his successful phone call to Universal, he was congratulated on securing the money. Rupert put his hand on Erasmus’s shoulder as they left to go and have a meal: ‘You know, Mr Erasmus, the best training school for an accountant is poverty!’6
The money was transferred to Chemical Bank in New York on the same day, and Rupert could take over Riggio. They had to close down the factory a year later, however, though Rembrandt continued to market the Lexington brand successfully in South Africa.