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 Afrikaans business magazine started by Rembrandt that would later become Finansies & Tegniek (with an English counterpart, Finance Week) in the Naspers stable. Tegniek was in its own right an important attempt to provide Afrikaners with insight and information about business life, as Afrikaans newspapers published almost no business news in those years, not even stock exchange prices. Business news aimed specifically at the Afrikaans business community came mainly from Volkshandel, the magazine started by JG (Kaalkop) van der Merwe from Heilbron in the early 1940s.
For the first three months of the Ruperts’ marriage they lived with Huberte’s mother and stepfather in Krugersdorp before moving to Johannesburg where they rented a furnished flat in Joubert Park at fifteen guineas per month, half Rupert’s salary. Later they moved to 59 Auckland Avenue, a suburban house in Auckland Park, where they stayed until their move to Stellenbosch in 1946.
At one stage the couple shared the flat with Rupert’s younger brother Jan, then a clerk with a law firm in the city. The commercial artist Kobus Esterhuysen, from whom TIB rented an office, also moved in for a while − he had to sleep on the balcony. Esterhuysen, the brother of Joubero Malherbe, grande dame of the South African music world, was the designer of the country’s bank notes and also did freelance work for Voorbrand.
The office Rupert rented from Esterhuysen had only the most basic furniture and no telephone. When AGMs were held, chairs had to be borrowed to seat everybody. During the first year there was no money for directors’ fees or salaries. Huberte was for a long time the unpaid secretary, typist, clerk and messenger. Rupert’s principle was: ‘As long as we don’t have our own capital, we have to avoid costs.’ Huberte was a thrifty housekeeper and for many years made her own clothes − later their children’s as well until Hanneli was five years old. But as children of the Depression, they did not mind living frugally. ‘We knew that where one lives has nothing to do with the quality of one’s life,’ she said about those early days.1 ‘What did worry us, however, was that Anton should make something that produced no profit.’
Huberte saw her role as that of Anton’s helpmeet, companion and sounding board. ‘When he had a problem, he’d tell me about it. I’d listen and then he’d go out and solve it. The main thing was, I was in it with him. I learned the business from the inside.’
In the stimulating atmosphere of Johannesburg her life was a buzz of friends
