Other highlights (37)
“The chemistry student – who with a personal investment of a mere £10 started a worldwide group of companies that would make him a world-famous entrepreneur – is linked to some of the best-known international trademarks, the foundation on which his business empire is built. From Cartier, the ‘king of jewellers and the jeweller of kings’, to the luxury goods of Alfred Dunhill, from Mont Blanc’s stylish writing instruments to the oldest Swiss watchmakers, all fall under Richemont, the international arm of the Rupert umbrella. It was preceded by the establishment of a global chain of tobacco interests under the banner of Rembrandt and Rothmans, as well as the production of the most famous South African wines and spirits.”
“Both Rupert’s bothers would follow him to the Rembrandt Group. The three brothers in the tobacco industry have been compared to the three brothers Reemtsma in Germany and the three brothers Reynolds in the USA, who built up the biggest cigarette factories in their respective countries.”
“John Rupert impressed on him the importance of meticulous attention to detail, a virtue that Anton was to inculcate in his own children and employees in later life. He also taught him to be wary of praise: ‘Today they shout hosanna, tomorrow they crucify you.’ A compliment, he added, entailed responsibility: you had to live up to it. Among the values John Rupert imparted to his son was the importance of honesty and being true to one’s word.”
“‘I have often thanked Providence for things I didn’t get when I wanted them.’”
“They knew money could do a lot of good but it could also be the cause of great evil. ‘It is like a rope: it can be used as a lifeline to save a drowning person, or as a noose to hang someone. That is money. It talks.’”
“‘Your product could be good, and still be a failure if your sales organisation and distribution aren’t good.’”
“JS van der Lingen, who had worked under Albert Einstein in Europe. To Rupert’s amazement he declared categorically that Germany would lose the war. He argued that for all its technological expertise, Germany did not understand mass production. When the USA entered the war Germany would be flattened by bombardment from the air. Besides, said Van Lingen, the Germans always wanted to improve a product instead of mass-producing the armaments required in a war situation.”
“‘If you ever want to exercise control, you must first learn to obey. And the true test of obedience is not when you are in agreement but especially when you disagree. Jan Smuts has declared a war that you do not agree with. As you know, I do not agree either. But it was done legally under a constitution that I helped to write, so as law-abiding citizens we are bound by it. Smuts assured me that he would not conscript South Africans for duty beyond our borders. I told him if he introduced conscription or martial law I would personally lead you to the hills [i.e. head a rebellion]. I think he learned a lesson in 1914, he won’t repeat that mistake. ‘Now I am telling you: go back and prepare yourselves to take over. The wheel will turn and the day will come when you have to take the reins, and then you must be ready. Go back to your studies, do your duty and obey the law. And remember, whatever you do unto others will be done unto you.’”
“‘You are going to marry a leader of people, a man of whom we expect much. Decide early on that you want to be his helpmate. Someone must keep the home fires burning.’”
“‘Where there’s a will, there’s a way – the will itself becomes the way.’”
“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.”
“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 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.’”
“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.”
“‘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.”
“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.”
“‘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.’”
“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.”
“TIB was registered on 16 March 1943 and would eventually develop into a company with diversified interests in tobacco, liquor, coal mines, wool brokers, tea and coffee. Contrary to what is sometimes told in business circles, Rupert already started to diversify at a very early stage in his career.”
“In September 1943 he and one of his co-directors, Coenie (Oupa) Kriel, started making inquiries. In October they travelled to Paarl in the Western Cape where they met Canzius Pretorius, accountant of the Koöperatiewe Wynbouersvereniging (KWV). He advised them that the only way to enter the liquor industry would be to buy a Cape company, Forrer Brothers. With the aid of the company auditor, Roux van der Poel, they negotiated the purchase of a 50% interest for £17 500.”
“Rupert’s conviction that such people had no respect for wine was a major reason why he started promoting estate wines, and why he wanted the wine farmers to receive the honour due to them. His first estate wines were from the farms Montpellier, Theuniskraal and Alto. He also introduced the French and German custom of appellation contrôlée in South Africa, that is, labelling wines as products of a specific estate and its vineyards.”
“He crossed over to the new company at the time of the merger, when Voorbrand’s production assets and brand names were transferred to Rembrandt for a sum of £70 000. Voorbrand shareholders obtained a share in Rembrandt, which still continued to process pipe tobacco. Rupert himself was authorised to apply for shares of £70 000 in Rembrandt.”
“O’Neill-Dunne once commented on their struggle against the mighty UTC: ‘You two boys trying to bash British American Tobacco make me think of two fleas crawling up the back of an elephant with rape in their mind!’8”
“The cigarette industry was also boosted by the film industry. Ordinary people could not afford the yachts, fur coats and luxury goods displayed by Hollywood stars in films, but they could smoke the cigarettes their screen idols were enjoying so freely.”
“The caption of a drawing in the group’s offices depicting the race between the hare and the tortoise read: ‘It’s the last ten paces that count’.”
“Rupert went further. He threatened the secretary for trade and industry that he would close the factory in Paarl if he did not get his rightful quota. He also proposed sending girls in Voortrekker dresses to demonstrate at the opening of parliament, carrying posters with the slogan, ‘Quotas are killing us!’ and to picket there for up to a year. His threats caused quite a hubbub in government circles, supposedly well disposed towards Afrikaner business, and proposals were invited. These led to the introduction of a far more flexible system and the eventual abolition of quotas. Henceforth manufacturers could submit their own assessment of their requirements, which would then be adjusted up- or downwards twice a year, depending on their output in the preceding six months. The battle was won at last, and the increased ability to compete served as a further boost to Rembrandt.”
“Company vehicles, once they could afford them, were painted green and red and acted as mobile billboards, a brand-new technique at the time. Stationary billboards were put up at strategic points.”
“His maxim was a golden rule: ‘Advertising can never be simple, sincere and repetitive enough.’”
“Rembrandt’s financial statement at the end of the first year showed a loss of £63 000. Rupert has described it as ‘the most critical time in my life’. Yet he did not lose his nerve. ‘In times of crisis I am always calm.’16 The following year Rembrandt registered a profit of £104 000. Rupert denied that it was all merit: 99% was sweat, the rest was plain luck − factors beyond their control. But it was a turning-point just the same. After that they never looked back.”
“In the starting years Rupert not only sold shares with great enthusiasm, but also bought shares out of his own salary in the Rembrandt Trust, the holding company of the Rembrandt Group. Rembrandt Tabakkorporasie was listed on the Johannesburg Stock Exchange in 1956 and, like TIB and Tegkor, it became an investment of a lifetime.”
“In 1999 Rupert pointed out that shares of R1 000 in the Rembrandt Group bought in 1948 would be worth R17 million, not counting the dividends. In 2002 it was calculated that the first shareholders who bought shares of R1 000 would have earned a spectacular sum of more than R30 million, if the value of Remgro, Venfin and Richemont is included. Rembrandt has made many people millionaires with shares that have increased 3 000 000% in value. In a welcoming letter signed by Rupert that was sent to each new shareholder in the early years, he asked people ‘not to sell your shares lightly. Conserve them for your children.’ He heeded his own prophetic advice, and others who did likewise also reaped the benefits.”
“Despite Rembrandt’s increasing competitive edge and a rise in demand that necessitated extensions to the factory in Paarl, Rupert was aware of the fact that a price war could damage his group. He decided to extend his operations overseas in order to build up profitable new markets, and in the process also came up with innovations that left competitors behind and changed people’s smoking patterns internationally.”
“Rupert distinguishes innovative ideas and innovative products as two of the main reasons for the Rembrandt Group’s success. His innovative thinking was not just limited to the business sphere.”
“He was never happy about ordinary filter-tipped cigarettes, sensing that smokers subconsciously felt they were being short-changed, since the filter replaced some of the tobacco. So he came up with a brand-new idea: a king-size filter-tipped cigarette. He summoned his chief technician and gave him an ultimatum: within 30 days − not 90! − he had to modify the machines to produce the new format.”
“This was another typical quality of the entrepreneurial Rupert: he demanded much of his employees because of his belief that speed, timing and quality were crucial competitive advantages. With this sense of urgency, he would often remind his associates: ‘We are cats on a hot tin roof.’”
“Another sceptic was the biggest cigarette manufacturer in Europe, the German Philipp Reemtsma, who had met Jan Rupert in Hamburg in 1950 and was impressed with everything he saw and heard about Rembrandt. When he eventually met Rupert, the two men became firm friends despite initial language difficulties. A World War I pilot himself, Reemtsma had lost three of his sons during World War II. While he suspected that the enterprising young South African would become his main competitor, he asked himself: ‘What would you do for your own son?’ He decided to take Rupert under his wing and helped him in crucial ways.”
