World Business: Watch His Smoke

Living evidence of the ease with which South African business has shrugged off the boycott is Tobacco Magnate Anthony Edward Rupert, 46. To stockholders in South Africa’s Rembrandt Tobacco Corp., Rupert last week reported record profits of $4,500,000 for the business year ended last June. Abroad, Rupert’s empire is flourishing on an even grander scale. Rembrandt included, his growing chain of tobacco companies, which now stretches from Ireland to Malaya, last year turned a pre-tax profit of $23.8 million on $560 million in sales. Though his business is barely 20 years old, Anthony Rupert today makes one out of every 50 cigarettes smoked in the world.

Rupert’s rise is all the more remarkable because he is an Afrikaner. Traditionally in South Africa, the Dutch-descended Afrikaners tend the farms while English-speaking South Africans tend to business. Though Afrikaners run the country politically, only 6% of South Africa’s industry is Afrikaner-owned; the other 94% is controlled by English-speaking South Africans and foreigners.

A King-Size Boost. Rupert, who started out as a university chemistry instructor, got into business out of a vague desire to do research into tobacco and to “manufacture something.” In 1942, with a $40 grubstake, he opened a tiny tobacco shop in Johannesburg. Not until after World War II was he able to scrape up enough capital and equipment to mass-produce cigarettes—and when he did, he nearly went broke. He staved off disaster only by persuading London’s Rothman of Pall Mall to allow him to make and market their brands (Pall Mall, Consulate) in South Africa.

It was research that turned the tide. Puttering in his factory laboratory, Rupert devised what he claims was the world’s first king-size filter-tip cigarette. The new cigarette boosted Rembrandt sales so much that in 1953 Rupert bought out Rothman’s South African operation. The following year he bought control of the British parent company too.

Using Rothman as a base, Rupert began setting up subsidiaries throughout the Commonwealth. His shrewdest move came in 1958. Capitalizing on a peculiar stock arrangement in London’s venerable Carreras Tobacco Co. (Craven A), he won control of the company for only $4,500,000, quickly sold off antiquated factories for $15 million to finance a modernization program.

“A Light-skinned African.” Rupert believes in the twelve-hour workday, has been known to hole up in a London hotel suite for six solid days, running one business conference after another without ever going outdoors. Suave and friendly in social situations, he is blunt about business. Once during a slump in cigarette sales in South Africa, Rupert called in his salesmen and told them that if the slump continued, he would fire them before he fired production workers. Sales picked up almost immediately.

Rupert shuns South Africa’s bruising party politics, and despite his Dutch ancestry, bristles at being called an Afrikaner. “I’m a light-skinned South African,” he snaps. “Leave it at that.” No friend to racial integration, Rupert campaigns actively for white immigration to bolster South Africa’s small (3,000,000) white population. But, like many other South African businessmen, he opposes the government’s drive to isolate the country’s Africans in all-black enclaves, economically and politically separate from the white community.

Whenever he opens a plant abroad, Rupert insists that 50% of the capital come from local investors to ensure local support. Ultimately, he would like to bring Africans in as shareholders in his South African enterprises. Says Rupert: “Many of us are beginning to realize that if we help the dark man rise, we shall rise with him; but if we hold him down, he will pull us down with him.”