Faber-Castell is one of the world’s oldest companies still in the hands of its founding family. But far from being bound by tradition, it has achieved success by constantly reinventing one of the simplest writing implements, the pencil, as Christian Sylt discovers
When cabinet-maker Kasper Faber carved his first pencils and began selling them at the Nuremburg market in 1761, he surely had no idea that nearly 250 years later not only would his descendants still be in the business, but they would have turned into a global luxury brand. But that is precisely what Faber-Castell has become.
The company modestly refers to its latest creation as the ‘Pen of the Year’, and if the award is for being lavish, it certainly deserves top honours. The nib is made of 18-carat gold and the cap and barrel are platinum inlaid with plates of rare wood. The individually numbered pen will only be on sale until the end of the year and sells at the princely price of €2,500. While the bulk of Faber Castell’s revenue comes from pencils, diversifying into luxury pens has not only kept the company’s product line modern but also brought some of its fattest margins. Its luxury lines contribute heavily to the €26m profit that Faber-Castell is believed to have made in 2005 on turnover of around €220m.
Faber-Castell is the world’s largest pencil manufacturer, with an annual output of over two billion units and 6,500 employees. Against the odds, it is still in family hands and chief executive, Count Anton Wolfgang von Faber-Castell, has not only kept the company in profit but also maintained its reputation for innovation.
The company devised the first system for classifying the softness of graphite and was also the first to make six-sided pencils that don’t roll. They’re touches we’ve all become used to over the past 100 years and Faber-Castell is still working on new ones. In 2001 it reinvented the wheel by launching a three-sided pencil called the Grip 2001. The award-winning pencil has a futuristic look thanks to rows of easy-to-clutch raised dots adorning its silver shaft. Far from being just a design statement, the ergonomic triangular shape prevents writer’s cramp while the raised dots stop it from slipping between the fingers.
It took Faber-Castell 100 years to rise to prominence. In the 1840s Lothar von Faber took charge. “Lothar brought the company to fame,” says the Count, a dashing 66-year old who lives between the Hamptons in the US and his ancestral castle opposite the factory in Stein, near Nuremburg.
Lothar’s eldest granddaughter, Ottilie von Faber, married his grandfather, Count Alexander zu CastellRüdenhausen, thereby giving birth to the name Faber-Castell. Control of the company passed to the Count’s father, Roland, in 1928. Although Count Anton had done an apprenticeship with Faber-Castell, when he was 28 he left to work for Credit Suisse First Boston in New York. Eight years later he returned after his father fell ill, but he admits: “I didn’t want to go back because I knew the risks.”
He says that trying to implement new ideas would often lead to arguments with his father, but after he died in 1978, the Count finally had free rein. His first goal was to bring the ageing company up to scratch. “I tried to streamline and modernise the product range and become more international instead of depending heavily on the German market,” he says.
“At the beginning of the 1980s, I tried to move away from the black lead pencil and go more into colouring,” he says. Faced with tough competition from Far Eastern manufacturers, this proved to be a prudent decision and helped Faber-Castell weather subsequent recessions.
The Count had a two-pronged plan to take the company into previously uncharted territory for a pencil company: children’s stationery and luxury goods. Manufacturing products for children is vital for the long-term security of the company because, as the Count says: “These are the adults of tomorrow and Faber-Castell would like to be their companion for life.”
At the other end of the spectrum, the Count had the vision of turning Faber-Castell into a premium brand by launching a range of luxury pencils. These allow the company to weather any economic downturns because they command higher prices and generate greater profits than the mass market pencils which made its name. The jewel in Faber-Castell’s crown is its Perfect Pencil. It has a stained wood shaft made from Californian cedar with a silver-plated extension that serves as a pocket clip, a sharpener and a protector.
The basic model sells for a trifling €135, but it had a diamond-studded, gold-plated big brother selling at €9,000 each – a far cry from the €0.75 the standard Grip pencil goes for. This is aimed squarely at the high-net-worth buyer for whom Rolex watches and Italian sports cars are the norm. There aren’t many out there, but limiting production keeps its cachet and, with rich returns per piece, this is all that’s needed. Proof of this strategy was the sell-out of all 99 of the limited edition top-level Perfect Pencils.
To showcase the prestige of his new pencils, the Count has on several occasions turned to the fashion industry. In 2001, he commissioned a fashion collection from London-based designer Arkadius. The company repeated the trick two years later when milliner Cozmo Jenks, designer of hats for Jay Kay and Kylie Minogue, produced a collection of six hats made with over 2,000 Faber-Castell pencils. It has given Faber-Castell’s luxury line a cachet usually associated with jewellery.
However, the Count hasn’t forgotten where the company came from. Faber-Castell has been discussing how to move the company forward and the next generation of pencils will have as much of an emphasis on fun as on functionality. “We are thinking about creating special effects with the leads and making the pencil more attractive,” he says.
“Asia Pacific is the market of the future for Faber-Castell” adds the Count explaining that “the brand is largely undeveloped there and the need for education in the region is constantly increasing, so we can tap into a new generation of pencil users”.
Buying a brand to expand closer to home could also be on the horizon. “We would like to expand more in the UK and France,” says the Count, adding that any acquisition wouldn’t be rebranded with his famous logo of knights jousting with pencils. “I would only buy a brand if I am willing to keep the brand,” he says, stressing the value of local customers.
But the Count may have to search for a successor to take his plan to fruition. Although he has a son who is approaching the age at which he first began working for the family company, the Count remembers his own experiences and isn’t putting any pressure on him to follow suit.
Successors aside, with such a firm grip on its marketplace, it’s perhaps surprising that Faber-Castell is still in private hands. The Count says he turned down an opportunity to float on the stock market because the increased demands would “take time away from developing the business”, and the pressure to show short-term earnings per share could prejudice the possibility of “pushing long-term strategies through.”
These two foundations of the future of Faber-Castell are as close to the Count’s heart as a pencil is to his pocket, and Faber-Castell’s pencils seem set to go on for another two centuries.
FR » Affaire à la pointe
Depuis que Kasper Faber se mit à vendre, il y a de cela 246 ans, des crayons au marché de Nuremburg, Faber-Castell est devenue depuis lors la plus ancienne compagnie familiale du monde, toujours aux mains de ses héritiers.
Leur dernière création, le ‘Crayon de l’Année’ se compose d’or 18-carats, de platine et d’essence de bois rare, pour la modique somme de € 2 500. La société produit deux milliards de crayons par an, emploie 6 500 personnes et a réalisé, selon les estimations, un bénéfice de € 26m en 2005.
Il aura fallu 100 ans à Faber-Castell pour accéder à ce niveau de notoriété. Dans les années 1870, le nom de la firme devint célèbre après avoir été gravé sur ses crayons, devenant ainsi le premier produit de marque de l’histoire de l’industrie. Et lorsque Ottilie von Faber épousa le Comte Alexander Castell, Faber-Castell était né.
Malgré un passage dans la firme, le CEO en place, le Comte Anton-Wolfgang a décidé de rejoindre le Crédit Suisse First Boston, et n’est revenu qu’au moment où son père se sentait malade. “Je ne voulais pas repartir car je mesurais les risques,” confie-t-il.
Après le décès de son père en 1978, le Comte a réorienté et modernisé la société, aux prises avec une importante concurrence des pays asiatiques. Faber-Castell a développé une nouvelle niche dans le matériel scolaire et dans les produits de luxe, dont les marges élevées permettent de faire face aux soubresauts du marché.
Son emblème est le ‘Perfect Pencil’, fait de bois de cèdre de Californie avec une extension plaquée argent. L’édition limitée, plaquée or et sertie de diamants à €9 000, est épuisée. La société a également fait équipe avec des stylistes de mode dans la perspective d’étendre le rayonnement de la marque.
L’émission d’actions n’est pas encore à l’ordre du jour, vu que les demandes financières pourraient affecter la stratégie de la compagnie à long terme.
NL » Een punt maken
Ruim 246 jaar nadat Kasper Faber zijn potloden op de markt van Neurenberg sleet, is Faber-Castell een van ’s werelds oudste familiebedrijven.
De nieuwste creatie van Faber-Castell, de ‘Pen van het Jaar’, is gemaakt van goud, platinum en zeldzaam hout en kost 2500 euro. Het bedrijf produceert twee miljard potloden per jaar, stelt 6500 mensen tewerk en zou in 2005 26 miljoen euro winst hebben gemaakt.
Het duurde 100 jaar eer Faber-Castell de top bereikte. Het bedrijf werd bekend in de jaren 1870 door als eerste zijn naam op de potloden te zetten, meteen het eerste merkproduct in de sector. Na het huwelijk van Ottilie von Faber met graaf Alexander Castell ontstond Faber-Castell.
Hoewel hij stage liep in het bedrijf, koos de huidige CEO, graaf Anton-Wolfgang, eerst voor een carrière bij Credit Suisse First Boston. Hij keerde pas terug toen zijn vader ziek werd. “Ik koos niet meteen voor het bedrijf omdat ik de risico’s kende”, geeft hij toe.
Na zijn vaders dood in 1978 moderniseerde de graaf het bedrijf om de concurrentie met het Verre Oosten aan te kunnen. Faber-Castell ging tekenmateriaal voor kinderen en luxeartikelen produceren, met winstmarges die beter bestand zijn tegen economische malaises.
Het paradepaardje is het ‘Perfecte potlood’, van Californisch cederhout met een verzilverde dop. De met diamanten bezette en vergulde beperkte oplage van € 9000 was snel uitverkocht. Het bedrijf werkte ook samen met modeontwerpers voor meer merkbekendheid.
Een beursgang wordt voorlopig afgehouden, omdat financiële eisen de langetermijnstrategieën zouden kunnen schaden.
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