Faber-Castell is one of the world's largest manufacturers of pens, pencils, othe r office supplies (e.g.

, staplers, slide rules, erasers, rulers)[1] and art supp lies,[2] as well as high-end writing instruments and luxury leather goods. It op erates 14 factories and 20 sales units (six in Europe, four in Asia, three in No rth America, five in South America, and one each in Australia and New Zealand). The Faber-Castell Group employs a staff of approximately 7,000 and does business in more than 100 countries.[3] Although its production began in Germany, only some of its premium pens are stil l manufactured there. Most of the company's consumer products are made in Brazil . Faber-Castell USA is headquartered in Cleveland, Ohio, and is part of the glob al network of Faber-Castell companies operating in countries such as Australia, Brazil, and Malaysia.[4] Statistics: Private Company Incorporated: 1784 as A.W. Faber Employees: 5,550 Sales: EUR 369 million ($278 million) (2001) NAIC: 339942 Lead Pencil and Art Good Manufacturing; 339941 Pen and Mechanical P encil Manufacturing; 339943 Marking Device Manufacturing Company Perspectives: The lead pencil keeps writing history in the 21st century. The pencil's unmistak able profile continues to evolve and supplements every modern means of communica tion, be it a mobile phone, Laptop or PC. Uncomplicated, robust, non-perishable, and environmentally friendly as it is, as a natural product, it is ultimately c loser to the writing human and his hand than cold keyboards. Unlike any other me ans of writing, mistakes made with it are correctable; it bears this provisional character to great advantage. Key Dates: 1761: Kaspar Faber begins making lead pencils. 1784: Anton Wilhelm Faber takes over the company, which is named A.W. Faber. 1839: Lothar von Faber takes over the family business. 1849: The company's first foreign subsidiary is established in New York. 1898: Lothar von Faber's granddaughter marries Count zu Castell-Rdenhausen. 1905: The CASTELL 9000 is launched. 1978: Count Anton Wolfgang Faber-Castell takes over as CEO. 1994: Faber-Castell re-acquires trademark rights in the United States. 2000: Industrial management holding company Faber-Castell AG is established. Company History: A.W. Faber-Castell Unternehmensverwaltung GmbH & Co. is the organizational umbre lla for the Faber-Castell Group, the world's largest and oldest manufacturer of lead and coloring pencils. Based in Stein near Nuremberg in Germany, the group m anufactures lead, coloring, and mechanical pencils; erasers and rules; a variety of pens, colored markers, and highlighters; and chalk, charcoals, oil, and soft pastels and paints for a broad range of customers--from children and students t o professional artists and CEO's. The group's industrial activities are organize d under the management holding Faber-Castell AG; its service arm, Faber-CastellConsulting, offers IT and management consulting services; and Faber-Castell Proj etos Imobiliarios is the group's Brazilian real estate development arm, founded in 1994. Faber-Castell AG generates 85 percent of total sales abroad and operate s 15 production plants and 19 distribution subsidiaries in 19 countries around t he globe. The largest among the company's subsidiaries is located near Sao Paulo

in Brazil, where every year some 3,000 employees produce 1.5 million wooden pen cils as well as about 1,500 other items, including decorative cosmetics products such as eye and lip liners, lipsticks, and eye shadow pencils under its own bra nd name and for other cosmetics companies. Faber-Castell Brazil also grows its o wn wood in a sustainable forestry project. CEO Count Anton Wolfgang Graf von Fab er-Castell owns 85 percent of the company that was founded by his ancestors. Foundation for Pencil Dynasty Set Up in 1761 The history of Faber-Castell began in Stein, a small town south of Nuremberg. Jo iner Kaspar Faber had settled in Stein and after a few years decided to make lea d pencils. He made the square wooden shafts, drilled a groove in them, inserted graphite sticks, closed the gap with a small piece of wood and glued it all toge ther. Finally, he gave the pencil a rectangular or oval form. Since stationary s tores did not yet exist in pre-industrial Germany, Kaspar Faber's wife frequentl y stashed the pencils her husband made in a basket and sold them at the market i n Nuremberg. There he competed with pencil maker Guttknecht who was also based i n Stein. Guttknecht tried to sue Faber out of his territory. This action failed because at that time pencil making was an unregulated trade. In 1784, Kaspar's son Anton Wilhelm took over the small workshop and incorporate d the family business as A.W. Faber. From his father's savings he was able to ac quire a larger property in Stein where the company's headquarters was still loca ted 228 years later. In 1795, a new law issued by the traditionally bureaucratic German craft guilds imposed strict rules on every aspect of the pencil making t rade. However, Anton Wilhelm carried on the family enterprise with much success and left his son Georg Leonhard a good-sized inheritance. Georg Leonhard Faber expanded the family property but struggled against unfortun ate events. The reign of Napoleon that followed the French Revolution of 1789 br ought more than 20 years of war and political unrest to Europe. Moreover, the pr ogressive exhaustion of the world's foremost source for graphite in England made the raw material for pencils more and more expensive, then unaffordable, and fi nally unavailable. Consequently, German pencil makers were pushed to use graphit e of bad quality, which consequently earned a bad name for pencils made in Germa ny. In 1806, Stein and Nuremberg became part of the newly founded Kingdom of Bav aria. The new government lifted some of the obstacles to free trade and allowed pencil makers from outside the city to sell their merchandise at the Nuremberg m arket. The old rule of the craft guild was ended in 1808. The new, more liberal trade law gave way to increasing competition among pencil makers. In 1839, Georg Leonhard Faber died at age 51. Success for A.W. Faber in the 19th Century Georg Leonhard Faber's son Lothar was 22 years old when he took over the family business after his father's sudden death. By that time, the enterprise had grown into a small factory with 20 employees. After his apprenticeship as a merchant, the young man had spent three years working in Paris. His witnessing of a thriv ing pencil-making trade in one of the world's major centers of free trade deeply impressed Lothar Faber. When he returned to Nuremberg, the city was just making its first steps into the industrial age, led by a new generation of business pe ople, engineers, and bankers. One of their first accomplishments was the first r ailroad in Germany which started operations between Nuremberg and Frth in 1835. There was much that needed improvement when Lothar Faber took over the family bu siness. In addition, the market for pencils made in Germany was very limited, ma inly because of their bad reputation. Middlemen dictated a price level that bare ly enabled pencil manufacturers to prosper. Nevertheless, Lothar Faber rolled up his sleeves and started making fundamental changes to the business that led to his success.

First of all, Faber significantly improved the quality of his pencils. He introd uced and refined the so-called clay-graphite process, a new technology that had been invented at the end of the eighteenth century. The graphite was ground and mixed with clay, formed into strips, and baked. This technology enabled Faber to offer pencils of varying hardness or softness. Next, Faber modernized his manuf acturing plant to ensure a steady quality and to increase the output and efficie ncy of his operation. Soon, a water-powered steam engine was driving the mechani zed saws and planes. Faber's factory was now outfitted for mass production. In another step, Faber focused on boosting the sales of his pencils. To distingu ish his products from those of other manufacturers, he printed "A.W. Faber" on h is pencils--a novelty at the time. Also, unlike any other pencil manufacturer, F aber--equipped with a beautifully carved wooden sample case--traveled through Ge rmany and Europe, personally promoting his merchandise. Confident about the high quality of his pencils, he demanded prices as high as top quality pencils from England. Surprised by Faber's high prices, a Nuremberg businessman is said to ha ve asked him sarcastically if his pencil mines were made from silver. But the yo ung entrepreneur stuck to his guns and got plenty of orders on his promotional t rips through Germany, Austria, Belgium, the Netherlands, France, England, Italy, and Russia. Within ten years, Faber had created a network of trade partners in many countries. In 1849, he sent his youngest brother, Eberhard, to the United S tates, where he established the company's first foreign subsidiary in New York. Soon after, A.W. Faber set up sales offices in Vienna, London, Paris and St. Pet ersburg in Russia and expanded its market as far as Africa, Australia, India, th e Middle East, and China. In the second half of the nineteenth century, the world's major supplier of high -quality graphite--the ore that looked like lead and therefore gave the lead pen cil its name--the English Cumberland mines ran out of the material. Geologists s tarted searching for new deposits in many parts of the world and one of them, Jo hann Peter Alibert, spotted a rich graphite deposit of high quality in Siberia, Russia, in 1847. Nine years later, Alibert sold Faber the exclusive rights to ex ploit the mine. This deal secured the company's raw material base for many years to come and gave it an independence and competitive advantage that ultimately l ed to Faber's market leadership. Becoming the Market Leader Lothar Faber's efforts paid off. His company was flooded with orders, so product ion capacity had to be expanded. With A.W. Faber's growth, its host community gr ew as well. Lothar Faber initiated and sponsored the construction of housing for his workers, a kindergarten, and even a church in Stein. In 1862, Bavarian King Maximilian II made Lothar Faber a peer by giving him the inheritable title of " Freiherr" and three years later appointed him Imperial Counselor to the Bavarian Crown. The entrepreneur who was now called Lothar von Faber as a sign of his no bility, stayed actively involved in local and regional politics for the rest of his life. His main focus, however, was on becoming the world's number one pencil maker. Two of A.W. Faber's emerging competitors came from his own family--Lothar von Fa ber's two brothers, Johann and Eberhard. Eberhard, who managed A.W. Faber's New York office, started his own pencil company, Eberhard Faber, Inc., on the side. In 1876, Lothar's brother Johann, who had been sent to South America to explore the unknown market for A.W. Faber, left the family business to set up a pencil c ompany of his own. To stay on top of the market and to further enhance product quality, Faber estab lished a number of standards for his pencils. He distinguished them by length, g rades of hardness and other criteria, and gave them a hexagonal shape. His Siber

ian graphite, which was transported long distances on the backs of reindeer thro ugh undeveloped wilderness to the closest sea port, was of the best quality avai lable at the time. Lothar von Faber also attempted to gain independence from mid dlemen for his second crucial raw material--cedar wood, which he obtained from C alifornia because his cedar plantation in Stein yielded wood that was too hard f or use in pencils. Another of Faber's strategies to grow the company was the expansion of his range of products. One of the new markets he developed was colored pencils for artist s' use. Over time, Faber's catalogues grew to over 70 pages. Designed to emphasi ze the company's high-quality image, they were available in German, English, Spa nish, and Russian. By the late nineteenth century, Nuremberg had become the world's center of penci l manufacturing, with 25 factories putting out 250 million lead pencils a year. A.W. Faber, the largest of them, employed a workforce of 1,000 and an additional 300 home workers in 1890. Faber's success, however, attracted competition. The company's brand name "A.W. Faber"--a synonym for top quality--was frequently imi tated. To protect himself from this practice, Lothar von Faber drafted and promo ted a petition in 1874 demanding that the German Imperial parliament recognize a nd protect brand names. A law based on Faber's suggestions passed the governing body a year later and paved the way for a unified German trademark law. By the 1 890s, the tensions between Eberhard Faber, Inc. and A.W. Faber had grown and esc alated in a law suit over the trademark. Getting Ahead Between World Wars When Lothar von Faber's era ended with his death in 1896, the company was left w ithout a male heir. Since Lothar's only son, Wilhelm, had died before him at age 41, he was succeeded by his wife and later by his granddaughter Ottilie von Fab er. In 1898, Ottilie married Count Alexander zu Castell-Rdenhausen, a descendant o f one of Bavaria's oldest noble families. Alexander became a new shareholder in the family business. Count Alexander, who had no experience in doing business as a pencil manufacture r, made strategic decisions but left the day-to-day operations to the company's experienced directors. However, under his leadership the company introduced CAST ELL 9000, a new lead pencil line with a green coating that became a huge success . CASTELL 9000 emerged as A.W. Faber's single best-selling article and remained a flagship product for almost 100 years after it was launched in 1905. In the sa me year, the company introduced an advertising poster showing a "pencil tourname nt"--two knights on horses fighting with huge pencils instead of lances--that wa s used to publicize the new "noble" image. The popular motive also became part o f the company's stationery. Between 1903 and 1906, a castle was erected in Stein that became the company's new headquarters. From his huge study on the first fl oor, overlooking the production plants, Count Alexander steered the family opera tion with a global reach. World War I, which broke out in 1914 and ended with Germany's defeat in late 191 8, suddenly interrupted the company's growth. Moreover, with the United States e ntering the war in 1917, A.W. Faber was cut off from this major market, where th e company lost its production facilities and sales offices. When the German econ omy entered a short growth period in the second half of the 1920s, Faber-Castell 's production facilities were once more expanded. After Count Alexander died in 1928, his son Roland took over the enterprise at age 23, and the company was tra nsformed into A.W. Faber, Castell-Bleistiftfabrik AG. The early 1930s turned out to be a crucial time for A.W. Faber. In 1931, the com pany entered a cooperation agreement with Nuremberg-based Johann Faber AG, the c ompany that was founded by Lothar von Faber's brother Johann in 1878. Since then

, Johann Faber AG had become a fierce competitor of A.W. Faber. In the following years Johann Faber's manufacturing operations were moved to Stein and integrate d into A.W. Faber's. Another action that insured the company's continued world m arket leadership was the acquisition of an interest in Johann Faber's production subsidiary in Sao Carlos, Brazil, which was the largest of its kind in South Am erica, in 1937. The outbreak of Word War II two years later once more interrupte d the company's development. Throughout the conflict, Faber-Castell, which by th at time had been transformed into the legal form of a public stock company, was put under the leadership of an out-of-family CEO appointed by the Nazis, while C ount Roland von Faber-Castell was drafted into the German army, leaving him with no influence over his company. During the war, however, his wife Nina managed t o transform the company back into a sole proprietorship, which was renamed A.W. Faber-Castell in 1942. Changes in the Second Half of the 20th Century The bombing raids on Nuremberg had left Faber-Castell's premises almost untouche d, and in 1946 the company resumed operations. The period after World War II saw Germany recover in record time. Throughout this period of enormous economic ups wing, interrupted only by short recessions, Faber-Castell profited from the coun try's double-digit growth rates. In 1949, the company ventured into manufacturin g ball point pens and afterwards kept expanding its product range, workforce, pr oduction capacity, and distribution network. Faber-Castell's product range grew to about 5,000 articles, including technical drawing instruments. In 1967, the c ompany was able to acquire a majority stake in Lapis Johann Faber, the world's l argest factory for lead and colored pencils in Sao Carlos, Brazil. The "economic miracle" years of the 1950s and 1960s were followed by the oil crises of the 19 70s, which brought about a flood of technological innovations. One of them was t he electronic pocket calculator that within a short time period replaced the sli de rule, a product area in which Faber-Castell had achieved world market leaders hip. Two years before he died in 1978, Count Roland had chosen his son Anton Wolfgang as his successor among his ten children. The 35-year-old attorney, who had atte nded Swiss business schools and gathered practical experience working at investm ent bank Credit Suisse First Boston, seemed to be the best choice to become the new Faber-Castell CEO. After his father's death, Count Anton Wolfgang put a rene wed emphasis on profitable, environmentally friendly products of top quality. Fi rst, he streamlined the company's operations. The production of unprofitable art icles was ceased and the product range slimmed down. To replace the lost busines s from slide rules, Faber-Castell started producing make-up pencils for internat ional cosmetics companies. During the 1980s, the company expanded its product ra nge to felt tip pens, such as markers and highlighters. Early in the decade, Fab er-Castell initiated a pioneering sustainable forestry project for its subsidiar y in Brazil. To be independent of other suppliers, the company established its o wn growth of Caribbean pine trees about 240 miles away from its Sao Carlos produ ction plant in the Brazilian savanna. On 27,000 acres, Faber-Castell grows its o wn wood, which can be harvested after ten to fourteen years and used for making lead and colored pencils. The plantation, which was set up in the Minas Gerias p rovince on former grazing land with dry, sandy soil, also includes a nursery tha t plants about two million pine trees a year. The 1990s saw the company once more reinvent itself. While its Brazilian subsidi ary was profitable, the German production slipped into the red in 1992 and 1993. Faber-Castell laid off about 30 percent of its German workforce and worked on i mproving the company's image. Marketing research had shown that the Faber-Castel l brand name was well known but not necessarily associated with "exclusivity." T he company redefined its core competence in a handful of product categories and gave its products a more upscale look. Faber-Castell communicated its focus on t radition and high value with a new image campaign. The company's redesigned logo

included the "pencil tournament" motive that had boosted Faber-Castell's popula rity at the beginning of the century. Along the same lines, the company also int roduced the "Count von Faber-Castell Collection," a luxury set of five pencils w ith a silver grip and sharpener in a wooden box made from rare wood and a silver cover which sold for over $100. The "noble collection" was later extended to in clude mechanical pencils, fountain pens, and blotters. In 1994, Faber-Castell re -acquired the trademark rights the company had lost in the United States as a re sult of World War I. In exchange, A.W. Faber-Castell sold the 25 percent stake R oland Count von Faber-Castell had acquired in its former U.S.-subsidiary Faber-C astell Co. after World War II. Faber-Castell Co.--in the meantime under independ ent U.S. management--had taken over Eberhard Faber Inc. in 1987. In the second half of the 1990s, the company established new production plants a nd sales subsidiaries in countries around the globe, including the Czech Republi c, Colombia, India, and Costa Rica. A new distribution center for the Asian-Paci fic region was set up in Singapore in 2000. In the same year, a new management h olding company for the company's industrial activities, Faber-Castell AG, was es tablished. The new century saw another Faber-Castell innovation--the silver-colo red triangular-shaped lead pencil Grip 2000, which featured lacquer bumps for a firm grip. In the summer of 2001, the company celebrated its 240th anniversary a nd launched a limited edition of its premium sets, including a pencil with an ex tender made from massive white gold and a cap with three embedded diamonds. For the cost of a small car, the sets sold out within a short time. After a first experiment to sell Faber-Castell products over the Internet failed , Count von Faber-Castell was looking for new distribution channels to expand th e company's markets. At age 60, he had not decided yet if his 21-year-old son Al exander, who was studying in the United States, might take over his global famil y enterprise, or if taking Faber-Castell public was the better choice. Principal Subsidiaries: Faber-Castell AG (Germany); A.W. Faber-Castell Produktio n GmbH (Germany); A.W. Faber-Castell Vertrieb GmbH (Germany); Faber-Castell COSM ETICS GmbH (Germany); A.W. Faber-Castell Brasil S.A.; A.W. Faber-Castell Argenti na S.A.; A.W. Faber-Castell (India) Pvt. Ltd.; A.W. Faber-Castell (Aust.) Pty. L td. (Australia); Maderin ECO S.A. (Costa Rica); A.W. Faber-Castell (Guangzhou) S tationery Co. Ltd. (China); A.W. Faber-Castell Peruana S.A. (Peru); Tecnacril Lt da (Colombia); PT. A.W. Faber-Castell Indonesia; A.W. Faber-Castell (M) Sdn. Bhd . (Malaysia); Faber-Castell Projetos Imobiliarios (Brazil); A.W. Faber-Castell U SA, Inc. Principal Competitors: Schwan-Stabilo Schwanhusser GmbH & Co.; STAEDTLER Group; LY RA Bleistift-Fabrik GmbH & Co.; Dixon Ticonderoga Company; Newell Rubbermaid Inc .; Caran d'Ache SA; Parker Pen Co; Montblanc International GmbH.