The man who produced the 'perfect pencil'

When Count Anton Wolfgang von Faber-Castell joined the family pencil firm, he only intended to stay for two years. But his father offered him full control. And in 1998, he launched the 'perfect pencil', retailing at up to $9,000.

Count Anton Wolfgang von Faber-Castell took over the 249-year-old family company in 1978 and promptly ignored advisers who told him to embrace the digital age. Today, Faber-Castell remains one of the world's leading manufacturers of pencils, producing around two billion of the estimated ten billion that are sold each year. It has a workforce of 6,500 and a turnover of around €450m. The pencil still defies obsolescence they are cheap, portable and never crash or dry out. They also work in "outer space, underwater and everywhere in between".

It was an ancestor of the Count's, Lothar von Faber, who transformed his great grandfather's family business "from a cottage industry into a global empire" in the 19th century, says Michael Woodhead in The Sunday Times. He set exacting standards for a pencil's length, thickness and hardness, introduced the grading of leads and mechanised the industry. Producing the highest-quality pencil in the world made Lothar a multi-millionaire and led to his ennoblement by Ludwig II, the King of Bavaria. In 1898, Lothar von Faber's granddaughter Ottilie married into the aristocratic family of Castell, giving rise to the name Faber-Castell.

Eight generations on, the 69-year-old Count Anton is writing one of the most successful chapters in the firm's history and proving that modern-day pencil manufacture is not simply a "commodity business", says The Economist. In the face of fierce price competition from Asia, Faber-Castell continues to innovate while maintaining quality. In 1998 the Count launched the luxurious Graf von Faber-Castell range including the unabashedly expensive Perfect Pencil, which comes with a silver-plated extension that serves as a pocket clip, sharpener and eraser. The basic model sells for $250, but 99 limited edition diamond-studded versions were snapped up for $9,000 a pop. The design of the award-winning Grip 2001 pencil, with its triangular shaft and easy-to-clutch raised dots, remains a secret.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The Count is "the embodiment of his firm's brand: a tall, patrician figure, usually in a well-tailored suit" and a "darling of German society magazines", according to Malika Browne in Scotland on Sunday. Yet as a young man, Anton had no interest in running a pencil company and after training as a lawyer led a racier life in New York as an investment banker for Credit Suisse. As one of ten siblings (Anton was the second oldest of his father Roland's second marriage), he was reluctant to get involved in a succession battle, but when his father fell ill he returned home to stop the family firm getting "on to the wrong track". He intended to stay two years, but took over after his father offered him full control. Only one other sibling, Andreas, works for the firm but Count Anton insists that, in spite of his 88% shareholding, the others "can't complain financially".

No dilution: the family's secret of survival

The Faber-Castell empire is shaped by Count Anton's "patrician style", says Michael Woodhead in The Sunday Times. His concern for the welfare of his employees is a "throwback to his forebear's Victorian paternalism". He complains that modern capitalism too often serves the short-term interests of the CEO and board members rather than the long-term interests of the company, or those of the employees.

Indeed, "a distinctly family feel pervades everything Faber Castell does", says Malika Browne in Scotland on Sunday. In the 19th century, under Lothar, Faber Castell built a church and school for its employees and became the first firm to provide a health insurance scheme. Today, in Brazil, where most of the firm's products are made, managers are offered a full MBA degree sponsorship and workers belong to a Faber-Castell leisure club. The firm will also pay them to learn English, or to read in their native Portuguese. The Count was also "rather ahead of the pack" environmentally, says The Economist, creating 10,000 hectares of sustainable pine forest in Brazil for pencil wood back in the 1980s and building a big natural rubber factory in Malaysia. The firm still plants 2.5 million saplings each year as part of its reforestation programme.

Count Anton's rise doesn't seem to have angered his siblings. His brother Andreas, the only other family member to work for the firm, says that keeping ownership in fewer hands is the secret to survival. "A company is never destroyed from the outside, but from the inside," he tells The West Australian. At Faber Castell, a majority shareholding has always remained with one family member to avoid dilution and family squabbling. It remains to be seen whether Count Anton's only son, Charles, will follow in his father's footsteps. Whoever does take over, Count Anton's ambition not to be the weakest link in the family chain has already been realised.