WoodChuck on Fishing

Well I’ve finally got most of the year end work out I brought on vacation of the way. The tree hunt was successful and the Christmas tree is now decorated. So it’s time for the real vacation to begin. And time for the real fun, salt water fly-fishing in Little St. Simons Island creeks and rivers. Love those Redfish and Spotted Sea Trout. Just spending the day out on the creeks, trudging the marshes, catching fish with friends and family has a refreshing effect on your outlook after a long, arduous year. A couple of day’s back we had a wonderful afternoon on Mosquito Creek at what we affectionately call “The Honey Hole”. Five of us must have caught forty or fifty fish in a couple of hours. What’s really surprising is that we didn’t even keep one fish to cook up for dinner or fry for breakfast we were having such a good time catching and releasing them all back to the creek.

To get set in the right mind for our angling this holiday I began reading “Hemingway on Fishing” a few nights back. The book features a selection of excerpts from some of his short stories, novels and journalistic pieces that demonstrate Hemingway’s deep love and understanding of the fisherman’s experience. And a consummate fisherman he was in addition to his writing talent. I myself have never been accused of writing simple prose. I’m generally, the king of the run-on sentence. But Hemingway inspires so I thought I’d add a small bit to the Timberlines on fishing Little St. Simons.

Of course a fisherman can’t go anywhere with out his essential tools and this year I’ve added a few new ones to my kit. Yes, that’s my pocket Moleskine, my Palomino HB and even a KUM sharpener which I rigged to a lanyard along with my other essentials. Yep, I’m now the envy of outdoor artists with that sharpener ever at hand. Slides right into my vest pocket along with pencil and sketchbook. That Palomino won’t go dull when I record my thoughts or capture a quick image when I catch a 5 minute break from the action in the water.

I even got a couple quick sketches in today. The first is of my dad driving the boat out the Hampton River. The wind was up a bit so it was tough sketching while bouncing along the river at 30 mph. Perhaps this should become a new artistic training activity, Extreme Bump Speed Sketching. It can complement Blind Contour Drawing for building your skills. We didn’t catch any fish before lunch, although we did have a Bottlenose Dolphin surface about 5 feet from the boat. I’ll bet he got some lunch at our expense. It was nice just the two of us though, must savor these moments. Don’t get enough opportunities to spend quality time with dad.

The second sketch was drawn while fishing deep in Sancho Panza Creek after our beach picnic lunch back on the island. There’s another literary reference for any Quixote fans out there. “Sanko” as we call it, is just a small creek at this point in the high marsh bounded by saltwort and small clumps of Spartina grass. The fish ride the incoming and outgoing tides following the baitfish, shrimp, mud minnows or whatever the hors d’oeuvres du jour may be. I hoped today’s treat would do the trick, my “Nix Epoxy Fly” with white and green flashing and beaded red eyes.

We were a bit early for the tide turning back out to sea. After an hour of no activity we gave up the ghost on a slow fishing day, crossed the marsh to the Middle Woods Trail and walked the mile or so back to the Hunting lodge through the mixed pine and oak maritime forest. We came across a buck and doe that bounded out of sight into a large clump of Palmettos that provide good cover in these forests. It was a nice walk and a relaxing time with my father. Then his cell phone beeped.

As luck would have it thirty minutes after we left our fishing this afternoon my brother and his father-in-law arrived to the same spot on Sancho and caught nine or ten fish in about 30 minutes time.
Note: For any fishing or Christmas tree fans I’ll be positing some additional photos on my Flickr site in next day or so. Hope your all having a great holiday.

Have a Very Cedar Christmas

Well here we are again on Little St. Simons Island, Georgia for the holidays. A yearly tradition and sojourn for family Berolzheimer. In another day or two the remaining family members will arrive and well set off for our annual Christmas Tree hunt. I call it a hunt as that’s just what it takes to find a suitable holiday tree on Little St. Simons. No plastic Chinese produced tree or perfectly proportioned fir from the Christmas tree lot for us. Always a naturally grown Southern Redcedar, cut fresh from our own property.

Now a cedar, or more properly in this case a juniper, is not your typical Christmas tree. More a bush than a tree in this coastal barrier island environment, the Southern Red Cedar is not the prototype ornament hanger with its scrappy, lightweight branches. A one hour pickup truck ride and hike, bundled up against the cold, looking for something resembling the traditional conical shape, stopping here and there, inspecting possibilities, casting our votes, lobbying amongst one another for which tree will work best for us this year. The most well proportioned trees we find are always too big even for our central high ceiling location. The smaller ones tend to have some natural defect from growing too close together or up against a prickly pear or Myrtle bush, only discovered upon closer inspection. Finally, we choose and cut, always a compromise from the ideal. A picnic lunch follows and the late afternoon and evening are spent propping up the tree, hanging lights and ornaments even wiring it to the wall so the excessive ornament weight doesn’t tumble the tree to the floor. The result though not the mainstream “perfect tree” is our own form of perfection.

Often we consider whether we might simply take a half acre or so to plant and properly manage a number of trees including more suitable Christmas tree species so we can have better trees in future years. Of course the cedar tradition is in our blood as a family and here at Little St. Simons Island. Originally the property was purchased by the Eagle Pencil Company (LSSI Timeline see 1908) to harvest the taller commercial size Southern Redcedars (Juniperus Virgniana subspec Silicicola)for pencil wood supply back in the days when it’s cousin the Eastern Redcedar, Juniperus Virginiana, was the preferred species by pencil manufacturers. However growing conditions for commercial size Cedars were not ideal and the economics of harvesting on and transporting from an island proved. Instead the property has become a family retreat and now can also be your private Island hideaway.

While we have not chosen to become Christmas tree farmers over 21,000 other owners have nationwide. A little research at the National Christmas Tree Association website yields some of the following interesting facts:

- There are from 500,000 acres of commercial Christmas tree farms in the United States which sell from 25-30 million trees each year.
- The most common species are balsam fir, Douglas fir, Fraser fir, noble fir, Scotch pine, Virginia pine, and white pine.
- Every acre of Christmas Trees grown produces the daily oxygen requirement for 18 people.
- Beyond being a renewable resource increasing number of real Christmas trees are recycled each year. Find a recycling program here.
- The average artificial Christmas tree of which China produces 80%, are used for 6-9 years before ending up in a landfill, though I suppose there may be some recycling opportunities growing for these imitators.
- A Real Tree is five time more environmentally compatible than a plastic tree, according to this study by Swedish researchers.

So good luck with your Christmas Tree hunt this year if it’s still to come. Choose wisely and if you can try a cedar or at least a few Palominos, Forest Choice of Golden Bears under the tree if the real thing is not an option. Most importantly enjoy a wonderful and joyous holiday season

SwarmSketch: Collective sketching of the collective consciousness

It's not pencil, but an interesting experience in group collaboration or tug of war depending upon your perspective.

So if you haven't got the patience today to work on your own pencil drawing here's a change to contribute just one line to the daily Swarmsketch drawing along with hundreds of others. Then you vote on the darkness of a number of lines to help influence the direction the drawing is taking.

There's a new drawing with a different theme every day. You come back the next day and see the final result. I helped draw the right shoe of this wheel chair bound rocker in the drawing titled "Rock & Roll Hall of Fame". You may not like the end result, kind of a tug of war

Who's got that Palomino?

It's been fun to learn about the growing list of Palomino fans. What a diverse and interesting group of people we are. Clearly we all have a common interest in pencils and in my view PRevo has done a wonderful thing bringing us together. But it's clear there are many more links than an interest in pencils and the outlet to wax philosophic about our chosen tools of choice, how we use them and what might be done to improve them.

Appreciation of a finely crafted product is clearly a common denominator. Whether it's a Palomino, a Moleskine sketchbook, a Ticonderoga, a Faber-Castell Grip 2001, or whatever. Though it's clearly deeper than a simple appreciation of quality. An emotional connection gained from use of these items and how we feel about ourselves when we're engaged in that activity.

Certainly there is the sense of community. But there are thousands of on line communities and I would assume that many who have joined the Pencil Revolution are active in other communities as well. As a group I've found beyond pencils we do have other common interests such as bird watching and photography, reading, drawing, etc.

For me creativity is the strongest and most common link. Whether it's writing a 50,000 word novel in a month in pencil, exploring and designing unique symbology, or simply keeping our own blogs about a broad and diverse group of subjects. In fact it's the link as a creative outlet that inspired me to get going with Timberlines and begin to offer Palomino pencils on eBay where perhaps I have helped a few others with the tools to. Since then I've even taken up notetaking, writing and drawing in a Moleskine myself when I haven't drawn in a number of years. And I'm not the only one.

Finally, a very special congratulations to Cyberlizard. I see you are a winner in 2005 National Novel Writing Month contest and we worship you for writing the whole thing in pencils and using Palomino pencils at that. For the sake of our eBay store we're kind of hoping you'll just keep on going month after month. Can't wait to learn more about your novel.

Pencil World Promotional Note: We've now added aquarelle pencils to our Palomino range and have great offer going on for Christmas pencil stocking stuffer bonus giveaways with a purchase of any of our Palomino pencils.

Wood Manufacturing By-Products

A recent comment on my earlier post "Wood Cased vs. Mechanical" questioned the relative environmental impacts of manufacturing these two types of pencils. I responded with a brief comment referring to a previous study commissioned by the Incense Cedar Institute a number of years back that reviewed the "cradle to grave" lifecycle impacts of Incense-cedar pencils to extruded plastic pencils and I believe also pencils which used composite slats produced from "recycled" paper. We're currently working to dig that old study up since the material would likely make for an interesting Timberlines post. However, it turns out the timing happens to be appropriate now to discuss one important aspect of the this life cycle given the introduction of our new Palomino Wood Crafter Hobby Kit. This aspect is the importance of developing markets for By-products in not just wood products manufacturing but any other industry for that matter.

Certainly with the increasing costs of raw material inputs over time there are both important financial and environmental benefits to developing by-product markets. There is a long tradition in the forest products industry of developing by-product markets for what originally was considered waste wood developed as a result of the primary lumber of finished wood products being manufactured. Typical wood by-products from sawmilling and remanufacturing facilities include: low/off grade lumber, bark, wood blocks, chipper stock and wood chips as well as shavings and sawdust. Some of these have long been used in other products such as generating pulp to make paper or cardboard products. However, in many cases even as recently as forty years ago many such by-products in the US forest products industry we're simply "hogged" up and burned off at the manufacturing site to prevent their accumulation. The old "teepee" shaped burner was a common sight adjacent to most sawmills. Fortunately, a combination of new clean air regulations and the improved overall efficiency and economic benefit of finding higher value markets has prevailed for a net reduction as well as the maintenance of lower total cost of manufactured wood products to consumers.

Today a whole host of by-product markets have been developed to make use of such materials. Examples include landscape bark, pet bedding, hog fuel for co-generation of electricity, Oriented Strand Board, Flake board and more. Eastern Red Cedar, a formerly important pencil wood species, is today used for production of closet linings and specialty wood items. Given this specied aromatic qualities, the waste sawdust is often distilled to extract cedar oil which is used as an essential oil base in many perfumes and household products.

Our own company has a strong history of being a leader in the area of by-products market development to utilize materials from our cedar slat operations. In 1969 we developed the first wood-wax manufactured firelog from our Incense-cedar sawdust by combining this with microcrystalene waxes, a "bottom of the barrell" type by-product from the petroleum industry. This product eventually became our Duraflame firelog which burns cleaner with less emmissions than firewood. Today with our slat manufacturing relocted to China Duraflame continues to use some Incense-cedar fiber from other wood products operations in California, but increaingly have expanded by using other sawdust and waste wood frm other manufacturers as well as agricultural by-products and new natural wax substitutes.

With our Incense-cedar pencil slat production our "Primary" driver products are reffered to as "wide ply" Select quality slats. These typically yield 8 to 10 pencils wide per slat depending upon the diameter of the pencil being produced. Our production of smaller narrow ply and shorter memo slats as well as lower grade recovery slats in addition to the prefered Select wide ply slats assures higher total yields of slats and pencils from the inbound Pencil Stock lumber. Marketing of such slats requires working closely with our pencil manufacturing customers to help them achieve the benefits of lower wood costs that can be obtained since there are generally trade offs in terms of efficiency and throughput. Memo slats for example are now a leading raw material source to produce "shorter" Cosmetic pencils. Certain narrow ply slats are more favorable for carpenter pencil widths than standard wide ply, etc. Slats even shorter than memos or narrower than standard production slats are also fingerjointed or now even edge glued to produce the wider standard length slats preferred by our customers for maximum throughput efficiency. Also now in our Thailand pencil facility we simply produce pencils ourselves on an OEM basis from Low Grade Slats for our other customers who prefer to focus just on using our more efficient higher quality slats in their higher labor cost environments.

With relocation of our pencil slat operations to China we have faced new challenges to develop higher value by-product markets for that. The Chinese market demographics and consumption patterns do not match up well for investment in Duraflame firelog production and freight costs from China to US for this type of heavy product are prohibitive. Most of our waste product has been sold of as lower value chips or hog fuel. While our expanding fingerjoint and edge glue operations will help we still have components of our waste stream have natural defects that are not appropriately recoverable into either process. Formerly, some such product was sold as is for craft purposes. However, given the lower labor cost structure in China we are able to recover and further process this waste streams in ways not previously possible n the US. As such we have developed and are pleased to introduce our Palomino Wood Crafter Kit. The first product is now available on our new eBay Pencil World Creativity Store Craft Materials Page. (Note: We're just selling from a very limited sample shipment of the prototype packs and waiting for arrival of regular inventory stock so if we sell out keep checking back on the Craft Materials page)

Frank Lloyd Wright Working Pencils

See "Write Shirt" post over at the Pencil Revolution.

This is a photo I took of the print I have hanging in my office. It appears to be the same print on the Wright t-shirt. It is a layout of the pencils reputed to have been laying around Wright's working space at the time of his death.

Wood Cased vs. Mechanical

A little while back there was an interesting debate among Pencil Revolutionaries regarding the various benefits and drawbacks of wood cased vs. mechanical pencils. (See "Can't Corral that Palomino") I was of course happy such a passionate discourse resulted from a post on our new Palomino Mixed Grade Graphite pencil set, but the real benefit for me came from the comments themselves.

As an industry participant I was intrigued by the detailed consideration of performance characteristics of these alternate pencil types. It was somewhat like sitting in on a focus group discussion and though certainly a limited sample size of true enthusiasts I did find some ideas that we manufacturers and marketers could further explore. Of course, many of these ideas have already been addressed in various forms by manufacturers of both styles of pencils. However, the challenging aspect for me is to think about what performance benefits and objections people expressed regarding wood cased pencils and how creative product solutions to those might expand the wood cased market through new customer conversion.

One of the key "objections" about wood cased for mechanical pencil fans is the need to continuously sharpen pencils versus the simple clicking action of mechanical when doing extended writing or note taking as opposed to drawing or sketching where most seemed to favor wood cased. Harder grade leads are certainly one option to reduce frequency of sharpening. This has it's limitations though as it negatively effects the darkness many pencil users prefer from softer leads, which by the nature of their physical properties simply wear at a faster rate. Naturally, it seems that perhaps a "sharpenless" wood cased pencil might find a niche of new converts if it combined the ease of use of a mechanical with the attractive feel an emotional sache of a good wood cased pencil.

Other than simply encasing a mechanical type pencil with a wood casing, which is not a new idea, I can't say that today I have a real design concept for a truly unique sharpenless wood cased pencil. Whether such a concept is achievable or there really would be an attractive demand is uncertain. The world is full of interesting product concepts that don't really achieve mcuh commercial success. Recently we received a proposal to market someone's design for a pencil with about 1/2 of the total length made up of a long eraser. The concept allowed the user to peel back the "cardboard type" ferrule to expose more eraser as needed. We declined as I could not see the economics working well for this combination versus the simple use of an eraser topper wihch is reusable with other pencils and more cost effective. More often than not the typical pencil eraser is not fully utilized and is wasted anyway, so why make it longer.

In the meantime I can announce our first eBay auction listing in our new "Vintage & Collectables" Category on the Pencil World Creativity Store. This is a single Palomino Wood Cased Ball Point Pen which is one of a limited set produced as Premium gifts when we first initiated our California Republic product line. Unfortunately, I don't have any of these which are mechanical pencils with a Palomino quality lead that I might call the "Sharpenless Palomino Pencil". Perhaps one day.

Finally, I am pleased to note that following an important Revolutionary's detailed technical analysis our Palomino HB and 2B pencils has resulted in their selection as the winners of the most favored replacement to the famous Blackwing 602 pencil which is no longer in production. In addition, we are pleased to announce that the Palomino HB is now also available as part of the new Moleskine Gift Sets at Ninth Wave Designs eBay Store. Ninth Wave Designs has become an authorized dealer of our California Republic and ForestChoice pencils and we look forward to seeing more combination Moleskine pencil sets using our Palomino and ForestChoice pencils in the future.

How the Palomino Escaped the Corral

Wow. Hard to believe a full month has passed since my last post. I have been quite busy with annual budget planning process, a trip to our China facility, board meeting preparation and such that Timberlines has fallen down the priority list. Of course as is typically the case I still have a heavy weekend of preparation prior to our board meeting Monday and find myself spending a few hours last night listing some new items in the Pencil World Creativity Store. Now here I am, back at it too early this morning without enough sleep feeling like I really want to focus first on this long overdue Timberlines post. I wonder is there some correlation between sleep deprivation, work avoidance and blogging? I guess some times your brain just needs to take a break and focus on something a bit more creative.

I'm appreciative of the developing support we seem to be getting with our "experiment" at the Pencil World site on eBay. This has been an effort to make some of our fledgling California Republic Stationers brand range available to pencil enthusiasts on a limited basis here in the US. I really must thank John over at the Pencil Revolution for his encouragement and support. His review of our ForestChoice graphite item got things started, Frank C. Became the first to purchase pencils as a result of John's initial Revolutionary Review and the Revolution was underway. In fact Frank seems to be the earliest adopter in the pencil arena as he buys every item from every Revolutionary Review. I have visions of Frank at a desk surrounded by hundreds of different pencils, a hand sharpener, pencil shavings and a Moleskine scribbling and sketching away.

After that initial ForestChoice review I sent some samples to him with a few Palomino pencils and some other items from our California Republic range which we only had introduced formally in the Russian market of all places (that's another story). John loved them so much he pressed me to make the Palomino HB available somehow even if it was just as an auction item on eBay. Anyway, the Pencil Revolutionary had recently gone viral thanks to Armand's support at Moleskinerie, his simple post at Metafilter and some other links from some other blogs.

So with a sum total of 15 purchases and no selling experience on eBay I decided to give it a go and launch the Pencil World store mainly as a creative outlet to compliment my Timberlines effort and just to see what might happen. No business plan. No strategic analysis. Definitely not typical me. Also not the easiest route since I could have simply added the one Palomino item to our ForestChoice sales site and been done with it. Of course, after about 10 sleepless nights since you can't have a store without multiple items and a promotional You Can Create! Program and a bunch of other support pages and I told John we were up and running.

The Revolutionary Review of Palomino graphite HB pencils came out at September 16th and that same day who else but Frank C. Became the first Palomino pencil customer that very same day along with five or six other revolutionaries through that first weekend. The Palomino was now lose and running free and we've developed a small but growing group of fans for our Palomino graphite writing and drawing pencils. You've provided some wonderful feedback on the extremely smooth finish and writing performance. John described the product as "smooth as a new Mustang" and some have even compared the Palomino HB favorably to the famous Blackwing 602. Now Ninth Wave Designs has even become our first US dealer for Palomino and will soon be offering some Palomino and ForestChoice items as gift set combinations with various Moleskines. We look forward to seeing those offerings.

Thanks to all you Pencil Revolutionaries for your support so far and especially to John for your encouragement and continued leadership of the revolution. Of course in the big picture of our overall business and the industry this whole Pencil World thing is the proverbial "ant on the elephant's arse" with a sum total of 40-50 sales so far but it's been fun and I'll continue as time permits to press forward with new items and posts and hope you'll continue to spread the word. We have several new items I listed last night and more on the way in the next week or two. If you'd like to be kept up to date with new items or promotions as they are added I now have an email Newsletter list you can sign up for on the sidebar to the store site

So back to the original purpose of this post. A number of you have been asking about additional graphite grades to complement the Palomino HB. I had not planned to introduce these until seeing how things go with the HB item given costs of having carrying additional inventory, etc. However, during a recent inventory review I found that we did indeed have a small initial run of several other grades produced which were not showing on our reports properly. These additional grades include 2H, H, B and 2B. So I now have a small sample shipment in and have been able to list a new item the Palomino Graphite Mixed Grade 6 pack. Hope you like it.

Sorry for all the historical rambling as this post went a totally different direction than I had originally planned. I even had to change the title of the post. I guess each revolution needs it's historian though.

Woodchuck: The Pencil Pusher

Note: The drawing shown here hangs in my office and was a gift to my father by a waitress/artist who once served him and the owner of one of our customers from Mexico, Lapicera Mexicana during a dinner in San Diego. She thought it was novel to come across interesting people working in the pencil industry and drew this for my father and mailed it to him later.


Last week I was visiting with a longtime friend and personal advisor discussing developments in our business as well as my recent extracurricular activities with the Timberlines, our new Pencil World Creativity Store and my Flickr site. She later checked the sites out and thought the whole WoodChuck, the pencil pusher alter ego was a hoot and provided me an interesting new outlet for some of my creative energy.

The reality is it's a challenge running a global business with international sales and operations in several time zones in our competitive industry. This alone is quite a bit before throwing in the added efforts of keeping up a new blog on the industry and starting a new online sales effort for our fledgling California Republic product range. As I hit extremely busy periods with the day to day work like we're currently in now the picture here seems increasingly appropriate.

Unfortunately correlating with such busy periods is a reduced frequency of posts on the Timberlines. It's not that there isn't lots to do and cover here on Timberlines, I actually have a long list of topics I have plans to cover down the road, just need to balance that with the everyday pencil pushing. I'll do my best to keep at least one meaty post going once a week.

Anyway I'd like to thank those of you continuing to visit Timberlines and especially those that have supported our Palomino launch thus far, particularly our friends via the Pencil Revolution.

Now back to Halloween planning.

Incense-cedar: A Growing Resource

The second in a series of posts on California Incense-cedar, its historical and current use in the pencil industry; it’s conversion to pencil slats, finished pencils as well as other products; and important aspects of it’s growth and management as a timber resource in U.S. western forests. My last post covered the key reasons for the transition from Eastern Red Cedar to Incense-cedar as the premier wood species used for pencils. Today I deal with the growth and abundance of Incense-cedar in our forests.

Incense-cedar is a hearty, drought-tolerant species that grows in a variety of soils in abundance throughout it’s natural growing range of the inland forests of central and northern California (as Calocedrus decurrens) and in southern Oregon (as Libocedrus decurrens). Though widely distributed in elevation it flourishes within the 2,000 to 6,900 foot (610 to 2,100 meter) elevation range.

Unlike species that occur in groves, Incense-cedar can be found scattered among Douglas-fir, Jeffrey Pine, ponderosa pine and other species that dominate the mixed-conifer forest. Within the state of California, Incense-cedar generally comprises about 5% of the trees in a stand while just 1.5% in it’s southern Oregon growing range. Despite it’s popularity in a range of uses, Incense cedar has never become a mono-cultural plantation species as with other commercial western softwoods. As a prolific seed-cone producer it readily regenerates and proliferates throughout it’s growing range aggressively repopulating any available site on the forest floor. It’s germination and survival rate are excellent relative to other softwoods.

Given historical tendencies to manage for more commercially desirable species on private timberlands the greatest abundance of Incense-cedar is found on public timberlands in our National Forests. However, due to it’s aggressive growth and increasing trends towards selective harvest methods and multi-layered forest canopies, Incense-cedar has experienced a growing importance on private timberlands in second and third growth forests. As a result there is more Incense-cedar growing in California forests today than at any time during the past 50 to 70 years based upon data from the US Forest Service mandated Forest Inventory and Analysis Project.

Despite the strong natural regeneration of Incense-cedar and the fact that it is not typically considered one of the more important commercially managed species, managed reforestation of the species is also practiced by both governmental agencies and private interests. In California and Oregon there are numerous nurseries which grow Incense-cedar saplings for reforestation purposes. Significant research has also been carried out on such issues as genetic diversity, adaptability, insect resistance and survivability with respect to Incense-cedar. The application of the knowledge gained through years of research assures improved forest health and a continued sustained availability of Incense-cedar.

My next post in this series will cover the specific regulatory issues for National Forests and within the state of California that provide further support to assure Incense-cedar and other western species remain part of a healthy, sustainable, diverse and multiple use forest ecosystem.

(Note: Most of the information for this post was sourced from “A guide to Incense-cedar” published in 1992 by P&M Cedar Products, Inc. following extensive research into a wide range of data and information resources about the species.)

Why Incense Cedar?

Note: This color pencil drawing of a California Incense-cedar tree comes from the cover of one of our California Cedar Products Company brochures dating to the early 1960’s. The artist is unknown.

This post is the first of a new series dealing with Incense-cedar, its historical and current use in the pencil industry; it’s conversion to pencil slats, finished pencils as well as other products; and important aspects of it’s growth and management as a timber resource in U.S. western forests.

Our company California Cedar Products Company founded in 1919 has had the unique position of playing a leading role of the development of California Incense-cedar (Libocedrus decurrens or also known as Calocedrus decurrens) as the premier wood species for high quality pencils worldwide. As alluded to in a recent post at the Pencil Revolution, Incense-cedar originally began to be used as a substitute wood for Eastern Red Cedar (Juniperus virginiana) which was the premier wood for US produced pencils and some European pencils dating from the mid 1800s through the early 20th century. It is commonly thought that the main purpose for the shift to Incense-cedar was due to dwindling supply of Eastern Red Cedar and there is some relevance here, but primarily from a comparative economic standpoint only. ERC is still widely used for commercial purposes today for products which most benefit from the technical characteristics contained in the natural cedar oil extractives of this species. Products such as closet lining, shoe trees, coat hangers, storage chests and natural oil extractives used in the essential oils industry for perfume and other cosmetic and scent purposes.

So what is the full story for the transition to Incense-cedar? First, western forests represented the largest unexploited wood basket in the United States and the superior growing conditions for softwoods and larger diameter of trees and increasing investment in western forest utilization during this period lead to the lowest cost of timber coming from the west. So from the first respect California Incense-cedar was less expensive than Eastern Red Cedar which was experiencing increasing prices as tree diameter sizes declined as increasing proportions of harvest came from second cut vs. “old growth” timber. However, economics of timber cost alone do not fully explain this transition. There were plenty of other species in the western US more plentiful and of lower cost to process, but none of these succeeded as a major pencil wood. In fact, even Incense-cedar pencil slats met initial resistance in the pencil industry and needed to be stained from it’s natural light blonde color to a deeper reddish-brown to match the accepted color of Eastern Red Cedar.

The real story lies in the technical properties of Incense-cedar which make it uniquely exceptional for use in pencils and various other applications. First, Incense-cedar exhibits optimal physical characteristics for close-tolerance, precision machining that make for very smooth machined surface and exceptional sharpenability in finished pencils as well as allowing optimal wood utilization from saw log, to pencil stock lumber, pencil slats and then into pencils. Additionally, it’s thermal conductivity rating or (K factor) is among the best for all softwoods. This provides dependable, predictable insulating properties and resistance to heat migration which positively impact performance of the species under machining conditions as well as gluing and drying.
As one of the most stable wood species Incense-cedar also stands up to wider variations in temperature and humidity without warping, checking or shrinking. This allows for tighter size tolerances and easy shipment to and use of cedar by pencil factories in many regions of the world where there are varying climates. Finally, the smoothly machined surface and relative lack of resin canals and pitch pockets assure that cedar pencils can be easily painted or stained with lacquer or water based stains to a fine, smooth finish without bleeding or other problems.

Beyond the timber economics and natural technical characteristics the final key factor in the success of Incense-cedar was the dedication and commitment of a small group of pencil slat manufacturers lead by CalCedar. This group focused their businesses uniquely on the production of high quality product, consistent and reliable supply and service, and technical development and leadership which increased yields and lowered total costs of production. By specialization just in production and sale of slats with a higher quality raw material coupled with continuous improvements in technology and finished product eventually most pencil companies eventually discontinued slat operations and began purchasing their slats from dedicated slat manufacturers. Pencil companies that had typically been vertically integrated with their own slat operations learned that they were able to improve their own business focus, finished pencil quality, operating economics and use of working capital by focusing solely on pencil production. In some cases the working capital and other economic savings were reallocated towards implementing production and supply of other writing instruments or complementary products to their distribution channels for pencils.

These were the major factors that lead to the leadership position of Incense-cedar as the premier pencil wood species in the world today. Of course times and market conditions change over time and there are several other wood species that have also become important in the pencil industry these days. This topic will be addressed later in this series. However, my next post in this series will address information regarding growing conditions and forest management policies that assure that Incense-cedar remains a plentiful and well managed species assuring a sustainable long term supply for a wide range of uses.

Remember to look for the Cedarmark which indicates use of Genuine Incense-cedar wood from California Cedar Products Company.

The Chinese Pencil Industry & World Reaction: Part 2

My last post covered some of the competitive developments in our industry as a result of the large growth in the Chinese pencil industry.

While I mentioned that about 52% of the world’s pencils are now produced in China, the reality is that the Chinese share has grown to this level from about 22% in 1990 and 37% in 1995.
When you consider that China also exports pencil slats (including our own company’s product) the Chinese production share of wood or alternate material for pencil casings is much higher than pencils alone. Similar conclusions also apply for other pencil input materials such as graphite cores, ferrules and erasers. To a large degree the US pencil industry (and other countries) itself has become more one of “Assembled in USA” vs. “Made in the USA” although the legal definition of “Made in the USA” as applied to pencils is a technical matter in itself best reserved for a future Timberlines Post.

There are two key trade policies in China that seem to support Chinese producers to achieve their increasing advantage in world pencil industry. The first is the treatment of Value Added Tax (VAT) in terms of a VAT rebate that exported products receive. All goods sold within China are subject to a 17% VAT tax which is not dissimilar to many countries that impose VAT taxes. This applies to raw materials, labor and other services and inputs into the manufactured good. However when these goods are exported into foreign markets, the exporting manufacturer often receives a rebate of up to 13% of the export value. This in essence becomes an export subsidy to the Chinese producer.

In the past two years these VAT rebates have been eliminated on certain intermediate products such as our pencil slats while they have been retained or only slightly reduced for finished goods. In our case it made our pencil slats sales to our customers around the world more expensive due to the elimination of a rebate originally calculated into our cost structure. This simply adds further incentive and competitive pressure for foreign pencil companies to displace manufacturing to China. Unfortunately, such changes have the counter point of demonstrating inconsistent or changing rules that can serve to deter the foreign investment it is designed to attract. Such changes get lumped together with other concerns about unequal application of safety, tax and environmental regulations to foreign owned companies in China vs. local Chinese companies.

Finally, the pegging of the yuan to the dollar previously mentioned in a prior post has made Chinese pencils and other goods increasingly competitive with pencils produced in other parts of the world. This has also contributed to the growing imbalance of trade with China in many products including strengthening the Chinese pencil industry world market position. Recent efforts to begin slowly relaxing these constraints towards a floating currency will increase the relative costs of Chinese exported pencils, but you can be assured this is an issue the Chinese government will manage in a careful controlled fashion for the ultimate benefit of their own country.

Given these many issues, practices and policies I don’t expect an end any time soon to efforts by pencil companies throughout the world to take actions they view as helpful to their ultimate goals. The challenge for the world’s pencil producers, whether Chinese or otherwise country remains how do we continue to evolve our business strategies, products and practices in a profitable manner that works to our own competitive advantage. There certainly may be common issues and industry standards where collaboration is a benefit to the industry as well as to the ultimate consumer as a whole. However competitive differences will likely always exist.

The Chinese Pencil Industry & World Reaction: Part 1

The third in a continuing series of posts on international trade issues affecting the pencil industry.

My earlier posts focusing on pencil Anti-dumping duties provided first, a primer on the purpose and structure of such duties, and next an update on current developments on US anti-dumping duties against Chinese pencils. Anti-dumping duties in the world wide pencil industry are singularly focused on Chinese pencils.

As we’ve seen in order to protect their domestic manufacturing industries from what is perceived as unreasonably low priced and perhaps as unfair competition from China many countries have implemented dumping duties. My own experience is that many producers in the Chinese pencil industry don’t always seem to understand or agree with the justification for such anti-China trade polices. I have spoken with key Chinese managers who reflect a shared point of view that the Chinese pencil industry is not very important in the world picture. They complain that the growing number of small pencil producers who compete only on price, make the Chinese industry as a whole unprofitable in their domestic market.

As a result many Chinese producers look to the export market for higher value added opportunities. However they themselves don’t always feel they get a fair chance to compete with the world’s major brands. They complain they are expected to offer a significant price advantage to branded producers elsewhere in the world. They are left only with lower value OEM sales to existing brands or private label opportunities to foreign retailers for market entry. Some hold the view that to overcome the high import duties on their pencils they must hold their prices down to negligible levels. Thus further perpetuating demands for anti-dumping duties on Chinese pencils by producers in foreign markets.

In response to these pressures a small minority even resort to illegal practices such as counterfeiting western brands in the Chinese home or other third world markets. Some even purposely mislabel country of origin and transship via third countries to avoid these duties. None of these activities reflect positively on the Chinese industry as a whole since it’s often difficult to establish who the manufacturer is when they are producing private label products.

So when both Chinese and foreign pencil manufacturers often cry foul, where does the truth lie. As usual it’s somewhere in the middle.

The Chinese pencil industry currently produces 9.8 trillion pencils per year based upon the 2004 statistical data. Of these pencils about 80% are exported throughout the world with the US being the single largest market and the EU second. By our industry estimates Chinese pencils now represent over 50% of the world’s pencils on a volume basis. So it’s clear that the Chinese Industry is no small, unimportant player when it comes to pencils.

What of Chinese complaints about low price expectations of foreign buyers? It’s true Chinese pencils are on average the lowest priced pencils in the world as is their cost structure. This is why large distributors and retailers like Walmart, Target and others have set up their own purchasing offices in China to play one producer off against the other during their annual purchasing programs. Often Chinese export prices realize just one-fifth of the retail prices ultimately paid by consumers. What Chinese producers fail to realize however is that such practices still provide them access to major world markets as these large retailers’ work to replace or devalue traditional brands in their home markets.

The intensity of such competition for their traditional markets naturally drives a range of reactions from branded producers worldwide who have invested decades and in some cases centuries into building their brands, markets and distribution networks. One reaction is certainly to lobby for protective measures from their local governments, but the majority of reactions are market focused. Pencil manufacturers worldwide have focused on driving their own cost structures down, placing further pressure on their suppliers as well as looking for more value added products to produce and market. Some in the industry (such as our own company) have even taken to eliminating their home market production and have invested in their own Chinese facilities or relocated to other low cost countries. Some simply now buy their pencils produced to their specifications from Asia.

Finally, another problem is that given the common perception that pencils are simple easy products to produce and Chinese pencil manufacturing equipment can be acquired for a relatively low investment there has been significant new entry of capacity in the past ten years. Today there are over 200 pencil manufacturers in China alone, while the rest of the world has perhaps 100. Often local rural government entities in China will support or even participate in such investments hoping to build up their local economy. Local officials in some cases even look the other way when it comes to safety and environmental compliance regulations.

Given inexperienced management or technicians in some such companies producing a good quality product is difficult and differentiating on anything other than price nearly impossible. Some of these companies cannot and may never be profitable, yet somehow they survive from year to year adding capacity onto the market and holding prices down. So though some old large scale state owned pencil factories in China have closed in recent years due to their higher social cost structures, such behaviors do not indicate to many countries that there is a true market economy developing in China or that dumping of pencils is not occurring.

Clearly there are challenges for both Chinese and traditional brand manufacturers around the world. As price competition has intensified due to pressure from increasingly powerful retail distribution channels, pencils have been increasingly commoditized. While consumers may have benefited some from lower prices, the typical Chinese pencil though improving in quality over prior years still represents a step down in quality from the average quality of product previously available in western markets. Those who achieve the best combination of cost control while maintaining and improving quality and finding new value added products and services to differentiate their business from the pack will come out on top.

My next post tomorrow evening will cover the two key trade policies in China that work to support Chinese producers to gain advantage in the world market.

Ironbound Reflections

It has been since prior to the Labor Day holiday that I focused on adding much of substance to the Timberlines other than last week's quick addition of my Guestbook. Not the sort of thing one should be doing when just starting out on a new endeavor such as this if I want to build any regular readership. Unfortunately, some business and a few private matters have interceded and in reality sometimes you just need a break.

Truth is, I haven't even thought about Timberlines for nearly a week until returning today from a family wedding on Ironbound Island located in Frenchman's Bay near Bar Harbor, Maine. The world sets a different pace on Ironbound as my photo implies. An idyllic setting for a few reflective days following what has been a difficult few months due to my wife's serious illness this past summer. Now that things are improving with her health it was great she was able to travel to attend her cousin's wedding, reunite with her family and relax in such a wonderful natural and historic environment.

Electricity based only upon solar power, water heated by copper pipe bypass through the kitchen's wood burning stove, old fashioned kerosene lanterns, etc. No computers, TVs or telephones. A run down old jeep or two only for hauling supplies around the island. Just the place a wood cased pencil fits right in. I even took the opportunity to do a few quick sketches for the first time in ages. Not great, as compared to some of my photos which I have added to my Flickr page along with a few drawings of our Ironbound weekend.

Ironbound Island has however been an inspiration for real artists within the past hundred years or so. Lifelong Artist Dwight Blaney of Boston established his family summer home there in 1892 inviting family, closest friends and fellow artists as noteworthy as John Singer Seargent. Still maintained as a family retreat the island has been preserved in its natural state and permanently dedicated to non-development except for a few family residences. Dwight Blaney's water colors and paintings are a lasting portrayal of the quite reflection and repose of the Ironbound that thankfully still exist today. (Note: Blaney's painting "Ironbound Island, Maine" shown in the link provided depicts the same farmhouse as that in the background of my photo) What a treat to have been a part of this wonderful family event in such an amazing place.

Timberlines Guest Book

Given the 40 or so years of history at the CalCedar research department there were quite a few guest books filled. None more appropriate than the one I have photographed here to initiate my own Timberlines Guest Book.

Prior to relocation of our manufacturing and our main technical capabilities overseas we frequently hosted visits here in California by our customers, members of academia, other forest products industry participants and so forth from all around the world. Visitors to the research department remember the tours and the various centers of excellence developed under my grandfather Charles' leadership. These quite detailed tours were nearly always anchored on either end by two activities. First, each visitor was asked to sign the guest book upon arrival and then following the tour most visitors met with my grandfather in his office just off the library. There they had the opportunity to discuss, sometimes for hours, numerous subjects of great interest to Charles. Any such meeting might cover subjects as diverse as saw vibration and design, noise control in the factory and the proper grammar of how to say something in French.

I hope you will take the opportunity to comment here in the Timberlines guest book. While I can't promise you hours of discussion or such a range of intellect as my grand dad, I'd be happy to know your ideas and questions on topics you would like to see addressed in the Timberlines.

Mongolized

Photo: courtesy of our friends at Sanford Faber Venezuela.

With the buzz of pencil talk going about the blogosphere recently I have seen several comments on the Mongol brand. These reflect preferences for it's functionality and the inability to find this brand here in the US. The Mongol is of course a very famous brand established by Eberhard Faber Company. The Mongol brand is no longer produced for the US market as a result of a series of acquisitions and product rationalizations of the Eberhard Faber USA assets. These assets eventually ended up as part of a 1994 acquisition by Sanford, maker of the Sharpie marker and a division of Newell Rubbermaid.

However, the Mongol continues to be produced today for the Latin America market by Sanford Faber Venezuela, LLC. which is the successor company to Eberhard Faber de Venezuela that Sanford also acquired in 1997. The history of the Eberhard Faber brands and Mongol brands in Venezuela is quite extensive. In this market and elsewhere in South America Eberhard Faber was represented by the Pardo family of Caracas from 1896 until 1960. At that time Eberhard Faber and the Pardos formed a joint venture to begin pencil manufacturing in the local market to replace importing the pencils. This joint venture produced the Mongol brand as well as other products, but was terminated in 1987 when the Pardos acquired the all of the shares and the brand ownership rights for a large portion of South America. The Pardo family continued to operate the business and produce until the 1997 integration into Sanford.

The history of Sanford's entry into the pencil business itself is an interesting study of how the process of acquisition and integration of companies leads to winners and losers in terms of what brands survive. Over an 8 year period starting with Newell's 1992 entry into writing instruments with the Sanford acquisition through their 2000 acquisition of Gillette's Writing Instrument Division (Papermate, Parker & Waterman brands) Newell purchased seven different pencil factories in 4 different countries formerly owned by the following companies:

- 1994 Faber-Castell USA (which had previously purchased Eberhard Faber USA - The EF name replaced Faber-Castell on the American brand and other products as A.W. Faber-Castell the German partner in the US operation retained the world wide writes to the Faber-Castell name following Newell's acquisition)

- 1995 Empire-Berol Corporation - these two companies had previously merged as a result of a buy out by Empire

- 1997 Eberhard Faber de Venezuela

-c. 1998 - Via it's purchase of Rotring, Newell also acquired the Cosmolab cosmetic pencil operation. This was operated independently of the Sanford business and sold after about 5 years.

This all excludes Newell's acquisitions of other writing instruments companies that did not produce and market pencils. As a result Sanford had numerous pencil & writing instrument manufacturing operations in four countries, a multitude of brands, product space overlaps by different brands and operational redundancies. Their self-penned "Newellization" process of assimilating and integrating companies, products and brands was put to work from the very start. The three US pencil plants excluding Cosmolab were consolidated and numerous brands just outright disappeared from the market.

As a result of "Newellization" here in the US the Eberhard Faber, Berol and Empire names have disappeared from US produced pencils; first replaced by Sanford and more recently by Papermate. The Mongol itself was phased out in favor of the Mirado brand which better fit the Newell/Sanford key distribution channels in the mass market while Mongol had been stronger in the commercial market.

The Berol and Mongol names have survived in various Latin America markets due to the strength of those brands there, though Eberhard Faber name is now gone also from the Venezuelan produced Mongols. Here the Faber name still survives as a part of the Venezuelan subsidiary's corporate identity, but rumor has it that all Sanford's foreign sales and manufacturing operations will soon take on the "Sanford Brands" moniker followed by the country name.

The photo here demonstrates what I call the "Mongolization" of the corporate master brand in the Latin America market. Here the strong Mongol product brand has outlasted the transition from Eberhard Faber to Sanford and now to Papermate. Long live the Mongol. Think globally, act locally.

Note: Doug Martin's Pencil pages have a page dedicated to the provenance of Berol, Eagle and Empire pencil brands up until the point of Empire-Berol's acquisition by the Sanford division of Newell in 1995. A look through this shows many of the brands which have not survived the years long process of acquisition, brand and product line rationalization, including my sentimental favorite Eagle.

The Pencil as Art

Photo Credit: C book

Back to the creative side for a day.

We generally think of the use of pencils to generate art. However, it seems the pencil itself is continually viewed as a source of inspiration for artistic expression in several media. Here are links to a few interesting examples:

Photography

Sculpting

"Pencil Pricks" Daily Cartoon Series

Pencil Anti Dumping Duties: Are Changes in the Air?

This post continues a series of Timberlines articles discussing the impact various world trade issues and practices have upon the Pencil Industry. In my previous Primer on Pencil Anti-Dumping duties I covered the basic aspects and issues involved with Anti-dumping duties here in the U.S. against Chinese pencils. As previously noted pencil imports to the US have steadily increased over the past 15 years despite the anti-dumping duties in place for the past 10 years.

So what’s new afoot in the world of US Pencil anti-dumping Vis a Vis China? In fact there are three main areas of current activity.

First, the U.S. Department of Commerce has just published the amended final results of its 8th review which covers pencil imports from China during the period from December 1, 2002 through November 30, 2003. Most notable in this review was the virtual elimination of anti-dumping duty on imports from China First Pencil Co., Ltd. & Shanghai Three Star Stationary Industry Corp. Previously these companies which share a common dumping margin rate had a 15.2 % dumping margin rate established during the 7th Review. The amended final result now drops this to 0.15%. Meanwhile, Shandong Rongxin Import & Export Co, Ltd. achieved a reduction from 27.87% to 22.63% and Orient International Holding Shanghai Foreign Trade Co., Ltd. has had their dumping margin. The China wide rate for other manufactures/exporters remained at 114.9%.

But is final, final? This result was quickly challenged by a group of US producers who have filed an appeal with the Court of International Trade. As China First and Shanghai Three Star together account for the largest Chinese production and importation of pencils to the US the virtual elimination of anti-dumping duties going forward on their pencils could have a significant impact on US imports. Of course, China First has been increasing export prices over the past few years and as such it’s calculated dumping margins might be expected to come down. Also recent decisions by the Chinese government to move towards floating the Yuan have resulted in a 2% revaluation along with other inflationary factors in the raw materials arena might indicate that at least some of the reduced dumping margins are likely to be offset by further export price increases on Chinese pencils as we look towards 2006 and beyond.

The second important development is that the Anti-Dumping Order against cased pencils from Peoples Republic of China is currently undergoing its 2nd 5 year Sunset review. This review is conducted by the US International Trade Commission (ITC) which originally put the duties in place ever five years to determine the continuing need or not for anti dumping duties. In the recent “Domestic Producers Response to Notification of Institution” of the review the US producers argue the following key effect of imports if the duty were to be revoked.

- material injury would recur if the dumping Order were revoked
- Price effect would be significant
- Post revocation import volumes would be significant
- Claims the domestic industry has contracted since the original order put in place and has become more vulnerable to material injury
- Claims the order has supported the decorator pencil segment as the decorator segment is higher cost pencils
- Revocation would lead to continuance or recurrence of material injury to the US industry within a foreseeable time

The Domestic Industry has asked for an expedited review. The deadline for comments by Chinese or other interests that would wish to see the pencil dumping duty revoked is September 13, 2005. Determination of full or expedited rule is expected by October 3, 2005.

The Final issue currently under consideration by the Department of Commerce for all anti-dumping orders regarding China is whether to change from current Non-Market Economy (NME) treatment on certain value of production factors to Market Economy status. This is essentially a determination of methodology used to value production inputs purchased from a market economy country. Currently, the DOC uses NME methodologies for all inputs on pencils produced in China whether the materials all come from China which is considered a NME or not. The Department now proposes to use market economy prices for all of the input if the existing tests for such use is met and if the majority of the input is purchased from a market economy country. Any comments are due by September 6th.

The next post in this series will cover key trade practices and policies in China that impact the pencil industry globally.

Revolutionary Reviews

Well it looks like the revolution is truly underway. The latest in the ongoing series of Revolutionary Reviews covering the infamous Dixon Ticonderoga pencil seems to have generated quite some discussion over at MetaFilter. This time around PRevo invited guest reviewer Tom Leininger to cover his favored "Tikes". While there seems to be some lively commenting regarding the review itself, it's clear there are a lot of fans of the Ticonderoga pencil.

This is the third in Pencil Revolutions ongoing series of product reviews. Earlier reviews covered the Papermate American Naturals and our own FSC certified ForestChoice graphite pencils.

We're looking forward to seeing how the continuing revolution develops.

The Island in the River

Thanks to Alia for an insightful comment regarding my earlier post, Who's got the Biggest Pencil?. It's great to get some input from the artistic side. Not sure which "Tribe" Alia may belong to when it comes to her own pencil use, but she sure does put them to good use.

The Island in the River shown here is my favorite one of Alia's work in her developing project. Alia writes, "This project began as a desire to fill a pack of blank playing cards with images. Standard tarot meanings did not ring true to me, and so I began researching and writing my own tarot-like divination deck."

The textual reference for The Island in the River:
(Solitude) A place for thought and creative works isolated from the everyday world.
Reversed: Being swept away by the current. A need for rest from the press of the crowd. (Stampede)

Great Inspiration. I think I'll go get started drawing something in my new moleskine over the weekend.

Pencil Anti-Dumping Duties: Primer

The following is the first of a series of Timberlines articles to be posted in the coming weeks discussing the impact various world trade issues and practices have upon the Pencil Industry.

Import and export duties, value added taxes, export credits or export VAT rebates, fixed currency exchange rates are all examples of factors that impact trade flows around the world. Such meddling with what “free market thinkers” would call free and unrestricted trade is a common practice from nation to nation. Certainly the World Trade Organization and other regional trading block agreements such as NAFTA, various EU agreements, APEC, ASEAN and MERCOSUR work to liberalize such trade barriers worldwide. However, there is clearly a level of relative national and regional competitive advantage to be gained when countries set their policies regarding these market influencing instruments. Often the duty policies of one or more countries for given products are set as retaliation for or to correct perceived unfair trade practices of another particular country.

The pencil industry is no exception to this situation and a number of these market “interventions” or “correction factors” (depending upon where you come out on the free trade scale) exist within our industry. Today’s topic of anti-dumping duties is just one such example. Currently, several countries worldwide have implemented incremental Anti-Dumping duties specifically placed upon imported Chinese pencils as a result of lobbying from local pencil manufacturer groups. These anti-dumping duties are imposed over and above any normal import duty pencils may be subject to. Among such countries with Anti-Dumping duties are the United States, Mexico and Turkey. I expect there may be some others of which I am not currently aware. For these three countries, anti-dumping duties range from just over 100% to over 400% of the invoice value of the pencils.

Here in the US the current country wide anti-dumping deposit rate for pencils exported from China to the USA is 114.9%. The importer of record is required to “deposit” funds into an escrow type account upon importation of the pencils. This rate is applicable to all imported Chinese pencils, unless a specific Chinese exporter/producer has gone through an administrative review process with the U.S. Department of Commerce (DOC) to have their company audited for a reduced rate. However, this is an expensive and very complicated audit process and as such not many Chinese companies pursue reduced dumping margin rates. Currently, four Chinese entities or combined manufacturer/export company groups (including our own subsidiary facility) have received reduced dumping deposit rates ranging from 0% (ours) to around 23%. In effect these companies have demonstrated that they are not dumping pencils or should not be at the China-wide rate for the most recently reviewed period. Under DOC rules the country wide rate is set by the highest rate determined for any given Chinese company that ever requested a review by DOC. As such the original rate of around 53% was increased to the current 114.9% level a few years back.

These reviews are conducted annually for a full year of shipments upon the request of the original plaintiffs, a group of US manufacturers. Should the DOC find during a review that the dumping deposit rate should be lower or higher for that period for a given Chinese exporter/producer then deposited funds are either refunded to the importer or additional funds are paid by the importer. As such the importer takes a certain risk when deciding to import from a Chinese supplier as the rate could increase and be left with the requirement to pay additional duties at a later date. Once the rate changes the new rate becomes effective for all future shipments. As it generally takes about 18-22 months to complete the review process and determine and clear the final figures remaining in deposited “escrow” fund, these risks are certainly increased for importers should the rate eventually increase.

Under a U.S. law named the Byrd Amendment, the final amounts in the cleared escrow fund are distributed to the original petitioner companies in the applicable industry. The relative refunds are again determined according to another complicated formula and calculation. In effect, the US pencil industry (and many other industries) is reimbursed for damages resulting from low priced imports that are deemed to have been sold at dumping prices. As such implementing anti-dumping duties has become a bit of a “growth industry” here in the US as more industry groups react to the incursion into the US market by Chinese and other foreign competitors. This is a controversial rule which has been deemed illegal by the WTO, but is fraught with obvious landmines for any politician in the US who would propose repeal of the Byrd Amendment.

Even with these high dumping deposit rates, most low end commodity pencils imported from China are cheaper than US produced products. This is demonstrated by the fact that Chinese pencils imports have continued to grow over the past 9 years that anti-dumping duties have been placed on pencils. Of course in our view you get what you pay for and there is no doubt that the average quality of pencils consumed in the US has declined over the past decade.

Clearly there are a number of market inefficiencies or inappropriate incentives created by implementation of high anti-dumping duties. The Byrd amendment policy previously mentioned. Also some Chinese companies attempt to avoid the dumping duties through the practices of transshipment via a third country not subject to the duties and/or by purposely mis-labeling the country of origin for the pencils. Both are illegal practices under international trade rules, but can be difficult to detect and requires domestic producers to be vigilant as to what’s going on in the market place given all the challenges our Customs and Homeland Security department face from other fronts these days.

So what are the current developments relative to US Anti-dumping duties for pencils that will or may impact our industry in the next several months or years? It turns out there are several important issues today and these will be covered in my next post on this subject entitled:

Pencil Anti-Dumping Duties: Are Changes in the Air?

Explore the World of Pencil Collecting

Given my family history in the in the pencil industry it’s not too surprising I tend to have a wide selection of pencils stashed in desks, drawers, closets and cabinets around my house, my office and even the car. A few years back when redecorating my home office I spent some time actually going through pencils that had accumulated over the years. Some even dated to my childhood that found their from that of my parents when an old desk and group of boxes were delivered as part of their own cleanout process.

Among the clutter there were indeed a few gems from a collecting standpoint. Since that time I have become increasingly interested though not always too active in broadening and expanding my collection. This collection includes not just pencils themselves but old advertising materials I feel have some of historical or design interest. A few my own personal pencil favorites relate to our family heritage within the industry dating back to the 19th century with the Berolzheimer und Ilfelder and the early 20th century from the Eagle Pencil Company. The Eagle Diagraph pencils shown here have a very interesting knurled effect in that they were rolled in a steel die which imprinted the surface to provide this interesting texture in order to improve grip. The compass is one of my favorites due to the detailed design in the metal work. For more views of various Eagle brand pencils visit the Pencil Images Gallery at Doug Martin’s Pencil Pages. His site is the most extensive online respurce dedicated to collectors.

Pencils are of course considered collectables by children and adults alike. People specialize within their collections in all sorts of forms such as advertising pencils, old brands and their transitions and developments throughout the years, coloring pencils, carpenter pencils, cosmetic pencils, etc. In Japan, a few years back a few producers even developed a series of “game” pencils decorated with popular cartoon characters with each side of the hexagonal pencil representing a different outcome when the pencil was rolled. Children battle it out on pencil rolls for the fate of their game character pencils.

So what gems might you have stashed away in a drawer somewhere?

Nina's Pencil Point

Coming soon on Timberlines

"Pencil Anti-Dumping Duties: Are Changes in the Air?"

But for now more from Nina...

She postulates on one of the factors that may have lead her to work within the pencil industry. Of course, I think she was more excited about working for a US company operating in China though it's clear she does have a heartfelt connection.

In any event we're very lucky to have Nina and many other dedicated team members at our Tianjin slat factory (aka TCW). This group contributes so much to assure our Cedar and basswood slats are produced to the exacting standards expected by our customers. Shown here are two of our TCW management group in our saw maintenance department where we have implemented the finest technology available to assure accurate and consistent dimensional performance.

I have a very different story with pencils.

When I was a young girl, (I am still very young though) - I was in primary school, one day after I sharpened my pencils, I hurt myself with the lead point, the top poked into my right palm, it went so deep inside that I could not take it out. My mother took me to the children's hospital immediately, and the doctor tried so hard finally he gave up - the lead top remains in my right palm forever. I used to worry if the lead could kill me one day, because the doctor said the point could move with my blood into my heart.

Fortunately about 30 years passed, the lead is still there, I am still alive, and I am working for the pencil industry. Maybe it is fate, I was meant in this field, I got a forever mark a long time ago. It is a OMEN.

Now when I see the lead on my palm, I always can read its name - Calcedar.

Nina

We're a Proud Bunch: Who's Got the Biggest Pencil?

Those of us in the pencil industry are all quite proud of the origins and traditions of our companies. Many of us like to tell our historical tale of product innovation and organizational development. A number of us even claim to have produced the world’s “___est” pencil. Pick your adjective.

But where does one go for a good insight into the overall industry history?Henry Petroski's “The Pencil: A History of Design and Circumstance” is considered to be the most definitive history of the development of our industry. Many insiders however view a few facts pertaining to their own company history as not fully accurate. Some may even contest some of Petroski’s statements regarding which company first achieved various technical developments.To be sure there is plenty of interesting history in our industry.

Given the age of many of the companies even some of the factories may be considered museums or museum like. So here are a few historical references for your perusal.

Perhaps the most elaborate company historical presentation in our industry, the Cumberland Pencil Museum established by The Cumberland Pencil Company sits next door to their manufacturing facility located in Keswick, Cumbria, England. Here the Cumberland Graphite story is told beginning with the discovery and development of the famous Borrowdale graphite mines. Of course one of the museums key features is their “Worlds Longest Pencil” unveiled in 2001 at 25 feet 11-1/2 inches.

Many companies in the industry have a tale of growth characterized by merger and acquisition of other pencil manufacturers as well as of other writing instruments and art supply businesses in order to expand the product range. One of the leading examples of such development is Dixon Ticonderoga Company which a few years back published its history entitled "The Best of It's Kind". During a visit to their Versailles, MO facility some years back I saw their project to produce another world’s “___est” pencil, a giant Ticonderoga. We even supplied Dixon with super-sized Incense-cedar timbers for this effort, though I don’t have the final pencil dimensions available.

Among US pencil manufacturers just two company’s with production history pre-dating 1920 still trace current ownership to descendants of company founders. The Musgrave Pencil Company history typifies the early development and concentration of pencil manufacturers in middle Tennessee. Here much of the US industry located in order to attain supplies of Eastern Red Cedar which was the preferred pencil wood early in the 20th century. A number of US factories were originally established by immigrants from the German pencil industry culuster around Nuremburg. General Pencil Company reflects the last remaining US pencil producer with current ownership still related to the original German founder. To my knowledge neither of these companies has ever attempted to produce a Worlds “___est” pencil, though they both know how to make very good pencils.

Faber-Castell has a significant history in the pencil industry and has several entries in the competition for the Worlds “___est” pencil. A Grip 2001 measuring 12 meters is displayed at the company’s headquarters in Stein, Germany. Not to be outdone Faber-Castell’s Malaysian subsidiary has the Guinness Book of World Records certification achieved in Novemer 2002 for the World’s “Longest” Pencil at 19.75 meters.

Schwan Stabilo Group's 150 Years of History represents perhaps one of the more interesting web based company history presentations for its multidimensional timeline covering History, People, Writing Products and Cosmetic Products. And of course, you guessed it, Schwan claims to have produced the Worlds “Tallest” Pencil coming in at 30 meters for the 1906 Bavarian State Exhibition (shown above). How this one got overlooked by all the recent pretenders is a mystery, though it’s uncertain if this monster was truly capable of writing with a graphite core as the others all have. So perhaps this record needs to have an asterisk attached.

Finally, we have our own historical archives and historical display at California Cedar Products Company which provides much detail on our pencil slat history. While we do claim to be the worlds leading pencil slat manufacturer and we do make a few pencils, we have never attempted to produce our own World’s “___est” pencil. I’m guessing a little more research may be in order before ever attempting such a feat.

Nina's Thoughts on Having your Cake

It seems Nina has been thinking further about her recent trip to California. See my earlier posts Visitors from Across the Pond and Nina's Photos. She has now shared some very interesting thoughts on her impressions of America formed during this visit. I think she just wanted me to go ahead and post another one of her photographs.

Nina, thanks for sharing with us. If you keep this up I may just need to give you guest blogging privledges. And you know I like visiting China, blue sky or not.

Last weekend I got some time to think about my American trip. Since I went to Europe a few times, this American trip was really nothing extremely different in my eyes. But still, there are something impressing:

Blue Sky

Right after I arrived at San Francisco, the first inspiration, wow, the air was so fresh, it was so easy! Looking at the sky, it was so blue and clear, I could not help making quite a few deep breath - America is America, the taste of air is so different. One time I talked to my boss Mr. Berolzhemer, I wanted (him) to visit our Tianjin factory more often, he said he wanted to see the blue sky.In China we can not have really blue skies, in big city like Tianjin, it is very industrial, more and more foreign investment makes our economy growing rapidly, meanwhile, we pay the cost of pollution. The Chinese government has already been aware of this problem, we are looking forward to our own blue sky. I believe soon Mr. Berolzheimer will not have that EXCUSE to refuse our invitation.

Thinking about this, a proverb came to mind. "You can't have your cake and eat it too." This means that things people want are often incompatible. e.g. You can't have blue skies AND inexpensive industrial production. Air pollution control costs money and that adds costs to production. Examples of this are the England during the industrial revolution, the U.S. and Japan in the 1970s. Japan used to be famous for inexpensive products.

Now the first thing coming to my mind is that China will someday be the biggest market for air pollution control equipment. Unfortunately, things usually have to get worst (really bad) before change comes. I am confident that within our live time, the Chinese government with discover the words "Quality of life" and force companies to install such equipment. Here's to the BLUE SKY future of China. China will be a leader in air pollution control technology and the cost of goods will be very high.

Editor's Note: I don't want to be a pessimist, and there is progress being made. For more information on this topic see this week's new Business Week article:
"A Big, Dirty Growth Engine"

Guns

In China it is illegal to carry guns. But in America, I got to know it is allowed. My colleague - also one of my best friends - Eric uses his guns for hunting and personal protection which I respect. He has about 22 guns. Wow, I personally have never owned a gun and never plan to. Actually I have never seen so many guns. He locked them into a safety tank, I was so excited that I wanted to feel them and carry them. Eric suggested me to take some pictures, after confirming thousands of times the gun was unloaded, I took five COOL pictures. Look - I am really a virago now.

Here are some interesting statistics I got just know from internet:In 1994, 44 million Americans owned 192 million firearms, 65 million of which were handguns. Although there were enough guns to have provided every U.S. adult with one, only 25 percent of adults actually owned firearms; 74 percent of gun owners possessed two or more.There is an interesting movie called " Bowling For Columbine " which addresses the gun issue in America. From reading the statistics I got to know that Gun laws are a very controversial issue in America. It is a right written in the U.S. Constitution that citizens can own guns. American has the highest murder rate in the world. Again, you can't have your cake and eat it too. Freedom vs. Murder

Made-in-China Products

The words MADE IN CHINA were synonymous with CHEAP products.

In California, I tried to find some gifts for my Chinese friends. I could hardly find products non-made-in-China. In China town, everything even the people are made in China. Now I am taking over the new job then all invoices to the customers will be made in China.

China sells cheap but low-value-added, low-tech products to America, America sells expensive but hi-tech, high value-added products to China. In theory this benefits both America and China, this is the sense of international trade. China has the much cheaper labors. That is why I was in America. This creates a lot of opportunities for Chinese people. On the other hand, I am sad because our American associates are losing jobs. But I am sure they will have better chances, because in broad sense, they are going to have high-tech and high value-added jobs.

Vacation
In America, people's vacation impressed me, even very ordinary people go on vacations regularly. It is very different from China. One taxi drive told me he just came back from Hawaii, and he was ready to go back. In San Francisco, I saw a lot of families, they came for vacation. People live an easy life, no worries at all. In China, people can only go on vacation when they have extra money and extra time. Chinese people have a good-or-bad habit: save money. This relates to Chinese social benefit system. We do not have a complete environment to relax people. This is our problem.

I envy people who live in European countries too. Check out these statistics. Average number of vacation days....Italy 42 days, France 37 days, Germany 35 days, Brazil 34 days, United Kingdom 28, days Canada 26 days, Korea 25 days, Japan 25 days, U.S. 13 days. Perhaps it's because Americans have relatively few vacation days that they use them well.

More statistics....Gross National Product (GNP) Percentage of World GNP...USA 32.9%, Japan 13.4%, Germany 6.0%, Britain 4.6%, France 4.2%, China 3.7%, Italy 3.5%, Canada 2.3%, Mexico 2.0%, Spain 1.9%. You will note that there is an inverse relationship with the number of holidays and GNP. Here we go again.... You can't have your cake and eat it too. Vacations vs. Money.

Chinese people are concerned with Quality of Life much more now, especially young generation, they know how to get loan from bank, they borrow money for studying, traveling, housing...for everything. They know life is short, if they saved money and waited for inflation, that means they did not make the money. I personally support this idea, we can not expect what will happen tomorrow, we can only enjoy today.

Chinese people now also have much more holidays than before, government started the two-golden-week a few years ago, that is the first week of May and October, the purpose is to develop tourism and create more employment, people now go out for holidays, even go abroad for vacation.

In closing

I can feel the distance from China and the outside world is shortening day by day in every aspect, we are becoming more internationalized, I am more pound of being a Chinese now, the feeling of "I love China" is getting stronger inside me.

People all said America is a dream land, I am not sure what dream I can fulfill there. To see is to believe, I only saw a small part of America, I still have strong interest.No matter where we live, we need to be happy, that is important. Right? I believe that the key to happiness is balance. Coming from the country that "invented" this way of thinking (Taoism), this is part of our religion. I also believe that happiness comes from friendship and understanding.

Nina