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We make them, but how do we use them?

As a participant in the writing instrument industry I suppose I like many of us get caught up in the day to day business of making and selling pencils, pens, markers, various components, etc. We focus daily on the details of communicating with and understanding the needs of our customers; analyzing and improving costs and quality, planning and keeping up with growth trends by market segment and assessing our competitors. Many even have made detailed efforts to better understand the actual use of our products from the perspective of the artist, the student, the office worker, the carpenter, perhaps even the Astronaut. Collectively as an industry we know everything there is to know about making and selling pencils and pens.

But how do we use pencils and pens ourselves? Do we see these simply as the products through which we make our living? Or is there a creative group among us actively using our own products for writing, journaling, drawing or some other means of self expression? As a multi generational family participant in the pencil industry I feel a strong personal affinity and tradition related to our company’s products and the role these products eventually play in allowing people to express themselves or contribute to the learning process.

For my own part I have never considered myself to be a very artistic person. I have experimented with both journaling and drawing, though I cannot claim to be particularly talented or committed to regular practice of either. It’s usually something I’ll do during a vacation; writing in my fishing journal about that day’s adventure and including a simple sketch. I find that it’s a relaxing and refreshing activity when I’m in a reflective mood in the evening.

A couple years back given the encouragement and gift of drawing and sketching pencils from our good friends at General Pencil Company I once spent several days during our annual Christmas holiday on Little St. Simons Island trying my hand at sketching. I worked from a book on how to draw animals and these are the photos of some of what came of that experiment. I tried a bit of color pencil drawing, but found that’s not yet within my capability.

So what are your own creative efforts with pencil, pen or paint? Share a comment or e-mail me a digital photo of your own efforts and I’ll include it in a follow up post. If you don’t think your the artistic type you’ll never know unless you give it the effort. For a little inspiration visit General’s Art Gallery.

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US Pencil Imports Continue Growth

The latest update to US import statistics for wood cased pencils support the growth trend experienced for some years now. Over the past 5 years through 2004 pencil imports into the US have increased at an average annual rate of 6.0% on a dollar value basis and of 7.8% on a unit volume basis. This is reflects an average annual reduction of 1.8% in import prices over this period. In total 2004 unit volume imports were 17.6 million gross (this 2.5 billion pieces for the year or almost 9 pencils per capita).

Our own estimates indicate that imported pencils now represent approximately two-thirds of the total US annual consumption on a unit volume basis. We estimate that the share of US manufactured pencils has dropped from around 50% of the market just three or four years ago. Given net higher average average wholesale prices of US based production the dollar market share of imports is certainly less than that of import unit volume share. Of course a number of the US producers are also selling imported pencils or also adding further manufactured value to imports of semi-finished product so the US producers total share of US consumption is not quite as bleak as indicated purely by the import statistics. Also total wood cased pencil consumption does seem to be on the rise overall and 2005 is shaping up to be a good year, though the specific growth rate year on year is a bit more of a challenge to accurately analyze. Regardless, the continuing challenges to US based pencil manufacturing remain clear.

Looking at 2005, the Year-to-Date May figures are up just 1.6% on a dollar value basis and an astounding 21.0% in unit volume vs. the same period in 2004. This indicates a significant 12.8% average import price reduction year over year. If sustained through year end the percentage increase in volume would be the largest since 1996 and the reduction in average import prices year on year would be the largest ever. In 1997 there was an 11.3% reduction reflecting the largest single year price deflation of import pencils at the wholesale level.

Another surprising aspect of import figures thus far in 2005 is the indication that the most significant import growth is not coming from China which traditionally has the largest share of imports to the US market. In fact YTD May Chinese pencil imports are off 10.4% on a volume basis. The main growth thus far in 2005 is driven by imports primarily from Costa Rica, Indonesia and Thailand and a few other countries in smaller proportion. Key countries with declining shipments to the US so far this year are China and Brazil.

It is difficult to project such trends through the full year due to seasonal factors, the most notable being that distribution channels load up in the early part of the year to prepare for back-to-school shipments. So the final wood cased pencil import picture and trends by country may yet be different by year end. Other issues that may impact these trends this year or as we look forward to 2006 are the recent decision by China to allow the Yuan to float and changes in relative anti-dumping duty rates on Chinese imports for some manufacturers. See my upcomming discussion and update on anti-dumping and other pencil trade issues next week.

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