I was a private equity analyst in the 90's and we owned Berol - one of the classic American pencil companies. Their classic wood pencils were made the exact same way - batch oriented and quite labor intensive.
Their next gen process was a fully automated continuous process co-extruder that extruded a core of hot graphite surrounded by a cellulose/wood mixture. That continuous string of graphite/wood composite was pulled down a two hundred foot line where it was cooled, sealed, painted twice, varnished, cut, capped with erasers and boxed. The whole line could be operated with two people.
Their next gen process was a fully automated continuous process co-extruder that extruded a core of hot graphite surrounded by a cellulose/wood mixture. That continuous string of graphite/wood composite was pulled down a two hundred foot line where it was cooled, sealed, painted twice, varnished, cut, capped with erasers and boxed. The whole line could be operated with two people.