Rothschilds of the South

Businessmen who live high on the hog irritate a Brazilian intellectual named Israel Klabin. "In an underdeveloped country," says Klabin, "there can be no elite." Yet Klabin himself, a businessman as well as a Sorbonne graduate, belongs to--and prizes membership in --an elite of sorts. At 36, he is one of Brazil's brightest young businessmen and the primus inter pares of an unusual family whose members share equally the profits and responsibilities of running a $130 million business complex. "We are," says Israel Klabin, "something like the Rothschilds."

The ten brothers, sisters, cousins and nephews who are at the center of the dynastic Klabin clan completely own a group of ten companies that mine minerals, raise cattle, grow coffee and manufacture paper, tiles and textiles. They have just completed a $30 million plant expansion that will more than double their newsprint capacity to 135,000 tons, reduce Brazil's paper imports by a third. Hoping to further Brazil's development and the family fortune simultaneously, they plan to build two new plants to make paper and tile as soon as Brazil's runaway inflation slows down a bit.

Modest Living. Like many of Brazil's industrial big rich, the Klabins are relative newcomers who have benefited from the country's expanding markets, its hunger for European skills and its easy tolerance of immigrants. Four of them left Latvia for Brazil near the turn of the century and opened a plant to convert rags into paper. Gradually, the family founded or acquired other companies, and at the start of World War II were asked to build a huge paper mill by Dictator Getulio Vargas, who feared that the war would cut off Brazil's paper imports. When the Klabins objected that a U.S. gearing for war would not export machinery for the plant, Vargas telephoned Franklin Roosevelt and got the Klabins what they wanted.

The Klabins have built up their vast enterprises with equal measures of fierce family loyalty, business acumen, political sagacity and social awareness. They lived modestly, had their children educated in Europe, invested their earnings in new plants and won political favor by acquiring a reputation for public service. A grandson of an original Klabin, Horacio Lafer, 63, who is an active partner in the Klabin business enterprises today, has served as Brazil's Foreign Minister and Finance Minister, and amazed everyone in 1951 by balancing Brazil's budget.

Good Night & Goodbye. The Klabins' no-nonsense tradition is carried on by Israel Klabin, who considers himself "a troubleshooter and a father confessor" for his family's business. Last year, despite Brazil's eroding currency, the business grossed well over $60 million. As to which of the many branches is the most profitable, that is a secret the family holds tightly. "I always remember what my father told me about Baron Rothschild," says Israel Klabin. "When he was dying, Rothschild called in his sons and said: 'I have only two things to tell you. Never show your books, and good night and goodbye.' '

This file is automatically generated by a robot program, so reader's discretion is required.