<B>Brazilian Papermaker Buying Pulp Producer</B>

Industrias Klabin de Papel e Celulose SA, Brazil's largest paper maker, will buy control of Riocell SA, a wood-pulp-producing subsidiary.

Klabin decided to take control of Riocell at the request of Riocell's main shareholders, Previ and Petros, two of Brazil's biggest pension funds, and the National Development Bank, or BNDES, said Klabin director Josmar Verillo.

"Because Riocell shares aren't traded, Riocell shareholders . wanted liquidity, which they got by acquiring Klabin shares, which are traded," Verillo said.

He said Klabin brought from the deal a promise by BNDES of financial support for its $510 million purchase in August of Igaras SA, a big paper-packaging company, a purchase he said allowed Klabin to consolidate its paper-packaging market share.

Verillo said now that Riocell is wholly-owned by Klabin, rather than by a number of shareholders, it will be easier to form partnerships with companies willing to invest capital in Riocell, a maker of mostly-for-export eucalyptus pulp. Such partnerships would also allow Klabin to focus on its core business, producing paper-packaging materials such as corrugated cardboard boxes.