EXTRANCHECK: POST-SHIPMENT VERIFICATION: GRANULES INDIA

UNCLAS NEW DELHI 002062

SIPDIS

SIPDIS

USDOC FOR 532/OEA/M. NICKSON-D/JAY HATFIELD
USDOC FOR 3131/USFCS/OIO/ANESA/KREISSL
USDOC FOR 4530/MAC/ANESA/OSA
ICE HQ FOR STRATEGIC INVESTIGATIONS
STATE FOR EB/ESP

E.O. 12958: N/A
TAGS: ETTC ETRD BEXP IN
SUBJECT: EXTRANCHECK: POST-SHIPMENT VERIFICATION: GRANULES INDIA
LTD., HYDERABAD, LICENSE D350160

REF: USDOC 03134


1. Unauthorized disclosure of the information provided below is
prohibited by Section 12(c) of the Export Administration Act.


2. Export Control Officer (ECO) Paul Cushman, Former ECO Michael
Rufe and BIS FSN Prem Narayan conducted a Post-shipment Verification
(PSV) at Granules India Ltd. (GIL) Hyderabad, on April 18, 2005.


3. BIS requested a PSV at GIL, a private sector company, located at:
8-2-293/A/A2, Road No. 2, Banjara Hills, Hyderabad 500033, Tel:
91-40-2355-3266, Fax: 91-40-2354-7894, Email:
nageshgvr@granulesindia.com, Website: www.granulesindia.com. GIL was
listed as the Ultimate Consignee; Lutz-Pumpen GmbH and Co.,
Wertheim, Germany as the Foreign Purchaser; and Shanbhag and
Asociates (Shanbhag),Mumbai as the Intermediate Consignee for 1
Model 5700-100 1/4-inch Air operated double diaphragm pump
controlled under ECCN 2B350. The license applicant was Lutz-Jesco
(Lutz-Jesco) America Corp., Rochester, NY.


4. BIS Team met with G.V.R. Nagesh (Nagesh),Senior General
Manager-Operations, R.B. Muralidhar (Muralidhar),Deputy General
Manager-Plant Operations, and S. Bhavani (Bhavani),Head - Supply
Chain Management, GIL.


5. GIL representatives were not aware of the BIS regulations. This
was the first USG or BIS official visit to GIL. Bhavani stated that
initially GIL issued a purchase order to Shanbhag to purchase the
pump covered under this license. Because Shanbhag could not fill
the order in a timely fashion, GIL cancelled the purchase order and
purchased a locally-made pump from a different supplier for similar
product application. Subsequently, Shanbhag insisted that since the
licensed commodity was imported in the name of GIL, they should
purchase it. She stated that keeping the future requirement in
mind, GIL decided to purchase the pump and issued a fresh purchase
order in favor of Shanbhag.


6. Bhavani provided a copy of the GIL Corporate Brochure, GIL old
and new Purchase Orders, Shanbhag Tax Invoice, GIL End-Use
Certificate and Shanbhag Delivery Challan reflecting that GIL
received the pump on September 10, 2006.


7. Nagesh confirmed the stated end-use of the air-operated pump for
unloading/transferring of liquids, mainly liquid bromine, from
tanks/drums into various processes for manufacturing active
pharmaceutical ingredients and bulk drugs. The end product is then
sold to medicine manufacturers for making tablets and capsules. The
pump is currently not being used since Shanbhag was unable to
deliver it in time. The pump has not been used yet and is
maintained as a back-up. The BIS Team was given a tour of the supply
room where the pump is stored in a lockable cabinet. The pump was
removed from its packing carton for BIS Team to see and note the
serial number. The serial number is 123910. The BIS Team was also
given a tour of the plant where the pump ultimately will be used.
The GIL plant runs in three shifts and is guarded 24 hours a day.


8. Established in 1984, GIL is a public limited company,
manufactures active pharmaceutical ingredients (APIs) and
pharmaceutical formulation intermediates (PFIs). GIL is a 100
percent export-oriented unit and exports to manufacturers of
capsules, granules, and tablets. GIL's PFI plant is approved by the
U.S. Food and Drug Administration (FDA),Australian Therapeutic
Goods Administration (TGA),German Health Authority, and Canadian
TPD. GIL manufactures approximately 25 products including
acetaminophen/paracetamol, brompheniramine maleate,
dichloralphenazone, isometheptene mucate, ismotheptene base,
guaifenesin, methocarbamol, metformin HCI, eylometazoline HCI,
phenazopyridine HCK, pamabrom, phenultoloxamine and citrate. Its
sales turnover for FY 2005-06 was approximately $43 million.


9. Recommendation: Post recommends Granules India Limited as a
reliable recipient of the controlled U.S. origin commodity. All
indications are that the listed commodity will be used in accordance
with U.S. export control regulations. (PSCUSHMAN/PNARAYAN) Pyatt