EXTRANCHECK: POST-SHIPMENT VERIFICATION: CLARIANT

UNCLAS NEW DELHI 002411 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: CLARIANT COLOR-CHEM LTD., RAIGAD DISTRICT, MAHARASHTRA, LICENSE D350149 REF: USDOC 03133 ¶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 and BIS FSN Prem Narayan conducted a Post-shipment Verification (PSV) at Clariant Chemicals (India) Ltd. (Clariant),Raigad District, Maharashtra, on May 4, 2007. Clariant is located approximately 150 kilometers south of Mumbai. ¶3. BIS requested a PSV at Clariant, a private sector company, located at: 113/114, MIDC Industrial Area, A.V. Roha, A.V.P.O. Dhatav Taluka Roha, Raigad 402116, Maharashtra, Tel: 91-2194-263513, Fax: 91-2194-263515, Email: abhijit.naik@clariant.com, Website: www.clariantindia.com. GIL was listed as the Ultimate Consignee; Lutz-Pumpen GmbH and Co., Wertheim, Germany as the Foreign Purchaser; and Shanbhag and Associates (Shanbhag),Mumbai as the Intermediate Consignee for one Model 5702-080 1-inch air-operated, double diaphragm pump controlled under ECCN 2B350. The license applicant was Lutz-Jesco (Lutz-Jesco) America Corp., Rochester, NY. ¶4. ECO and Narayan met with A.G. Naik (Naik),Vice President, Production Services, Region India, Head of Site, Roha; Udyan Thite (Thite),General Manager, Production & Technology; and V.R. Shoor (Shoor),Manager, Plant Engineering Production Services, Clariant. ¶5. Clariant representatives were not aware of the BIS regulations. This was the first USG or BIS official visit to Clariant. Naik did not recall receiving final BIS export license conditions either from Lutz-Jesco or Shanbhag who is an exclusive distributor of Lutz-Jesco in India. Shoor provided a copy of the Shanbhag Quotation for the Lutz-Jesco pump, Clariant Purchase Order and End-Use Statement, Shabhag Delivery Challan reflecting the pump's delivery at Clariant on April 24, 2006. Clariant received the quotation from Shanbhag on October 23, 2005, Clariant issued the purchase order and the End-Use Statement on October 25 and October 27, 2005 respectively, but Shanbhag delivered the pump late April 2006. ¶6. Thite confirmed the stated end-use of the air-operated pump for unloading/transferring of liquids, mainly phosphorus oxy trichloride (POCL3),from tanks/drums into various processes for manufacturing intermediates for pharmaceuticals and agrochemicals. The end product is then sold to medicine and agrochemical manufacturers. ¶7. Naik stated that they were unable to stop leakages in the chemical transferring process by using locally-manufactured pumps. Clariant sources various products from Shanbhag for their plant. Per Shanbhag's advice, Clariant purchased the Lutz-Jesco pump from them. After successfully using it for a pilot project, Clariant is now using it for commercial production. Naik stated that the Lutz-Jesco pump enabled them to prevent corrosion caused by caustic liquids. ECO and Narayan were given a tour of the Clariant plant including the chemical reactor area where the pump was operating. The BIS Team noted the serial number as 123901. Clariant plant is run in three shifts and is guarded 24 hours a day. ¶8. Established in 1978, Clariant is a Swiss company having five locations in India to manufacture pigments, textile chemicals, leather chemicals, diketene-based agro intermediates and pharmaceutical intermediates. The plants are located at Thane, Raigad, Khopali, Maharashtra; Kanchipuram, Tamilnadu; and Cuddalore, Pondicherry. Clariant has 130 manufacturing sites worldwide. The net worth of the Clariant Group worldwide is approximately $850 million. The Raigad plant manufactures textile, leather and paper chemicals; functional chemicals; and agro and pharmaceutical intermediates. Of the total production, 40 percent is exported to European countries and the United States. Clariant's sales in FY 2006 were approximately $200 million including $76 of the Raigad plant. Clariant employs approximately 1,200 personnel India-wide including 420 at Raigad plant. ¶9. Recommendation: Post recommends Clariant Chemicals (India) Ltd., "Raigad Plant", as a reliable recipient of the controlled U.S. origin commodity. All indications are that the listed commodity is used in accordance with U.S. Export Control Regulations. (PSCUSHMAN/PNARAYAN) Mulford