EXTRANCHECK: PRE-LICENSE CHECK: BIHAR CAUSTIC & CHEMICALS

UNCLAS NEW DELHI 000692 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: PRE-LICENSE CHECK: BIHAR CAUSTIC & CHEMICALS LTD., REHLA, PALAMAU, JHARKHAND, LICENSE NO. D369258 REF: USDOC 00499 ¶1. Unauthorized disclosure of the information provided below is prohibited by Section 12(c) of the Export Administration Act. ¶2. Acting Export Control Officer (ECO) David Nardella and BIS FSN Prem Narayan conducted a Pre-license Check (PLC) at Bihar Caustic & Chemicals Limited (BCCL),Jharkhand, on February 9, 2007. ¶3. BIS requested a PLC at BCCL, a private sector company located at: Rehla, Palamau, Jharkhand 822124, Tel: 91-6584-26221, Fax: 91-6584-262205, Email: jnprasad@adityabirla.com. Website: www.adityabirla.com. BCCL was listed as the Ultimate Consignee and Blue Star Ltd. (BSL),Mumbai, as the Foreign Purchaser for one Model 3196 nickel construction NaOH centrifugal pump controlled under ECCN 2B350. The license applicant was Goulds Pumps, Inc. (Goulds), Seneca Falls, NY. ¶4. ECO along with FSN Narayan met with R.K. Sinha (Sinha),General Manager (Operation),J.N. Prasad (Prasad),Deputy General Manager (Materials),Pankaj Thakur (Thakur),Deputy Manager (Materials),and S.K. Chakraborty (Chakraborty),Deputy Manager (Maintenance),BCCL. ¶5. BCCL representatives were not previously aware of the BIS export regulations. This was the first USG or BIS official visit to BCCL. Prasad stated that BCCL dealt with BSL for this transaction. He provided a copy of the BCCL Purchase Order. Chakraborty recalled that BCCL submitted an End-Use Statement for the pump on order but that was untraceable in their files. He promised that he would send it later. ¶6. Sinha stated that in 2006 they converted their plant from mercury cell technology to membrane cell technology. He stated that mercury cell technology became obsolete and is hazardous to atmosphere. Most plants using mercury cell technology are being shut down worldwide. The membrane cell technology is environment friendly. ¶7. Sinha stated that they have been using similar Goulds centrifugal pumps of different parameters and capacities. He confirmed the stated end-use of the centrifugal pump it will be used to circulate caustic soda. Four centrifugal pumps are attached with several electrolysers to circulate caustic soda into various manufacturing processes for making the end product. They have license to produce 48 percent of concentration of the caustic soda. Initially they produce the caustic soda at 32-33 percent of concentration and through an evaporation process, they make it up to 48 percent concentration. ¶8. There are two Goulds pumps operational at BCCL's Caustic Evaporation Unit that are equipped with to handle high temperatures. Movement of Caustic Soda at higher than 85 degree Celsius, requires a nickel construction pump. The pump on order will be for stand by for any repair or breakdown in these two pumps. Sinha stated that nickel construction pumps are not available locally. He stated these are sophisticated pumps and have long life span. To prevent leakages of liquids and to save on maintenance costs they prefer to use nickel construction pumps. They are fully equipped with high-pressure flow and to handle high temperature conditions. BCCL needs this standby pump due to the plants 24 hours operation. ¶9. The 80-85 percent of the caustic soda is produced for BCCL's sister concern Hindalco Industries Ltd. based in Renukoot, Uttar Pradesh. The remaining 15-20 percent is sold to soap, paper and chemical manufacturers. ¶10. After the meeting, ECO and Narayan were given a tour of the BCCL plant. They were shown the actual site where the stand-by centrifugal pump will be housed. They were also shown the lockable shed where it will be stored until needed. ECO asked Chakraborty if BCCL would consider selling the Goulds pump on order? To that question, he said no, it is required for producing the caustic soda at the BCCL plant. It will not be used to support any Nuclear, Weapon, CBW, or Missile Applications. ¶11. Established in 1984, BCCL is one of the companies of the Aditya Birla Group of Companies (ABG). ABG is one of the largest business houses in India having business interests in various metals, cement, automobile tires, textiles, fertilizers, chemicals, mining, insulators, palm oil, software development, telecommunications, finance, insurance and retailing stores. ABG has manufacturing facilities in approximately 15 countries and employs approximately 82,000 employees. BCCL manufactures caustic soda lye, liquid chlorine, hydrochloric acid, sodium hypochlorite and hydrogen. It produces the caustic soda approximately 225 tons per day. BCCL's customers include soap, paper, chemicals and aluminum manufacturers. BCCL's sales turnover for FY 2006 was approximately $34 million. It employs 300 personnel. ¶12. BCCL employees advised that that they received a Goulds pump, with nickel impeller, in December of 2006. This pump was in operation and viewed by the ECO and Narayan. That pump was a Goulds 3196 MTX, with serial number 726246. Chakraborty advised that the MTX is a smaller model then the STX which is the subject of this PLC. ¶13. Recommendation: Post recommends Bihar Caustic & Chemicals Ltd. 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 Administration Regulations. (DNARDELLA/PNARAYAN) Mulford