Identifier
Created
Classification
Origin
08KUALALUMPUR712
2008-08-11 08:55:00
UNCLASSIFIED
Embassy Kuala Lumpur
Cable title:  

BLUE LATERN RESPONSE ON PRE-LICENSE END-USE CHECK

Tags:  ETTC KOMC MY 
pdf how-to read a cable
VZCZCXYZ0011
PP RUEHWEB

DE RUEHKL #0712/01 2240855
ZNR UUUUU ZZH
P 110855Z AUG 08
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC PRIORITY 1469
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RHMFIUU/FBI WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHMFIUU/HQ BICE WASHINGTON DC PRIORITY
UNCLAS KUALA LUMPUR 000712 

SIPDIS

PM/DTCC - BLUE LANTERN COORDINATOR

E.O. 12958: N/A
TAGS: ETTC KOMC MY
SUBJECT: BLUE LATERN RESPONSE ON PRE-LICENSE END-USE CHECK
ON APPLICATION 050107895

REF: SECSTATE 67213

UNCLAS KUALA LUMPUR 000712

SIPDIS

PM/DTCC - BLUE LANTERN COORDINATOR

E.O. 12958: N/A
TAGS: ETTC KOMC MY
SUBJECT: BLUE LATERN RESPONSE ON PRE-LICENSE END-USE CHECK
ON APPLICATION 050107895

REF: SECSTATE 67213


1. Pursuant to reftel, Econoff and local staff successfully
contacted Arrixon Synergy Sdn Bhd and DRB-HICOM Defense
Technologies Sdn Bhd, both of which are 100 percent
Malaysian-owned companies. This contact was regarding
Arrixon and DRB-HICOM Defense Tech wishing to purchase 20 fan
drives and 10 hydraulic pumps for the Turkish-manufactured
"Adnan" armored personnel carrier (APC),which is based on
the 40-year old design of the old U.S. M-113 APC design.
DRB-HICOM Defense Tech was easy to contact and easily
provided answers to reftel questions. Arrixon also -- after
significant prodding and a threat of declining the deal --
provided answers to the questions. Site visits to both
companies were not possible due to limited Embassy staff
resources.


2. Regarding DRB-HICOM Defense Technologies, Head of
Business Development & International Sales Major (ret.)
Godfrey Chang provided the following:

A) DRB-HICOM Defense Technologies -- which is a subsidiary of
the large Malaysian car manufacturer DRB-HICOM -- confirmed
that it had placed an order for the items listed in reftel
for the Malaysian armed forces. The company said that the
engine parts are for the Adnan APC. Currently the Malaysian
military has 211 Adnan APC's, with a requirement for 48 more.


B) The company indicated that it was established in 1994 and
has its headquarters in the Shah Alam area outside KL. It
has been importing and selling defense equipment to the
Malaysian military since that time. The company also imports
various defense equipment and technology for other countries
for sale to the Malaysian military, including defense
companies in the United Kingdom, France, Germany,
Switzerland, and others.

C) The company said that it is very familiar with the
restrictions on unauthorized re-export and re-transfer of
U.S.-origin defense equipment.

D) Regarding other products sold by the company, DRB-HICOM
said that they import U.S.-manufactured Bushmaster 25mm
cannons (for the Adnans),plus Allison automatic gearboxes
and transmissions for the Adnans and heavy military transport
trucks.

E) DRB-HICOM said its customer base consists almost
exclusively of the Malaysian armed forces. The company's
primary manufacturing plant is in Pekan, Pahang.



3. Regarding Arrixon, company representative Mazlinawati
Jafaar provided the following:

A) Arrixon confirmed that Mr. Mohd Rais Ismail of the company
placed an order for the said items for the Malaysian armed
forces. Arrixon said that it submitted the DSP-5 form as
requested by the supplier, stamped and signed by the
Malaysian Ministry of Defense. The parts are to be used for
the military's Adnan vehicles which uses the DDC engine, and
that Arrixon is the authorized DDC engine supplier.

B) Arrixon said that it was established in 2003, has been in
the business of importing and selling defense equipment since
2005, and currently imports goods from Turkey, Taiwan, the
United Kingdom, and the United States. Most of the company's
imported goods are for military purposes. The company said
that the engine parts are the only item that has caused them
to fill out the DSP-5 form.

C) The company said that it is familiar with the restrictions
on unauthorized re-export and re-transfer of U.S.-origin
defense equipment. Arrixon said that this is clearly
conveyed on the DSP-5 form.

D) Regarding other products sold by the company, Arrixon said
that they also sell gauges (VDO/Murphy),electronic systems
(Tyco/Eaton),generators (Tepas),and other products such as
lubricants and grease.

E) Arrixon said its customers are locally based, including
its primary customer -- the Malaysian military -- but also:
Alam Maritime Sdn Bhd in Kemaman and Terengganu; Bumi Armada
Sdn Bhd in Kemaman and Terengganu; BASF Petronas Chemicals in

Gebeng and Pahang; Plexsys Chemicals in Gebeng and
Terengganu; and DRB-Hicom Defence Technologies in Shah Alam
and Selangor.



4. Regarding reftel proposed inquiry with proposed host
government official, neither ECON nor ODC could identify or
contact the individual mentioned with the limited contact
data provided in reftel. However, based on the positive
experiences in dealing with DRB-HICOM Defense Tech and
Arrixon Synergy and their satisfactory answers and
assistance, we recommend approval of the proposed sale.
KEITH