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RR RUEHWEB

DE RUEHNE #0694/01 0431123
ZNR UUUUU ZZH
R 121123Z FEB 07
FM AMEMBASSY NEW DELHI
TO RUCPDOC/USDOC WASHDC
RUEAHLC/HQ ICE IAO WASHINGTON DC
INFO RUEHC/SECSTATE WASHDC 2910

UNCLAS NEW DELHI 000694 
 
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: KENNAMETAL WIDIA 
INDIA LTD., BANGALORE, LICENSE NO. D347236 
 
REF: USDOC 0380 
 
¶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 Post-shipment Verification (PSV) at 
Kennametal Widia India Ltd. (Kennametal), Bangalore, on January 20, 
¶2007. 
 
¶3. BIS requested a PSV at Kennametal, a private sector company 
located at: 8/9 Mile, Tumkur Road, Bangalore 560073, Tel: 
91-80-2839-0126, Fax: 91-80-2839-4325, Email: 
Ramakrishna.avs@kennametal.com, Website: www.Kennametal.com. 
Kennametal was listed as the Ultimate Consignee for two shipments of 
Inco nickel powder consisting of 317 and 211 kilograms controlled 
under ECCN 1C240.  The license applicant was Novamet Specialty 
Products Corp. (Novamet), Wyckoff, NJ. 
 
¶4. ECO along with FSN Narayan met with A.V.S. Ramakrishna 
(Ramakrishna), Senior Manager - Sales Administration & Planning, 
Engineered Products Group (EPG); G. Nagarajan, Senior Manager - 
Research and Development; T.K. Manjunath (Manjunath), Manager, 
Purchase; and R. Ramesh (Ramesh), Assistant Manager - Purchase - 
Imports, Kennametal. 
 
¶5. Kennametal executives were aware of certain BIS regulations. 
However, this was the first USG or BIS official visit to Kennametal. 
 They have been party to previous BIS export licenses.  Manjunath 
provided a copy of the Kennametal Purchase Order, Novamet End-User 
Certificate acknowledging and agreeing to abide by the BIS export 
laws, Novamet Invoices reflecting their 500 kilograms of nickel 
powder, and Kennametal disposition log for nickel powder. Although 
Kennametal completed an end-user certificate, the company did not 
appear to have been sent the actual conditions of D347236 by Novamet 
(as was itself a condition of the above export license).  As a 
result, ECO read the conditions of D347236, as shown in reftel, to 
all in attendance.  They acknowledged that they understood those 
conditions. 
 
¶6. During the production of the above documents, Ramesh stated that 
Kennametal had received additional prior imports of Type 123 Nickel 
Powder, from Novamet.  In addition to the above documents, 
specifically related to D347236, Ramesh produced Novamet Invoice 
25154, dated 05/03/05 showing the sale of 100 kilograms Nickel 
Powder Type 123, Novamet Invoice 26029, dated 10/31/05, showing the 
sale of 200 kilograms Nickel Powder, Type 123.  In addition, Menlo 
Freight Forwarder Air Waybill "Office Copy" No. 542 944 3591 1 was 
affixed to Invoice 26029.  Those two shipments, received by 
Kennametal previously, did not appear to have been affected by 
Novamet with the use of an export license. 
 
¶7. Ramakrishna stated that Kennametal Widia India Ltd.'s name 
changed to Kennametal India Ltd. in February 2006.  He confirmed 
that the end-use of the nickel powder is for the manufacture of 
tungsten carbide.  It is used to make carbide tools and carbide 
inserts primarily for machine tools, automotive components, and 
metal parts manufacturers.  The Kennametal's EPG closely work with 
their customers to find solutions for them and make customized dies. 
He stated that nickel is a binder material.  For making dies, the 
raw material is machined in the shop to bring it to the required 
shape and size and subsequently it is sintered along with the nickel 
powder and lubricants in a vacuum chamber.  The whole process 
improves the strength and properties of a metal for high wear 
resistance. 
 
¶8. ECO asked the Kennametal executives if there was ever an instance 
when they had been asked to sell the raw Nickel Power, Type 123.  To 
that question, Ramakrishna stated there had not, and added that 
Kennametal would never sell that product to anyone else. 
Ramakrishna added that it is needed for the manufacturing process 
there, and they understand the export license conditions prohibiting 
such a transfer. 
 
¶9. After the meeting, ECO and FSN Narayan were given a brief tour of 
the Kennametal manufacturing facility and were educated on the 
process of how the nickel powder is used for making dies.  ECO and 
FSN Narayan were also given a tour of the storage area where the 
unused nickel powder is housed, in a locked building.  The 
Kennametal building is guarded 24 hours a day. 
 
¶10. Established in 1964, Kennametal is a wholly owned subsidiary of 
Kennametal, Inc. headquartered in Latrobe, PA.  Kennametal is one of 
the leading suppliers of tooling, engineered components and advanced 
materials that are consumed in production processes.  Kennametal's 
 
products use highly complex metallurgy and materials science in 
tungsten carbide powders, high-speed steels, ceramics, industrial 
diamond and other materials that are particularly resistant to heat, 
abrasion, pressure and wear. Kennametal customers include 
automobile, automotive components, metal parts manufacturers and GOI 
owned Indian ordnance factories.  Kennamtel has branch offices in 
all major cities in India including Bhopal, Madhya Pradesh; 
Chandigarh, Chennai, Tamilnadu; Hyderabad, Andhra Pradesh; Kolkata, 
Mumbai, Pune, New Delhi, Jamshedpur and Ranchi.  Kennametal sales 
turnover for FY 2006 exceeded $90 million including & $17 million of 
its EPG.  Kennametal employs approximately 950 personnel 
India-wide. 
 
¶11. Recommendation: Post recommends Kennametal India Pvt. Ltd. as a 
reliable recipient of the controlled U.S.-origin commodity.  All 
indications are that the listed commodity is being used in 
accordance with U.S. Export Administration Regulations. 
(DNARDELLA/PNARAYAN) Mulford