Economy & Market

Mediation in real estate sector

Published

7 years ago

April 30, 2018

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Implicit or explicit agreements are a way of human life; contracts, written and unwritten, pervade our day to day lives, and govern our relationships, interactions and transactions. And, as long as there will exist contracts, there will be scope of disagreements and disputes, simply because, no agreement can be so detailed as to cover all possibilities and connotations, and close all loopholes for disputes. Conflicts inevitably arise due to opposing interpretations of open-ended or subjective clauses, occurrence of unforeseen events, situations going beyond the control of either party, loss of trust, bankruptcy, inadequate upfront disclosures and such other issues. Disputes fester until resolved, and therefore, dispute resolution mechanisms assume great relevance in our lives, businesses and society as a whole.
Historically, in India we have been too much over dependent on the formal justice systems, meaning the courts, and have somehow not given alternate/informal resolution of disputes the place that these deserve. May be this is due to the hangover of our colonial legal systems, or perhaps due to absence of enabling legislation or even due to our cultural biases. In any case, the result has been a huge backlog of cases in civil suits and criminal cases clogging up the judicial pipeline up to the Supreme Court, leading to the unfortunate phenomenon of justice being inordinately delayed, and thus effectively denied.Real estate/construction sector:The context
The total number of cases pending in our courts is in excess of three crore. The real estate industry in India has more than its rightful share of unfulfilled promises, delayed payments and/ or deliveries, intransparent regulations, cases of apparent abuses of dominance, reported non-compliances, defects in construction quality, commercial issues around valuations, taxes, etc., – all giving rise to obvious disputes and consequent litigations moving at a slow pace through our labyrinthine adjudication processes, such that the litigants’ grandchildren ultimately settle suits filed by their grandfathers.
If we were to expand the domain of real estate to include all land and immovable properties, the intensity of real estate disputes in family as well as corporate sectors will appear to be mind boggling. Given this stifling ambience, the sector was ripe for some interventions and disruptive regulatory changes. And, these have now arrived in the form of Real Estate Investment Trust (REIT) and Real Estate Regulation Bill. Although some of the rules/ clarifications are still awaited, and the Regulator Bill will only have teeth once all the states get their act in place by appointing the regulators, one must accept that these are very welcome developments which may nip some of the potential litigations in the bud. But this will only be clear as things unfold around these regulations.
Besides these regulatory developments, we also have a very healthy and active Competition Commission and Consumer Courts, both of whom have been seen to be visibly active and supportive of the consumers. The welcome entry of private equity/foreign institutional investors in the real estate space will no doubt force improvements in governance standards in the sector. All these augur well for the future, although the present situation remains dismal and disappointing, to say the least.Diverse stakeholders
In this scenario, congested with disputes and litigations, the thought of mediation comes along as a whiff of fresh air. Any process of dispute resolution which works on the principle of the disputants working together to arrive at an amicable win-win solution and an agreement that normally is not up for further court room activity, has to be like a god-sent tool! However, considering that the sector has a very diverse group of stakeholders pulling apart vigorously in different directions, it may not be an easy going journey for mediation.Who are the stakeholders? These are :
– Developers
– Contractors
– Consumers/buyers
– Land owners/farmers
– Landlords and tenants
– Regulators
– Special interest groups/NGO’s
– Lawyers and judges and arbitrators
For obvious reasons, some of the stakeholder groups might find it in their interest if the current spate of litigations continue unabated. To break this traditional pattern, some more disruptive interventions are required to change the mindsets.Possible role of mediation: How is it different?
In recent years, our world, and our society have witnessed a dramatic increase in litigation. Going to the courts to resolve disputes seems to be an almost instinctive reaction of our citizens. However, the underlying reality is that lawsuits can be financially and emotionally challenging for all the litigants, and can even have an adverse impact on our economic progress over the long-run, particularly when they immobilise businesses. While buyers and sellers of real estate usually are able to settle the smaller irritants that come up in the course of their deals, sadly many other disputes end up in the courts.
Fortunately, there are healthier alternatives to litigation for resolving disputes. Mediation is one such option that is growing rapidly in popularity in the developed economies-a path that has the potential to dramatically reduce the time and cost of resolving disputes. Mediation can be the first step of resolution between the parties.
Mediation is the term used to describe a relatively informal form of dispute resolution that occurs outside of the dysfunctional court system. In mediation, the parties are facilitated by a neutral third person called a mediator. The mediator is not authorised to impose a decision on the parties or even suggest settlements; instead the mediator only catalyses/ promotes negotiation between the disputants with the aim of helping them in reaching a mutually acceptable settlement of their dispute.
To understand how mediation is different from other dispute resolution processes, it is helpful to keep in mind that both litigation as well as arbitration are adjudicatory in nature wherein an empowered body/person(s) decide the outcome. In both these processes, the disputants automatically take up adversarial positions which lead to loss of trust and fissures in relationships. Perhaps the most attractive aspect of mediation which scores over the other choices (arbitration or litigation ) is that here, the disputants find no need to resort to appeals and prolong the dispute, since the settlement arrived at is mutually agrreable! So, it is clearly seen that mediation should be the first choice of people in the Real estate sector. But what needs to be done to popularise this mode of alternate dispute resolution?Way ahead
The following lines of actions can be recommended to make mediation the first choice of all parties:
1. Increase awareness about mediation, its positive effects, and why is it far far better than the traditional channels of adjudication that we know of. For this, a professionally designed communication campaign must be put in place by the government, the bigger corporate in the sector, the industry bodies and chambers, the large law firms, all acting together. For this purpose, an appropriate body may be formed by the Ministry to coordinate all aspects of this promotion drive, something similar to the PCRA or BEE, supported by a strong communication strategy and a commensurate budget.
2. We have to also nudge people towards mediation; for this, subject to legality, the government may make it mandatory/ recommendatory for all contracts/ agreements to have a clause stipulating mediation as the compulsory first stop in case of any disputes, much like the position enjoyed by the arbitration clause today. It has to be seen if this would require the passing of an appropriate act on mediation or not.
3. Thirdly, we have to strive to make mediation as friendly, soothing and as non-adversarial in reality, as it promises to be in theory. This can only be achieved if we avoid people with traditionally adjudicatory mindsets (such as most judges) who come from a position of power and authority, as well as people with deep-seated adversarial mindsets (such as most lawyers), as we create a facilitating kind of mediation universe in our country. Evidently, we do not need professionally judgemental personalities in this business, because a Mediator has to be the exact opposite of being judgemental. Obviously, people with insights into people’s mind, like those with education in behavioural sciences, and people with a negotiators bent of mind, like qualified interlocutors, as well as domain experts in relevant fields of dispute who, with their expertise will be able to quickly open up new and unseen opportunities of resolution, are the right kind of people to populate the roles of mediators. Anything less, will make Mediation stumble early on its journey, and it may quickly lose its appeal instead of gaining ground.
One can only earnestly hope that someone somewhere is listening, and will perhaps, consider to act on these suggestions.– SUMIT BANERJEE

Concrete

Lohia Corp Expands Global Footprint With Acquisitionof J.j. Jenkins Inc and Strategic Joint Venture With Omgm

Published

3 weeks ago

October 22, 2024

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Lohia Corp Limited (LCL) is pleased to announce two significant milestones that mark our
expansion in the global market.

We have successfully acquired J.J. Jenkins Inc. a respected name in machine manufacturing for
high-tech industries, through our US subsidiary, Leesona Corp, a 130-year-old pioneer in winding
machines. This acquisition aligns perfectly with our strategic vision to expand our specialty yarns
and tapes portfolio in medical and defence applications.

In addition, we have formed a strategic Joint Venture with Italy’s O.M.G.M. sas, leading to the
creation of OMGM Extrusiontechnik Srl. With LCL holding the majority stake. This JV represents
a significant diversification of our product portfolio, introducing solutions in Extrusion and
Winding systems for a variety of technical applications.

These advancements are not just about growth; they’re about bringing cutting-edge solutions to
our customers and contributing to industries that make a difference. Stay tuned for more updates
as we continue to push the boundaries of technology and engineering excellence.

Mr. R K Lohia, Chairman & Managing Director of Lohia Corp Limited, expressed his enthusiasm
about the new ventures “Both these new partnerships are a pivotal move that will broaden our
product offerings and provide our customers with even more choices and will enhance our
presence in the North America and European market, at the same time strengthen our presence
in all other global markets.”

About Lohia Corp Limited
Lohia Corp Limited (LCL) stands as a testament to the power of innovation and commitment to
excellence. As the flagship company of the Lohia Group, LCL has established itself as a global
leader in providing comprehensive solutions for the raffia industry.

With an impressive installation base of over 2,250 extrusion lines and 95,000 Circular Looms
across more than 100 countries, LCL’s influence in the plastic woven fabric and bag sector is
unparalleled. The company’s dedication to quality and efficiency has resulted in an astounding
plastic processing capacity of 7.7 million metric tons per annum of PP & PE.

LCL’s products, ranging from packaging systems for solid bulk materials to roof underlays and
tarpaulins, are not just industrial applications; they are the building blocks of industries
worldwide.

The company’s commitment to sustainability and innovation is the driving force that makes it the
world’s largest producer of machines for the raffia sector. As we look to the future, LCL’s legacy
of excellence is more than just a benchmark; it is a continuous journey towards pushing the
boundaries of possibility.

About J. J. Jenkins, Inc
J. J. Jenkins Inc. is a very respected name based out of North Carolina, USA. They remain at the
forefront of the synthetic fiber and monofilament industries. Their unwavering commitment to
innovation, quality, and customer satisfaction has not only set industry standards but also
fostered enduring partnerships with Fortune 500 companies including some in the medical and
defence industries.

Their holistic approach, combining state-of-the-art technology with unparalleled after-sales
support, exemplifies their dedication to client success. With a vast inventory ensuring rapid
response times, J. J. Jenkins, Inc. is synonymous with reliability and efficiency.

About OMGM sas
Since 1965, OMGM sas is a distinguished Italian leader and has been at the forefront of the plastic
processing industry, pioneering in Monofilament Extrusion, straps, ropes and various other niche
applications. Their commitment to excellence is evident in their advanced technologies and
versatile extrusion lines, handling a variety of materials for diverse industries.

As we look ahead, it’s clear that OMGM Extrusiontechnik Srl will continue to lead and transform
the industry with their precision, innovation, and bespoke solutions. They are more than a
company; they are a trusted partner in progress.

Concrete

Adani acquires Orient Cement at INR 8,100 crore equity value

Published

3 weeks ago

October 22, 2024

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Acquisition adds 16.6 MTPA capacity (8.5 MTPA operational, 8.1 MTPA Ready to Execute).

Accelerates Ambuja’s journey to achieve 100+ MTPA operational capacity in FY 25

Provides 6 MTPA potential additional capacity in North India, leveraging OCL’s high quality limestone reserves in Rajasthan

EDITOR’S SYNOPSIS

Ambuja enters into a binding agreement to acquire 46.8% stake in Orient Cement Ltd (OCL). The acquisition helps to move towards target capacity of 140 MTPA by 2028.
OCL has an existing 5.6 MTPA clinker and 8.5 MTPA cement operational capacity, 95 MW CPP, 10 MW WHRS, 33 MW Renewable Energy spread across the states of Telangana, Karnataka and Maharashtra. It improves Adani Group’s market share pan-India by 2% in the cement industry.
OCL has secured a concession from Madhya Pradesh Power Generating Company Ltd (“MPPGCL”) to set up 2.0 MTPA Cement GU within the premises of Satpura Thermal Power Station in Sarni, MP.
OCL also has a large high quality limestone mining lease in Chittorgarh, Rajasthan, providing the potential to set up additional 6 MTPA capacity in North India.
The acquisition of OCL complements Ambuja’s existing cement footprint, reducing overall lead distances and logistics costs for the cement business and improving market share in our core markets.
Acquisition will be funded through internal accruals, Ambuja remains debt free.

Ahmedabad, 22 October 2024: Ambuja Cements, the cement and building material company of Adani Cement and part of the diversified Adani Group, today announced the signing of a binding agreement for the acquisition of Orient Cement Ltd (OCL) at an equity value of Rs. 8,100 crore. Ambuja will acquire 46.8% shares of OCL from its current promoters and certain public shareholders. The acquisition will be fully funded through internal accruals.

“This timed acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by ~30 MTPA within two years of Ambuja’s acquisition,” said Mr Karan Adani, Director of Ambuja Cements. “By acquiring OCL, Ambuja is poised to reach 100 MTPA cement capacity in FY 25. The acquisition will help to expand Adani Cement’s presence in core markets and improve its pan-India market share by 2%. OCL’s assets are highly efficient, equipped with railway sidings and well supported by captive power plants, renewable energy, WHRS and AFR facilities. OCL’s strategic locations, high-quality limestone reserves and requisite statutory approvals present an opportunity to increase cement capacity in the near term to 16.6 MTPA.”

Mr CK Birla, Chairman of Orient Cement and the CK Birla Group, said, “The CK Birla Group is continuously reallocating capital to sharpen its focus on consumer centric, technology driven and service-based businesses. I take pride in Orient Cement’s impressive track record of building premium brands and maintaining a leading market share in the geographies it operates in. We are confident that the Adani Group, with its strong focus on cement and infrastructure, is the ideal new owner to drive continued growth at Orient Cement for our people and stakeholders”.

Ms Amita Birla, Co-Chairman, CK Birla Group, added, “Orient Cement has a strong market presence, with sustainability initiatives, particularly in renewable energy, being a significant part of its DNA. I am convinced that Ambuja Cements is the right home for all our colleagues at Orient Cement, as well as our customers.”

OCL has 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity along with statutory clearance to increase the clinker capacity by another 6.0 MTPA and cement capacity by another 8.1 MTPA. In addition, OCL also has a limestone mining lease in Chittorgarh for setting up an Integrated Unit (IU) with clinker of 4 MTPA and a split Grinding Unit (GU) of 6 MTPA in North India. OCL has also secured a concession from MPPGCL, Madhya Pradesh for setting up a Grinding Unit within the premises of Satpura Thermal Power Plant. Both these complement the Adani Group’s existing cement footprint. (Refer Annexure – 1 for OCL’s location wise cement capacity and other assets and Annexure – 2 for Adani Cement’s footprint post-acquisition of OCL.)

OCL has recently commissioned a WHRS in Chittapur IU and is in the final stage of commissioning 16 MW solar in Chittapur and 3.7 MW solar in Jalgaon. OCL’s efficient plants, highly motivated teams, strong balance sheet and well-distributed dealer network will be excellent additions to the Adani Group’s existing cement business. OCL’s existing dealers will move to Adani Cement’s market network, creating formidable synergies.

Ambuja plans to optimize OCL’s overall capacity utilization to enhance its cost and competitiveness and improve its operating performance while leveraging the synergies inherent in the existing cement business.

About Ambuja Cements Ltd (ACL)

Ambuja Cements Ltd is one of India’s leading cement companies and a member of the diversified Adani Group – the largest and fastest growing portfolio of diversified sustainable businesses. Ambuja, with its subsidiaries ACC Ltd, Penna Cement Industries Ltd and Sanghi Industries Ltd, has taken the Adani Group’s cement capacity to 88.9 MTPA, with 20 integrated cement manufacturing plants, 20 cement grinding units and 12 bulk terminals across the country. Ambuja has been recognized among ‘India’s Most Trusted Cement Brand’ by TRA Research in its Brand Trust Report, 2024 and among ‘Iconic Brands of India’ by The Economic Times. Ambuja has provided hassle-free, home-building solutions with its unique sustainable development projects and environment-friendly practices since it started operations. The company has many firsts to its credit – a captive port with six terminals that facilitates timely, cost-effective and cleaner shipments of bulk cement to its customers. Its innovative products like Ambuja Cement, Ambuja Plus, Ambuja Compocem and Ambuja Kawach are now listed in the GRIHA product catalogue. These products not only fulfil important customer needs but also help in significantly reducing their carbon footprints. Being a frontrunner in sustainable business practices, Ambuja Cements ranks among ‘India’s Top 50 companies contributing to inclusive growth’ by SKOCH and ‘India’s Top 50 Most Sustainable Companies’ Cross-Industry by BW Businessworld.

For further information on this release, please contact: roy.paul@adani.com

Annexure -1 | Existing Cement Assets of Orient Cement Limited

Plant	Clinker (MTPA)	Cement (MTPA)	CPP/WHRS/Solar	Railway Siding
Devapur IU, Telangana	3.5	3.5	CPP – 50 MW	Yes
Chittapur IU, Karnataka	2.1	3.0	CPP – 45 MW WHRS – 10 MW Solar – 16 MW*	Yes
Jalgaon GU, Maharashtra	–	2.0	Solar – 13.5 MW+ 3.7 MW*	Yes
Operational Capacity	5.6	8.5

* capacity is in commissioning stage

Annexure – 2 | Footprint of Adani Group – Cement business post OCL Acquisition

Economy & Market

Fornnax Announces a Major Launch With Sr Max Series: Sr-max2500 Primary Shredder a Revolutionary and Game-changer

Published

3 weeks ago

October 18, 2024

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Fornnax, a renowned shredding and recycling equipment provider with years of experience in designing and developing SR-Series dual shaft shredders, has unveiled its advanced level SR-MAX2500 shredder specially designed for the Municipal Solid Waste category.

The launch was held IFAT India 2024, a most prestigious event in the waste management industry, on October 16th, 2024, at the Bombay Exhibition Centre in Mumbai.

Fornnax’s successful track record of developing many proven machines for different types of tires, ferrous and non-ferrous metals, which are the most difficult applications has made them a pioneer in the shredding and recycling equipment manufacturing global market over the decade now. The design of the SR-Series machine, a legacy that has prevailed for over a decade, continues to be used in the design of SR-MAX series machines. The advanced SR-MAX2500 shredder features high capacity, modern engineering, and innovative technology.

The remarkable event was inaugurated by Mr Ulhas Parlikar, Ex-Director of Geocycle India; Mr Sanjay Shripatrao Katkar IAS (Municipal Commissioner and Administrator) MBMC; Mr Sharad Nanegaonkar Executive Engineer (Water Supply and Sewerage Department) MBMC; Mr Deepak Khambit (City Engineer) MBMC; Mr Jignesh Kundaria CEO & Director of Fornnax Technology Pvt. Ltd.;

Mr Manoj Kumar Sure, JK Cement Head AFR; Mr Manoj Kumar Modha, Director of Millennium Multi Trade Pvt. Ltd.

Jignesh Kundaria, CEO and Director of Fornnax, shared insights into their newly launched innovation, “With the SR-MAX2500, we’re poised to transform the waste management landscape in India and beyond. Our goal is to line up municipal waste recycling industries with a robust, efficient, and sustainable solution. Our commitment to sustainability and enhancing recycling process is a step forward towards achieving PM’s vision of a Net Zero emissions future by 2050.”

Revolutionizing Waste Reduction: The SR-MAX2500 Advantage We’re excited to introduce the Fornnax SR-MAX2500, a revolutionary primary shredder designed for efficient volume reduction of diverse materials. This high-capacity machine boasts advanced modern engineering and technology, featuring hydraulic motors driving each shaft for optimal power and torque. Its unique cutter design, replaceable cutting table, and shaft design make it an ideal solution for various applications.

Waste Management Reimagined! SR-MAX2500 Primary Applications Our primary focus for the SR-MAX2500 is serving large-scale municipal waste recyclers, cement plants, waste-to-energy plants, mechanical biological treatment facilities, materials recovery centres, construction and demolition recyclers, aluminium recyclers, and other applications requiring highcapacity machines and robust technology.

The SR-MAX2500’s Impressive ROI Streak The SR-MAX2500 offers several commercial benefits, including increased efficiency, reduced operational costs, and enhanced productivity as it is specially designed for the Indian market. Its robust design and advanced technology ensure minimal downtime, maximizing profitability for our customers. Additionally, our commitment to quality and reliability helps build long-term relationships with clients, fostering loyalty and repeat business.

Innovation Meets Efficiency: Why Choose the SR-MAX2500? Fornnax has carved out a distinctive niche in the highly competitive market and its relevance stems from a unique, tailored approach that addresses specific needs. Thus, the SR-MAX2500 shredder differentiates itself through its versatility, catering to a diverse array of waste management and user needs, specifically designed for Indian waste, which is highly contaminated compared to global waste. Additionally, our unwavering focus on innovation, quality, and customer-centricity sets us apart from competitors and establishes our position in the market.

Turning Trash into Treasure with MSW Waste As you see due to the rapid urbanization and over population, India is among the world’s top 10 countries generating municipal solid waste (MSW) and generates around 62 million tons of waste in a year. Therefore, it is extremely critical to prioritize recycling and conversion of MSW into RDF fuel. Cement industry, which uses a significant amount of coal. Cement industries substituting coal with RDF or alternate fuel to reduce the greenhouse gas emissions, conserve natural resources like coal and more and ultimately minimise the waste disposal issues.

Fornnax’s Exceptional Contribution to India’s Sustainability Goals India has made significant strides in waste management and recycling, and with continued investment, innovation, and policy support, there’s no doubt it can achieve its goals. Fornnax is committed to contributing to India’s sustainability and waste management journey through their advanced recycling solutions, supporting the country’s transition to a more circular and environmentally conscious economy.

Fornnax’s Unwavering Commitment to R&D and Innovative Solutions Fornnax stays updated with global advancements in recycling technology and sustainability practices through several key strategies, such as we invest heavily in research and development to ensure our equipment are at the forefront of technological innovation. Our team closely monitors industry trends, emerging technologies, and regulatory changes to identify potential opportunities for improvement. We also actively seek feedbacks from our valued clients to understand their evolving needs and challenges. This input helps us identify areas where we can boost our meet market demands.

Expanding Horizons: Fornnax’s Growth Plans for the Year Ahead The SR-MAX2500 launch is a strategic step towards expanding our market presence and strengthening our position as a leading shredder manufacturer around the globe.

Also, we are optimistic about the coming year, driven by the growing demand for sustainable waste management solutions and the increasing awareness of environmental issues. We are actively investing in equipment enhancement, engineering, and strengthening our partnerships to meet the evolving needs of our customers. Fornnax’s focus areas for the next year include expanding the manufacturing capacity to meet the rising demand and we already started working on it by acquiring 23-acre land parcel in Ahmedabad, Gujarat. The new site is expected to become operational by March 2025. Its focus will be on producing high-capacity machinery applicable in tyre, cable recycling, ewaste, metal processing and more.

About Fornnax FORNNAX is one of the world’s leading shredding and recycling equipment manufacturers, offering Primary shredders, Secondary shredders and Granulators for tyres, municipal solid waste, cables, e-waste, aluminium and many other industrial applications. Quick after-sales services that increase our customer’s uptime and productivity.

We are committed to shaping the landscape for sustainable recycling solutions in the future. Because we’re not just selling equipment, we’re building business. That’s what we believe. That’s who we are. Fornnax Equipment is built with the idea that the simple, most significant and heaviest is better. Our equipment is an evolution of advanced products designed for the challenges of the recycling world.

The global sales partner network makes us successful worldwide. Our corporate culture is based on our history of providing value to our customers’ success worldwide. This motivates our employees to work together, develop innovative products, and produce high-quality equipment.