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Lafarge's annual report summed up the European malaise this week: too much debt; too little growth.

The world's biggest cement company posted a Euro3m loss for the fourth quarter of 2011 compared to a Euro62m profit for the same quarter in 2010. Overall for the full year in 2011 its income fell by 28%. Yet all of this occurred in the same year that the group sold the bulk of its gypsum assets for over a quarter of a billion Euros! All of which went into the group's debt reduction of Euro2bn.

Compare this to 2010 when Lafarge recorded a 12% increase in net profit for the year and the group was expecting an increase in cement demand of 6%. Chief Executive Bruno Lafont's words were, "The steps we have taken in 2010, ranging from structural cost savings to strategic investments in growing markets such as Brazil will provide the foundation for further improvement and growth as we enter 2011."

6% growth did happen in 2011 but only in the emerging markets in the Middle East and Africa, Central and Eastern Europe, Latin America and Asia. Overall sales growth remained at 3%, dragged down by sales decreases in North America and western Europe. Understandably Lafarge's outlook for 2012 remains muted.

All this gloom was compounded by the UK Competition Commission raising its concerns about the joint-venture between Anglo-American and Lafarge. With Lafarge expecting 'higher pricing' for 2012 any move with even a whiff of anti-competitive behaviour will draw in the watchdogs. With western European sales down by 2% in 2011 the challenge remains for the group, and for all cement producers, to somehow find profit once more in the mature markets.

US: Doug Black, currently chief executive of CRH's Americas Materials Division, has been appointed to the newly created position of president and chief operating officer of Oldcastle Inc, the holding company for CRH's operations in the Americas. Black will report to Mark Towe, chief executive officer of Oldcastle. Aged 47, Black joined Oldcastle in 1995 and has held a series of key leadership positions at Oldcastle and in the Precast, Architectural Products (APG) and Materials operations.

CRH, the international building materials group, has announced a number of changes within its management team in the United States, effective from 20 February 2012. Commenting on these changes, Myles Lee, CRH chief executive said, "These appointments and subsequent follow-on changes strengthen our organisational structure and enhance our ability to execute our strategies and achieve long-term performance and growth."

Pakistan: Many Pakistani cement manufacturers have posted robust earnings during the first half of the 2012 financial year, which ended on 31 December 2011. Across the six major producers, representing 68% of the market, the overall profitability of the sector grew by a factor of 2.2 over the same period of 2010. Overall net sales of the sector grew by 32% to US$418m.

Separately most Pakistani cement producers posted profits for the six month period. DG Khan and Lucky Cement, which between them contribute around 25-28% of total cement sales, posted robust earnings per share growth. On the other hand, Fauji and Thatta Cement, despite better overall margins, posted losses. Fauji Cement posted losses due to lower utilisation of its new 2.1Mt/yr plant due to power outages and lower demand, while Thatta cement remained in the red due to extremely low sales, which were approximately 20% of those expected.

Denmark: The board of Danish cement plant producer FLSmidth has released financial results for the three months to 31 December 2011, which show that earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 57% to Euro133m compared to Euro89.1m in the final quarter of 2010. The company recorded a revenue of Euro979m, up by 32% year-on-year from Euro742m. Its order intake also increased by 32% to Euro787m for the quarter compared to Euro595m.

For the whole of 2011 the group's revenue increased by 9% to Euro2.95bn and its EBITDA increased by 11% to Euro356m. Its net profit was up by 12% to Euro193m compared to Euro180m in 2010.

FLSmidth said that its cement sector remained solid despite a difficult market. In 2012 the company expects a consolidated revenue of Euro3.2-3.5bn exclusive of acquisitions. In the cement sector it expects a slight increase in revenue over 2011's Euro592m.

Saudi Arabia: Saudi Cement Company has announced that it will re-start operation of its 4000t/day Kiln No. 6 by the start of May 2012 at the latest. It will have completed a large-scale environmental overhaul and conversion of the kiln from gas to crude-oil by this date.

The company will also recommence operation of three older kilns over a similar timescale. These have a combined capacity of 1325t/day. The total additional available capacity available in May 2012 will be 5325t/day, helping to meet rising demand in the country.

India: In a clear move away from its traditional engineering, procurement and construction (EPC) business, Shriram EPC, part of the financial services major Shriram Group, is ready to pick up a majority stake in Sree Jayajothi Cement. The company's board approved picking up a significant equity share capital of Sree Jayajothi by partially converting the dues owned by Sree Jaya Jothi into equity.

Shriram EPC, which provided EPC services to the latter's cement plant at Yanakandala village in Andhra Pradesh, has invested its own money for the project. Shriram EPC hopes to complete the deal by mid-April 2012, according to its managing director and CEO, T Shivaraman.

"For us it is a strategic move," explained Shivaraman. "For the group it is a diversification to get into the cement business. This move will have long term benefits for us. Since Sree Jayajothi could not return the money that we invested over the years, we thought it fit to convert the dues into equity. We are converting part of the dues into equity and it will be for majority stake."

Sree Jayajothi has been struggling to find a suitable investment partner for its cement business, with repayment so far taking longer than expected. Over recent years Shriram EPC has invested over US$100m in the plant.

Saudi Arabia: The Ministry of Commerce and the department of customs has tightened its surveillance on Saudi cement outlets to ensure a strict implementation of the ban on exporting cement, which came into effect on 18 February 2012.Industry sources said that no cement or clinker bricks had been exported since the ban was imposed. Only Bahrain is exempt from the ban, receiving about 25,000 bags of cement per week.

Some cement companies took advantage of a grace period that preceded the start of the ban to export large quantities of cement. Keen not to confuse or disturb the companies, the ministry warned producers beforehand, enabling factories to coordinate with distributors. A meeting was held in January 2012 warning that such a move was becoming likely.

Following the ban on exports Al Jouf cement announced an immediate 30% price increase. The company justified its move by saying that it was done to reduce the losses it might incur as a result of the ban.

The ministry said that it had stopped exports in order to put an end to the cement crisis, which has seen cement become very scarce in certain regions of the country. It asked factories to produce at full capacity to provide enough cement for local consumers. A cement shortage in Makkah is expected to end with the ban on exports and an extra 10,000t/day, produced for the Makkah region.

Earlier, more than 70 people were arrested and are to be investigated in connection with a cement crisis in Jeddah, which had seen cement become expensive and scarce since the start of 2012. Trucks owned by the accused were captured while selling cement at inflated black market prices in various parts of the city.

UK: The UK Competition Commission has decided provisionally that the proposed joint venture between Anglo American plc and Lafarge SA in the UK could damage competition in certain markets for construction materials.

In February 2011 Anglo American, through its UK subsidiary Tarmac Ltd, and Lafarge announced a proposal to establish a 50:50 joint venture, to which each of them would contribute the bulk of their construction materials businesses in the UK. The two parties' main overlapping activities in relation to the joint venture are in the production and supply of cement, aggregates, asphalt and ready-mixed concrete. The Office of Fair Trading referred the case to the Competition Commission on 2 September 2011.

Now the Competition Commission has reported that the joint venture could lead to a substantial lessening of competition in the markets for the supply of bulk cement, rail ballast, high-purity limestone (when used for flue-gas desulphurisation), primary aggregates for construction applications in 23 local markets, asphalt in two local markets and ready-mixed concrete in seven local markets.

"We have a number of concerns about this joint venture," said Roger Witcomb, chairman of the Anglo/Lafarge Inquiry Group. "In bulk cement there are currently only four UK producers and there is evidence that the market is not as competitive as it could be. Prices and profit margins haven't been affected in the way we would have expected following the big falls in the demand for cement in the past few years."

Although the Commission has not reached a view on whether or not there has been coordination in the bulk cement market, Witcomb said there were concerns that the proposed tie-up would increase the susceptibility of this market to co-ordination. "Some of the reasons for this arise from the proposed combination of the cement businesses and some from the increased vertical integration that would result from the combination of their ready-mixed concrete businesses," he said. "Lafarge currently have a relatively small ready-mixed concrete business, while Tarmac have a relatively large one."

Witcomb continued, "We are now consulting on the possible actions we could take in response to the reductions in competition we have found, bearing in mind the close links that exist between the different product markets."

As well as the summary of provisional findings, the Competition Commission has published a notice of possible remedies, outlining ways that the potential anti-competitive effects of the joint venture could be prevented. It will issue a final report no later than 1 May 2012.

Vietnam: Vietnam's Ministry of Construction has announced that it will temporarily delay work on several approved cement projects in the country. The move was announced with the spectre of severe cement overcapacity looming over the country. In 2012 it is expected that the country will consume around 50Mt of cement, 10Mt short of its existing 60Mt/yr capacity, according to the Vietnam Cement Association (VCA).

The director of the ministry's Construction Materials Department, Le Van Toi, noted that many cement producers were facing losses due to decreasing consumption and high interest rates. "Many cement producers have had to borrow up to 80% of their total investment capital and that eats most of their profits while interest rates remain high," he said.

Toi said that the Thanh Liem Cement Plant in northern Ha Nam Province had to close its doors due to significant losses, although the plant has not yet declared bankruptcy. Many other plants have cut their capacity sharply. "If the situation continues, the number of cement plants that will have to shut down will surge in the near future," Toi warned.

VCA's chairman Nguyen Van Thien urged cement producers to boost their trade promotion and export heavily in 2012 to deal with the surplus. He expected that the producers could export more than 7Mt of cement in 2012, a massive increase over 2011, when the country exported 1.5Mt. Vietnamese cement is exported mainly to China, Indonesia and Bangladesh, as well as several African and southeast Asian countries.

France: Lafarge has posted a net loss in the fourth quarter of 2011 due to higher prices of its raw materials and energy, negative currency swings and a write-off of Euro285m on assets, mainly in Greece.

Lafarge posted a Euro3m net loss for the quarter ending 31 December 2011 compared with a net profit of Euro62m for the same period in 2010. Sales rose 5% in the same period to Euro3.81bn from Euro3.63bn a year earlier.

Overall for the full year in 2011 Lafarge posted a net income of Euro593m, a drop of 28% compared to Euro827m in 2010. The income drop occurs in the same year when Lafarge sold its gypsum assets, generating a net gain of Euro266m. Sales rose 3% for the year to Euro15.3bn from Euro14.8bn in 2010. The company achieved its target to reduce net debt by Euro2bn, taking the figure down from Euro14bn in 2010 to Euro12bn in 2011.

Cement sales were driven by emerging markets in the Middle East and Africa, Central and Eastern Europe, Latin America and Asia. In these regions sales increased by 6% to Euro7.69bn in 2011 from Euro7.16bn in 2010. This represents more than two-third of cement sales for the company.

Yearly sales in Asia grew by 3% to Euro2.1bn in 2011, despite the depreciation of most of the Asian currencies against the Euro. Notably in the fourth quarter sales increased by 15% in Central and Eastern Europe, rising to Euro220m in 2011 from Euro192m in the same period in 2010. This was attributed to improved market situations in Russia and Poland and overall mild winter weather conditions.

Mature markets experienced contrasted trends, with volume growth in Canada, UK and France, stable volumes in the United States, and Greece and Spain still impacted by the difficult economic environment.

Lafarge expects that costs of raw materials will rise at a slower pace in 2012 than in 2011 and sees demand for cement rising between 1% and 4%. It also expects it will be able to raise its prices as demand for cement increases, mainly in emerging markets. Lafarge expects to further reduce its debt thanks to cost-cutting plans and further divestments of more than Euro1bn in 2012.