CEO

I am honored to present Nesher's Corporate Responsibility Report for 2018 to the Company's stakeholders. This year the importance of public discourse regarding the future of the cement industry in Israel and this industry’s role in the country's social, economic and political fabric is greater than ever before.
Cement is a strategic product and therefore countries around the world are meticulous about maintaining their ability to produce it locally and independently. This is due first and foremost to its importance for the construction and infrastructure industries that are totally dependent on the regular and reliable supply of quality cement. Moreover, in the past decade the status of the cement industry worldwide has been established as a critical component in the recycling industry. We have witnessed an annual increase in the amount of domestic and industrial waste treated in cement factories is increasing annually, as part of the latest global trends whereby advanced waste treatment replaces landfills, and a more efficient use of natural resources. The global cement industry thus fulfils a double function – its product constitutes strategic raw material for the construction industry, and its production facilities constitute an anchor for the recycling industry.
2018 will be remembered as the year in which Nesher established its status as Israel's largest recycling company, and in which it received approximately 1 million tons of alternative raw materials and fuels. The use of these alternative materials reduces the need for natural resources and promotes Israel's position in all matters related to waste treatment. The pinnacle of this process is the use of some 10% of waste produced in the Tel Aviv metropolitan area (Gush Dan) as an alternative fuel in the cement production process, and the amount is increasing annually. In addition to the technological achievement that places Nesher in the forefront together with similar enterprises in Europe, it is also the most significant solution in Israel for preventing waste burial in landfills. This project is in addition to a range of projects previously initiated by Nesher for the use of various waste types, such as solvents, used tires, flyash and plaster from power stations as alternative raw materials and fuels, as well as the use of soils that require clearing and treatment, etc. The inclusion of these wastes in Nesher's production processes constitutes the practical application of the principles of circular economy as an alternative to the linear production model that is based entirely on the continued use of natural raw materials without providing solutions for the waste produced – resulting in the continued exploitation of limited natural resources.
However, while Nesher's strategy continues to focus on the Company’s contribution to Israel's economic growth through its production activities, several decisions taken by the government in the past year in fact jeopardize the Israeli cement industry's future. First and foremost is the decision to allow the import of cement at dumping prices, thus forcing Nesher to face unfair competition with questionable short-term advantages to the Israeli market and to Israel’s national resilience. The notion that enough cement can be imported at any time at the current dumping prices to meet Israel's requirements is a delusion that endangers the country's security and development. In the 1990s Israel deliberated whether to import water from Turkey due to the drought and a water shortage. Instead, a decision was made to establish water desalination plants – a fortunate move without which we would today be reliant on Turkey to provide us with potable water. This disturbing idea should be in the forefront of the minds of the decision makers with regard to a strategic product such as cement.
Turning heavy industry such as Nesher's cement production into a part of the long term solution for 21st century environmental challenges – while continuing to contribute to the Israel’s competitive capabilities, its national resilience, and both the economy and the environment – is not a simple mission that is achieved overnight. Now is the time for a supportive government policy that will enable Israel's cement industry to establish the robustness of the construction sector based on local raw materials and energy sources. This requires developing a common vision and understanding with all our stakeholders, including planning committees, public organizations, and national policy shapers, whose task is, inter alia, to manage the long-term policy in addition to supervising Nesher and other companies in the sector. I am hopeful that we will all recognize this and strive towards maintaining Israel’s national resilience. As Israel's largest and oldest cement producer, Nesher is committed to fulfilling this important mission arising from its historical position.
We would be happy to hear from you and to continue to develop collaboration between us, based on our shared destiny and for the sake of Israel's social and economic future.

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