National and Economic Resilience

Corporate Responsibility Report 2015> Environmental Resilience

CEMENT AS A STRATEGIC PRODUCT – FOUNDATION FOR NATIONAL RESILIENCE

Nesher's contribution to Israel's resilience has been evident since it was founded. As the sole cement producer in the country, the company has played an important role in building the country, immigrant absorption, Jewish labor and realizing the Zionist dream.

The ability to build and develop infrastructures depends heavily on the cement industry, as this industry is a strategic one, crucial for the existence of a modern, independent country. Local cement production means less dependence on other countries for the country's infrastructures construction and development, due to the availability, quality, and proximity of raw materials and the reduction of production-to-use time (due to a short shelf life). Consequently, the cement industry in most countries is based on local production, with a low percentage of import.

Moreover, the cement market is characterized by highly irregular demand, derived from the construction industry activity, and cement plants tend to align their production capacity to periods of peak demand. Establishing production capacity in this industry requires massive capital investments and long startup times, therefore alignment is done in large production steps.

industry

Currently, the Company's production capacity is approximately 5 M tons of self-made clinker (the main raw material the production of which requires the major part of the investment in cement plants), and the Company is prepared for supplying peak period demand and above as far as grinding capability (and clinker import) are concerned.

As a basic raw material for the production of concrete, cement also has important implications from the point of view of security and strategy.

Finally, in order to ensure its contribution to the development of proper construction with high quality materials for the citizens of Israel, Nesher is committed to the production and marketing of a high quality, safe product as a strategic goal, and the Company's products are tested in accordance to standards defined by the Israel Standard no. 1 and the European Norm.

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Foundation for the resilience of the Israeli economy

Since its inception, Nesher has taken it upon itself to promote Israeli industry.
A strong, stable local industry has crucial implications for increasing Israel’s economic resilience. Local industry creates jobs and lower unemployment rates, boosts exports and Gross National Product (GNP) and, finally, encourages economic growth and thus contributes to Israel's economic stability.Nesher makes huge investments in setting up and operating cement plants, and the Company's entire production set-up is located in Israel and most of its production is for local consumption. Consequently, Nesher is in a position to significantly influence the production and consumption of “Made in Israel” products in Israel.Nesher provides jobs for numerous workers in its plants and in associated industries will continue doing everything in its power to support the Israeli industry, since robust economy means stability for the state of Israel and the capability to ensure support and security for all its individuals and businesses.

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