We are honored to present the 2017 Corporate Responsibility Report for Nesher Israel Cement Enterprises. This year the public discourse on the cement industry in Israel and its place in the social, economic and political fabric of the country is more important than ever before.
The Refuse-Derived Fuel (RDF) plant inaugurated and activated in 2017 allows Nesher to replace fossil fuels used to power cement kilns with an alternative fuel derived from sorted industrial and household waste. Without this enterprise waste would be sent for burial in landfills, the purpose of which is simply to pass the problem on to future generations. Nesher's massive involvement in the recycling economy, which regards waste as raw material for other industrial processes, is the most outstanding example in Israel of this innovative concept. Implementing the project presented the company with long-term challenges with regard to planning and legislation issues. Nevertheless Nesher and its project partners – the Dan Cities Association and Veridis Ltd, – inaugurated the new plant at the Hiriya Transfer Station in March 2017. The plant is one of the largest facilities of its kind in the world and we forecast that it will enable Nesher to increase the mix of local waste-based fuels by 40% in the coming year, thereby doubling the use rate of alternative fuel. This is a significant environmental achievement on a national scale. The RDF project proves that heavy industry can in the long term be part of the solution for environmental pollution resulting from Israel's consumerist affluent society. This important enterprise narrows the gap between Israel and Western European countries, and in fact creates a win-win-win situation on an economic, environmental and political level.
The impressive achievement of the move to alternative fuel is overshadowed by several decisions and processes that in fact jeopardize the future of the cement industry in Israel. The first threat is the import of cement at dumping prices while neglecting to adjust the environmental control to the requirements applied to locally produced cement. This obviously leads to a negative incentive with regard to environmental excellence and unfair competition for Nesher, with only short-term benefits for the Israeli economy. The current notion that enough cement can be imported at the current dumping prices at any time to fulfil Israel's requirements is a delusion that endangers the country's security and development. The oil embargo imposed on Israel in the 1970s is a good example of Israel's vulnerability resulting from dependence on strategic resources from abroad. In addition, the Ministry of Environmental Protection chose not to permit Nesher to import fly ash which was in short supply. Fly ash allows for the production of cement with a lower carbon footprint and supplies the Israeli construction industry with raw materials for greener and better quality buildings. The current policy that prohibits the import of fly ash, in contradiction to accepted international practices, also constitutes discrimination against the local industry, as there is no limitation on the import of cement that contains fly ash.
What we need is a forward looking policy for the long term that will enable the Israeli cement industry to solidify the construction industry's strength and resilience. This requires an in-depth understanding and cooperation from all stakeholders, including policymakers whose task is, inter alia, to manage the long term policy. I am hopeful that we will all strive towards a strong Israel, and as Israel's largest and oldest cement producer, Nesher plays an important role in this mission.
We would be happy to hear from you and to continue developing collaboration between us, based on our shared destiny and for the sake of Israel's social and economic future.