A very good morning, everybody. Welcome you all to Indorama Ventures Capital Markets Day. I'm Vikash Jalan. I'm Vice President, Investor Relations and Planning for the group. Joining us today, Mr. Alok Lohia, our Group CEO, and Mr. D.K. Agarwal, our Deputy CEO. Alastair Port, Executive President for IOD segment. He's joining us from the U.S. and he's online. Chris Kenneally, Executive President for Fibers business. A quick disclaimer that this meeting is being recorded, and a replay of this will be available on our website after the event. We'll open up the Q&A once the prepared presentation is done. You can ask questions here. Also we have some guests joining online, some investors, and they can post their questions on the chat box, and then I'll pick it up, and I'll ask that question.
With that, I request Mr. Lohia to start the presentation. Thank you.
Thank you, Vikash. Good morning and welcome to our 2023 Capital Markets Day. To say the least, 2022 was a year of upheaval. A rare year where IVL saw our operating environment become more complex and challenging as disruptions layered on top of more disruptions. Geopolitical tensions in Europe caused disrupted supply chains and significant cost increases. Persistent lockdowns in China that not only made it difficult for consumption, but finally it is easing in the first quarter of 2023. The China lockdowns brought down benchmark prices and spreads for petrochemical products. The reality that we are moving into a higher interest rate and higher inflation environment fully hits home.
Despite these, the products IVL makes, the materials that go into the packaging for food and drinks, the fabric that goes into clothes, tires, airbags and baby diapers, and the chemicals in shampoos, toothpastes, agriculture, continues to be in high and growing demand. IVL itself had a record year with record financial performance. We also emerged from 2022, with itself comes to an end of a three-year-long perfect storm that started with COVID in 2020, a stronger company than ever before. This is because of our agility, confidence and strategic management and a value-accretive mindset. These characteristics ensure that IVL moves into the next period of growth strong and ready to capture opportunities from an increasingly volatile environment. In order to continue successfully operating in a volatile environment, we are focused on value protection and value creation.
We will protect our businesses through strategic defensive actions while also leaning into this volatility to create value. We are focused on two driving forces: enhancing our competitiveness and disciplined and sustainable growth. These priorities can only be accomplished by developing and empowering the next generation of leaders at IVL. Indeed, while we are proud of the platform we have built, our people are the bedrock of IVL. We are highly focused on talent and leadership development to ensure that we have the right people embedded in the right skills and in the right location. The founder's mentality that made us successful is woven into the culture of IVL. We are empowering our people to take ownership and accountability, be agile and use tools to build better foresights, apply innovative thinking and a can-do attitude to all the challenges and opportunities that they face.
Empowering our people and developing our leadership strength is a key to achieving our business outcomes. We are and will always be a growth company. We are embedding this mindset into the next generation of IVL leaders. Our future growth is driven by an entrepreneurial mindset that prioritizes ownership and accountability, decisiveness, competitiveness, efficiency and customer centricity. We are developing our leaders to have ownership and accountability. The success of IVL is theirs as well. We want to encourage them to be decisive, to make thorough decisions, but to not to be frozen in fear of failure. They should always be competitive, not just with others in the marketplace, but with themselves. Always thinking about ways to improve on the past. Efficiency has always been woven into the fabric of IVL, whether in capital allocation, procurement, time management. We are always looking for the optimal way to achieve our goals.
Our leaders should reflect that. Like any other company that is run by a true entrepreneur, the customers must always come first. Like I said, IVL will always be a growth company, and we want to build leaders who can deliver strategic and sustainable growth. Leaders that have this mindset build and grow companies that are agile, fast, precise and innovative. They have happy customers and are performing highly in any environment. The right business outcomes will flow naturally from the right leadership. This is how we ensure that we keep winning in the backdrop of an increasingly volatile world. We are also empowering and supporting the IVL business segments to make their own decisions to increase speed and agility.
Each of the three business segments are empowered to develop an executional edge in this age of volatility by fortifying leadership. They will be able to pivot in response to changing conditions. We do this by striking an exact balance between autonomous and independent business segments who are well-supported and protected by the company, by the corporate. At the head office, we provide support in terms of finance, procurement, etc. , to leverage on experience and scale across our businesses. Our enabling functions are the foundation to our streamlined management and well-aligned strategy. They're responsible for cross-functional interdependencies and maximizing corporate synergies. Through our enabling functions, we solve potential pain points before they become problems. The end goal, again, is for all business segments to get things done fast and well, and remain winners in the marketplace.
In a volatile and complex context we are operating in, the only way for IVL to successfully achieve our goals is to enhance our competitiveness and to accelerate our growth sustainably. To be even more competitive, we need to focus on being efficient in the way we use our capital. This means constantly assessing our portfolio to ensure we are operating at maximum efficiency. Remain adaptable and move with the market. This means capturing new innovative businesses as they arise, and we help in innovating. Taking decisive actions on operations where we do not see long-term future. To be more competitive, we need to continue being dedicated to cost management and driving a strong P&L through balance sheet management and efficiency drives like the Project Olympus.
We need to use digital tools across our businesses and processes to enable us to make agile decisions and maximize productivity. Digital tools will give us sharp and granular insights. To win in an unpredictable environment, these will be crucial, and we are better prepared today than ever. I spoke earlier about the capital efficiency and making sure IVL has the right mix in our portfolio. We demonstrated this recently in our decision to discontinue and take an impairment on some uncompetitive assets in Fibers and the CPET businesses. These decisions were made after a deep forensic dive across our portfolios, across our businesses, both by our internal teams and using some external support. This decision shows IVL's relentlessness focus on efficiency. We want our capital to make good returns, and we want our management to focus their time and energy on the right opportunities.
Being agile also means that IVL can quickly and decisively capture opportunities created by the volatile environment to maintain and enlarge our leadership positions. On to cost management. It is in the IVL DNA to be cost- competitive. We are continuing on this path to Project Olympus. Project Olympus is not just about tactical cost savings. In fact, it is more than that. It is a broader push for operational excellence and continuous improvements across the business. We expect this program to have unlocked over $650 million, $670 million during the current business plan. More importantly, through Project Olympus, the business is learning how to be more efficient and effective in everything we do. We are improving our collaboration between our sites and our commercial functions and the cross-learnings across segments.
The way we are enhancing our competitiveness is by digitizing our business. Our commitment to digitization will result in significant value creation in the longer term. We are undergoing a global platform of digitization through SAP S/4HANA. Digitalization will give us the insights edge, improving visibility across the organization and the environment around us, allowing leaders to make the right decisions faster. This is of paramount importance for a company like IVL that has breadth and complexity of operations, and for us to thrive during this period of ambiguity and volatility. Going digital also allows us to reach our full potential. For example, having full visibility on our supply chain, a must in an environment of increasing global tensions. Intimately understanding our customers and end consumers and the changes in the environment rapidly and continually.
Picking up signals from across the organization across the globe in real-time and distilling them quickly into options that the organization can act on. At plant levels, at site levels, going digital gives tremendous benefits to IVL. This process allows us to run smart factories at scale, which leads to better work environment, downtime reduction, and preventive maintenance decisions. We have always said that IVL is a growth company. We have grown exponentially in a relative short period of time and hold indisputable leadership positions in many of our end markets. What we want to highlight today is that there is still enormous potential for growth. We are the number one PET producer with 18% market share, but we only have 2% of the F&B packaging market, which is expected to grow at a compounded annual growth rate of 5%.
Home and personal care is a $28 billion market, expanding at 7% CAGR, where we only have a 3% market share. Agrochemicals, tires, airbags, apparels, hygienes, etc. , are all large and growing end markets where we have a position that we can and will grow. Over the years, IVL has grown from being a pure play PET producer into a diverse, well-integrated, and a downstream company. Constant assessments, reassessments of our diverse portfolio is how we remain on the front foot of moving markets. Our growth has not only been in strength, it is an overall quality of products and services that we provide to our customers in our journey to becoming the single reliable solution.
We have a clear strategy to capitalize on opportunities, and we think of growth in three ways: growing the core of our business, portfolio moves, and increasing our focus on sustainability. This will be disciplined growth. All our key products, all our projects, all our acquisitions or major actions should be guided by this criteria. They should enhance our core EBITDA margin, have a return on capital employed of 7% or 15%, contribute to the quality of the earnings, and allow IVL to maintain balance sheet discipline. Many of you have witnessed IVL's journey from the start and know that growth is a part of our DNA. The lessons we have learned in the past years are invariable. Our management was agile in the face of shocks that came one after another, and we bring this agility into the future.
IVL today is much more mature organization with sophisticated operations enhancing our inbuilt grit and acumen. Lastly, our team of 26,000 employees across 35 countries have themselves demonstrated resilience and agility during the severest of the periods, and my wholehearted gratitude goes to them. Next, please. Finally, we have a competent and a well-versed board of directors. We love the interaction between the board members and management, and the result is that we have to prepare well for our interactions as we get faced with caution and prudence when agreeing to our journey. With that, I will pass on the mic now to Mr. D.K. Agarwal, my Deputy Group CEO and the Executive President to CPET business, as well as our Group CFO. Thank you.
Very good morning. Thank you for being here, and thanks, Mr. Lohia, for giving me so many designations. As Mr. Lohia outlined, IVL has.
Thank you sir.
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Thank you sir, also.
Thank you. IVL has grown significantly since the businesses was founded. It has been a journey of $30 million- $20 billion. We have a growth mindset and a track record of executing targeted and sustainable growth. Over the past 20 years, IVL has acquired more than 60 businesses from different listed companies, partnership companies, private equities. Alongside our organic initiative, this allowed us to continuously strengthen our platform, people, and processes. Through M&A, we have evolved from purely PET company into a real global chemical company, as you, Mr. Lohia, was explaining. What these acquisitions have brought not only expanded our business, but also allowed us to develop customer intimacy by providing global solutions. Today, we can provide global solutions to Coca-Cola, Pepsi or Procter & Gamble around the world. These deals have also allowed us to consolidate the business. We have been a consolidator.
We are the largest PET producer in the world and a leading position in different businesses, established clear market leadership and key segments and geographies. We have also integrated the seasoned and valuable talent and management team of these organizations to strengthen our global team, which is a clear example of the people you're working with us. Most importantly, we have accumulated key technologies, intellectual properties, R&D capabilities to drive the next phase of innovation at IVL. You know, the good example is Oxiteno acquisition. When we acquired the assets, we thought it was 6x pre-synergy. Today, post synergy, Alastair will cover it. It's going to unlock another $100 million and that will have actually EBITDA 4x post-acquisition. That's what the value we create. Integrating acquisitions is not easy.
This is a question frequently asked to me, we are proud of our integration track record. When we acquire businesses, we improve their cost structure by continuous debottlenecking and embedding operational excellence, as you saw in Project Olympus. Today, we have successfully blended into IVL a global team of 26,000 people of 80 different nationalities spread across 35 countries. We have a proven record of double-digit growth over the past decade, with a compound annual growth rate of 11% from 2012- 2022, as you can see in this slide. Today, IVL is now a leading chemical company with a global footprint, we are excited to take the next step of the journey. We are a very proud Thai company hosting the flag in 35 countries. Today we have footprint across the globe and we are still growing.
We have strategically positioned ourselves in critical market as a global business with local production to be the preferred supplier for our customers. We have seen this strategy pay off, especially during the last two years when the supply chain disruption was there, where people are looking at regional sourcing rather than globally sourcing. IVL has significantly benefited from our global footprint. Our scale has created a barrier to entry. Why? Because we are such a large producer, we are integrated and that what benefits. This scale has allowed us to invest in innovation and customer satisfaction. By having an integrated and diverse portfolio across geographies, segments and end markets, we are able to deliver resilient earnings for our shareholders.
You can see on the left-hand side, Americas constitutes 62% of the EBITDA of the company with a very, very consolidated and integrated play, which we have in the shale gas play. Our key business units are interconnected, allowing them to maximize synergies and leverage economies of scale across raw materials, customer networks, and research and development initiatives. These businesses are connected. We are focused on attractive and growing end markets, as Mr. Lohia was explaining, and are leaders across the sectors in which we operate. Let's go to the next slide. You like to know how these businesses are connected. We also have an integrated value chain across our global footprint. Our 3 businesses are interconnected through shared raw materials, shared customers and shared R&D. To give an example, Procter & Gamble buys from all our 3 businesses.
Henkel, Unilever buys from two of our businesses, so they are all connected. Having shared raw material helps to insulate the business against supply chain disruption and other external factors. We can switch raw materials from one business to another business. It also gives us a cost advantage. By having shared raw material across business units, we can leverage our scale and reduce procurement costs, allowing us to capture more margin along the chain, so we can leverage more our raw material procurement. We also, as I mentioned, have shared customers, which allows us to maximize the value generated per customer. And we a holistic solution provider in helping these customers to source what they need to continue providing us all the staples of our everyday life.
This is how you see all the three businesses are connected and we are very much vertically integrated, capturing the more value chain margin. Next slide, please. It is very important to understand in the businesses in which IVL operates. You saw just Mr. Lohia presented that what is the growth potential of all these businesses because we sell the consumer staple. Across all our businesses and end markets, we hold leadership position as the largest or second largest producer. We want to be the leader in each business where we operate or the second largest. You can see we are the largest producer of PET in the world. We are the largest PAO producer in the Western market. We are actually the largest recycler in the world.
Today, we are the largest non-ionic surfactant producer after the acquisition of Oxiteno and also the largest ethylene oxide producer. This gives you a lot of strength. We also have in fibers a leading position of Tyvek, Avora, CiCLO and hygiene fiber. What Mr. Lohia just alluded that we have reset our portfolio a little bit. We look holistic view of our assets we impaired. Moving to the lower cost production and leverage on these technologies and the customer intimacy which we have. We are catering to the end markets which have substantial growth opportunities supported by mega trend of growing population, increasing quality of living and urbanization. Don't underestimate the growth. You can see food and beverage packaging is about $500 billion business and still growing 5%. All of this translates into growth multiple of GDP, giving us immense future opportunities.
To give an example, in 1995 when we started, PET used to be 8,000 tons business in Thailand. Today, it's 450,000. Can you imagine? That's the growth potentials of this business. All this translates into a multiple growth of GDP, means an immense growth opportunities for IVL to further grow the businesses. Next, please. It is very important to understand because we need to differentiate ourselves from durables and consumer necessities. I mean, we get clubbed with the durable companies. The geographical spread, integration, diversification, and growing end market all equates to resilient earning performance throughout the cycles, as evidenced by this slide. Our segment and commodity diversification shields us from aggressive cyclability in any single commodity. We are not exposed to a refinery. We are not exposed to a polyethylene, polypropylene only.
We have a number of earning streams. Through our evolving portfolio, today, actually, we have created 15 streams of revenue from various end markets and geographies, protecting us from volatility, and that acts as a perfect hedge. 73% of resilient revenue comes from essential goods. It's good to understand what is EBITDA per ton, and this slide we have shown you earlier. Our EBITDA per ton, excluding 2020 was a pandemic year when the crude oil dropped significantly, is actually $140 per ton, and we plan to grow this up to $150-$155. You saw in 2022, it was $158 per ton, with further improving the better quality of earning, as 2020 was a strong year.
We are constantly evolving as a company, and recently, we have shifted more on the downstream mix across end markets so that we can capture more value. This downstream mix has further protected the business and provided us the resilient earning through the cycles, allowing us to capture the higher margin. It's very important to differentiate between a diversified company with several revenue streams to a single product exposure or multi like olefin chain or the refinery. Let's go to the next slide. Our sustainability is licensed to operate. That's what I say. We have a commitment to sustainability and created measurable and ambiguous goal to reinforce this. Ambitious goals. Our short, mid, and long-term sustainability goals are in the place to ensure value creation and value protection. There are two important words: value creation and also protecting the value.
Value protection against potential policy changes, changing sentiments towards sustainability, and a growing environment that accounts for corporate responsibilities. We have mitigated these risks and have established a very planned ESG framework, which is detailed in our Vision 2030, which was presented in the Capital Market Day last year. Value creation through the new avenues of growth and revenue that will open up through sustainability, for example, through advanced recycling. Alastair will cover, we are looking at ethylene carbonate, which goes into the electric car batteries, which are EO plus CO2, which is sustainability creating a value. Even CO2 for food uses for CSD. We always look at solution that which creates, enhances the value, and provides solutions to our customer. Let me run through some examples of sustainability program in the next couple of slides. Next.
Our CPET business has an important role to play in creating a more sustainable world. PET today is 55% collected in the world recycled. Recycle is critical in enhancing our leadership position in CPET. As I mentioned, collection rate is 55%, which is going to further increase as regulations and infrastructures get built. IVL is dedicated to closing the loop by recycling PET and reducing waste. We are aware of this environment impact of our products, we are committed to being part of the solution by growing the scale of recycling operation. As you know, we have committed 750,000 to Ellen MacArthur Foundation, we are on track, actually. We are partnering with our customers and retailers to meet their sustainability targets and our own by building the infrastructure that we need to have more circular economy. Thank you.
Here is a example how we are progressing on our midterm sustainability goals. We'll support innovation and advanced sustainability technologies to better future-proof our business. As part of our efforts to be a leader in sustainability, we have established IVI Edge, Indorama Ventures Investment Holding, a startup incubator, you can call it, which will drive and accelerate our efforts around sustainability, innovation, and emerging technologies. A lot of work has to be done on this. IVI Edge invest in the startup businesses that drive advancements in recycling, bio-based chemicals and polymers, renewable feedstock, and biodegradable polymer. For example, just to give example, Polymateria is to develop biodegradable hygiene products such as wet wipes and face masks. I mean, if you can create a solution of biodegradability, this is going to be very soon commercialized by one of the brand owners.
Biosurfactant biodegradables. We have already identified 30 projects with the potential to deliver new technologies and innovations to help us reimagine chemistry to create a better world. This was, as I said, licensed to operate. We are working very hard on these midterm initiatives. People talk about sustainability. Do we have a real roadmap? We have a robust and defined sustainability strategy with clear priorities, ambitious and measurable targets, and a roadmap for delivery. When we first set out this journey, we were clear that our goals were very ambitious. We remain actively focused on achieving these targets. We are satisfied with our progress on recycling, as you can see, where we have made headway in the overall increase in our recycling capacity. We are looking to partner with renewable energy providers to increase our renewable percentage.
We are close to signing a partnership with a European energy provider that will bring us closer to our 2025 goals. Our energy intensity was not a good level, 2.1% actually more than 2020 baseline, this is a transitional number. The higher intensity was largely due to lower operating rates in our European assets. Through the asset configuration in Europe, as you saw, we'll also see an improvement in energy efficiency. GHG intensity reduction, we are on track to meet our target of 10% reduction. Finally, we are very happy to report that we have made immense progress in our target to keep hazardous waste from landfill. As of 2022, 67% of hazardous waste have been diverted from landfills, significantly close to the 2025 target.
We have made solid progress in most areas, including the decarbonization plan. IVL remains committed to being a responsible industry leader and a world-class sustainable chemical company. With that, now I hand over to Alastair, and I'll come back with the CPET and the finance. Thank you very much.
Okay. Sound is okay? Okay. Thank you, D.K., and great presentation. Good morning, ladies and gentlemen. My name's Alastair Port. I'm the Executive President of Integrated Oxides and Derivatives. It's my honor to represent this growing segment and interact with you on what has been a very exciting year for us and an equally exciting vision of the future we've created. Apologies I can't be with you in person. I look forward to meeting you next time I'm in Thailand. Next slide, please. IOD continues to make credible strides towards becoming a sustainable specialty company with strong improvements in our portfolio mix and downstream volumes. Our Oxiteno acquisition, as D.K. mentioned, has been a resounding success with a well- laid- out integration plan, which is being executed with passion and care as we welcomed our new colleagues.
As we apply IVL's tested efficiency programs, we'll deliver our stated synergy plans across both operational excellence and the unlocking of commercial value. I believe our platform for integration and growth provides an excellent base to explore further organic and inorganic expansions and adjacencies in very attractive end markets and growth regions. We have invested a threefold increase in customer-backed innovation spend, including the addition of three state-of-the-art innovation centers in Mumbai, Shanghai, and here in The Woodlands in Texas. Backed by a global innovation project management office focused on increasing our new product introduction rate and contributing to forward-looking volume and margin growth within IOD. We've enabled a fully governed sustainability program, reaching all aspects of our business. Setting monitored KPIs across the breadth of our roadmap from diversity and inclusion through to operating envelope compression, biomass options, and our sustainable product offerings. Next slide.
Within IOD, we've now created a very strong integrated and cost-competitive platform with over $4 billion of revenue, 17% EBITDA margins, and double-digit ROCE for the first time. We have taken a leap forward in capacity and geographical reach to become the leading EO and surfactant producer in the Americas today. This, in tandem with strengthening our customer intimacy, has helped us to grow locally with key national and multinational customers. We serve highly attractive markets linked to population growth and an increasing need for crop production and yields. Growing urbanization and wealth and hygiene focus amongst the world's population is also driving our home and personal care and energy needs markets. Growing environmental consciousness is driving the demand for naturally derived biodegradable products in a range of formats, including powders, liquids, and tablets. Next slide. Let's look at what we do.
We're a key supplier to formulation used in all of our daily lives. Remember, our end customers are all of us in this room today, together with our families. Our products become the key ingredients in dishwasher liquids, detergents, hand cleaners, floor cleaners, soaps, beauty creams, bakery products, paints, brake fluids, and octane enhancers. Our propylene oxide goes into mattresses and white good insulation. For example, in a bottle of shampoo or body wash, about 30% of the content will be our products. This creates the desired effect, whether it's lather or foam, cleaning, moisturizing or softeners, depending on the needs of the person. What makes this business really attractive and really interesting is the contact services and the quality systems involved.
If you think of a product that could end up on the floor in cleaning, or in our, in our clothes in laundry, or on our skin, in our mouths or in our hair, or even in the car engines and brake systems, the product and technology and application quality management is of paramount importance. Next slide. We use this core bench strength of products and technology and application know-how to bring these effects across a broad array of attractive markets and recognize customers seeking a wide range of solutions. For example, we sell these effects such as foaming, antifoaming, frothing, antifrothing, wetting, viscosity modification, degreasing, and dispersion across separate markets, desiring a particular application performance but using the same base molecule. Hence, we create the effect and modify that effect for different applications.
Home and personal and car-care products is a $28 billion market, with more than 7% expected growth per year. As the world's population grows, the need for better crop solutions increases. This is a market worth $3 billion at that, at present, but the need to double crop production globally by 2050 is essential just to keep up with current projected demands. Coatings and resources is a $4 billion market across industrial mining, oil field, gas treating, and will continue to expand to more specialized metals and applications. Our IOD business provides an increasing wide range of solutions to all of these important end markets, and the potential for growth is significant.
As we think about this wide range of effects, this core science backbone enables further penetration into newer markets, i.e., food, pharma, and personal care, where our product technology will be attractive, and we've yet to grow significantly in these markets. Next slide. IOD is already a leader in significant key markets. We're the largest in the Americas, and we have presence in India and Australia. There's so much more potential for growth in our downstream business. There's a significantly opportunity to penetrate markets in Asia and Europe, as well as our much further growth in India. The current surfactants market is fragmented and there is potential for greater consolidation. The market has many small players and some very interesting technologies which would complement our existing portfolio and which we could globalize both organically and inorganically whilst increasing our high- value-added content. Next slide.
How do we envisage our future development in IOD? As mentioned, we're transitioning to a more diversified company with a wide range of both volume and specialty niche solutions. We see significant growth opportunity in transitioning the IOD downstream business more towards the specialty surfactants business. IOD is already a high-margin business with 10%-20% COMA margins in the upstream intermediates and 25%-45% COMA margin in the specialty businesses. Our journey towards more of a specialty focus will result in even healthier margins. We're expanding our innovation, marketing, and product management capabilities to penetrate these more specialized markets by offering our technology, product, and application knowledge to new customers further down the supply chain.
By moving across the diversified and more specialty and niche end of the surfactants value chain, IVL will be able to, 1, deliver a more specialized value proposition for our clients. 2, focus on more on innovation and new technologies. 3, increase the percentage of R&D in relation to revenue. 4, and most importantly, significantly increase our EBITDA multiple valuation. We already have several product lines which compete with our peer specialty companies, which are now being expanded and globalized to increase our share of our specialty wallet. The next slide. This leadership across key growing end markets is a result of our focused growth strategy.
Remember in 2019, we had 175 employees in IOD associated with the Lake Charles and Clear Lake facilities. Now we have 3,200 employees around the globe. We've built and enhanced this business through a sequence of strategic acquisitions over the last three years. We've demonstrated a track record of above-promise delivery. If you remember, the original Huntsman target was $48 million of synergy, and you can see we're running at $108 million today. Oxiteno target is $100 million, and we've already unlocked $20 million of that $100 million. We've de-demonstrated high teen ROCE levels across these two large acquisitions. We've built the systems in place to identify and deliver on synergies and manage effective integration, and this will support the potential for ongoing organic and future inorganic growth. Next slide. Turning to our customers.
We're developing a strong focus on innovation and R&D. This innovation journey needs to be closely bonded to our customers, creating better solutions that help them to achieve their sustainability goals. Our innovation needs to be delivered by bringing together the key elements of sustainability, enhanced performance, whilst also having the right cost structure. Three things difficult to do all at the same time. The bio-based products and the free- from products are of particular interest as we see customers becoming more and more attuned to natural ingredients. There's also a growing demand for laundry products that allow reduced energy usage, reduced water usage, and reduced cycle times in our machines. Cleaning products need improved efficiency. Coatings are moving more towards water-based whilst maintaining high protection and durability.
Crop solutions need to be bespoke bio building blocks for insecticides and herbicides, with improved application control for the active ingredients. Over the last two years, we've been building a best-in-class global innovation team to unlock these chemistries and effects. Next slide. Innovation and R&D are also key enablers, linking our sustainability strategy to our growth in adjacent markets. We see potential for increased future value creation from sustainability, and we have two goals for 2025. 50% of our new products launched from 2025 will be classed as sustainable, and 15% of our overall revenue will be from sustainable products. Secondly, we're pushing ahead, as D.K. mentioned, with a project feasibility study to produce ethylene carbonate, using both our EO and the CO2 that we capture from our plants. This will move into the electric vehicle market chain model.
This is a large addressable market, expected to grow between 8% and 10% per year, reaching 600,000-700,000 tons a year, with a current manufacturing capability in the U.S. of about 50,000 tons. It's a significant market that we can penetrate very rapidly. The demand here is also being driven by potential incentives from the U.S. Inflation Reduction Act stimulus package and the desire to manufacture onshore. It's a very interesting opportunity for us. Next slide. In summary, we've created an enhanced business model based on a growing our downstream portfolio. We have a strong sustainability and innovation roadmap bonded to both customer and societal needs. We will look for opportunities to enhance our platform and to grow our HVA portfolio globally, and we've got a really interesting future coming forward. Thank you.
Now I'll hand it over to Mr. Chris Kenneally, who'll speak about the Fibers business.
Good morning, everyone. My name is Christopher Kenneally. I'm fortunate to be the executive president of our Fibers business, and it's a real pleasure to be with you here today, and I thank you for joining us. If we go to the next slide. Look, much has been spoken about this morning regarding the volatility of the external environment we operate in, and Fibers has not been immune to that. D.K. spoke to how we will successfully operate, how we navigate through such an environment, focusing on value protection and value creation. That sentiment, that direction, is really at the heart of the Fibers business plan going forward. During the course of 2022, we undertook what could only be called a fully comprehensive, objective review of our Fibers business, both internally, analyzing, challenging our strengths, identifying where we've got weaknesses, where we've got deficiencies.
That's the value protection part. We also looked externally. Where can we leverage those strengths for the next cycle of growth? That's the value creation part. What has that led to? I think immediately it has taken us to take decisive actions, and that's really shaped our business plan. We've had to take critical, at times, aggressive steps to optimize our portfolio scope, to turn around or take action on underperforming sites. We will continue to capture efficiency gains. You know, this is an area where we have a relatively good track record right across the IVL business as outlined in the Project Olympus. We need more. You know, to date, Fibers has generated over $160 million worth of efficiency gains. We will increase that by a further 50% by 2025.
The next two objectives is really about the value creation. You know, innovation, humbly speaking, we think is a strength that we can leverage going forward. I call out here a couple of areas, particularly in the area of light weighting for the electric vehicle market and sustainability products, predominantly for both mobility and the hygiene markets, where our ambition there is actually not just to be market leader, but develop products that will actually lead the market. Which in turn is our overall priority to return Fibers to double-digit ROCE. Fibers holds a leadership position across all the verticals. We are the number one producer of staple fiber in ASEAN, as well as having leadership positions across automotive safety, tires, and bi component fibers in hygiene. This position is supported by a few key elements.
Firstly, our leadership in the polyester value chain, which is a key connector to the IVL Group. Secondly, our innovation focus and ability to navigate the customer qualification requirements generates customer stickiness. Finally, our sustainable product offerings being developed by ourselves and the ecosystem that we're creating around us will be critical to continue. Now, up front, I need to acknowledge our ROCE of 3% is not where we want it to be. A key objective of this morning is to hopefully illustrate to you all a clear roadmap to improve on this front, which includes the recently announced reconfiguration of our manufacturing footprint. We believe that Fibers has the potential to grow further, supported by key mega trends in the external world.
You know, mega trends such as urbanization, the growing middle class will only grow and enable our business to continue to grow, particularly in the emerging markets. I want to spend some time talking about the three verticals and their core value proposition. Our Mobility segment is the leading global supplier of products to ensure safety, comfort, performance in the tire and automotive safety sectors. You know, one in every four airbags around the world contains IVL fibers. Our Lifestyle segment supplies the fibers and yarns needed across major growth markets, including apparel and home interior products. This is one of the verticals that will clearly benefit from the mega trends relating to population growth and urbanization. Finally, our Hygiene segment, a trusted global partner of some of the largest hygiene companies in the world. One in every two premium diapers contains IVL fibers in it.
The growing middle class comes to be in the new emerging markets, so too will the penetration of these applications. The verticals, whilst appearing diverse, are united by a focus on safety and performance, as well as our quality leadership and our innovation, all of which in turn forms a foundation of our trusted customer partnerships around the world. What further underpins these three verticals is what I mentioned earlier, IVL's leadership in the polyester value chain. We actually take this beyond by actually sharing sites with our Combined PET division that further maximizes the integration and synergies across our business units. Indeed, I think it represents the One IVL in action. Resiliency is always an important aspect of a business, but certainly in volatile times, it's critical.
This slide attempts to demonstrate by the performance of our contribution margin over the past years of how that resilience has come to life across our three verticals, where we've maintained a range of $500 per ton. During this timescale, the segment had to withstand a number of extraordinary headwinds faced by the industry. The blue line on the graph represents the Mobility and Hygiene vertical and demonstrates their ability to actually grow margins in such a disruptive time. The diversity of the Fiber segment is certainly one aspect that contributes to this resilient characteristic. If I just touch on each three of our verticals, the lifestyle vertical, a volume business, has its foundation anchored in serving large and growing domestic markets like India and Indonesia.
The mobility and hygiene vertical strength of performance reflects the customer partnerships, our track record to succeed through their qualification processes, and most importantly, our drive behind higher margin products. 2022 was an extraordinary year in which we had the Russia-Ukraine conflict, gas crisis in Europe, and China lockdowns. We have seen in the past that typically one of our verticals provides growth in an otherwise challenging environment. During the 2020/2021 years, we saw a successful year for hygiene. During the spike in the freight crisis, we were able to see the lifestyle vertical withstand and grow, particularly because of their presence in such high- growth local domestic markets like India and Indonesia. The point of this slide is that that is not enough. Increasing our focus on our competitive strengths is key, as well as continuing to take the necessary actions required.
What I mentioned earlier, taking those decisions in terms of optimizing our portfolio, addressing where we've got turnarounds in our manufacturing footprint, and ensuring our organization is ready to form the foundation of the plan going forward. Going forward, building on these strengths is certainly leveraging our polyester expertise, our market leadership across the three verticals, as well as our strong customer relationships. As I mentioned, during the course of 2022, we undertook a strategic self-assessment with the support of external advisors to refine what makes up our core proposition. This has led to an increase of our focus on the polyester value chain linkages and innovation. In addition, we questioned where we need to manufacture, in which regions we need to be, and have taken the necessary steps on the underperforming sites, shifting to higher- performing sites in lower- cost locations.
As such, as referred to before, we've had to make the calls as to what we do, and that means what we stop doing as much as what we double down on and grow into. To realize this potential, we've taken a $120 million impairment for the fiber segment and taken action to optimize our portfolio, all of which will reduce fixed costs by $25 million over the next 2 to 3 years, particularly focused on our EU business. Importantly, at the same time, fibers will double down on our core strengths across mobility, lifestyle, and hygiene. I'll expand on that in the coming 2 slides. We will selectively invest in innovation, high growth markets and adjacent applications for sustainable solutions. Let me take a moment to discuss innovation and sustainability.
Across all our verticals, our customer brand owners have requirements for sustainable products, this is where fibers partners with our customers to develop offerings that support them in achieving their commitments, and at the same time strengthen our aim to not just be the market leader, but the leader of the market in this regard. To give some examples. Firstly, technically demanding tire cords made from recycled PET. Secondly, innovative Breathair cushioning, 3D material made from polyesters as a substitute for polyurethanes. Thirdly, a first of its kind, biotransformation polypropylene fibers and nonwovens to address the plastic litter issues, all of which are market-leading propositions. If I go a little bit deeper into these.
Recently at the 2023 CES Exposition, Consumer Technology Association, FORVIA or formerly known as Faurecia, who is an automotive technology group at the heart of smarter and more sustainable solutions, announced a partnership with Fibers to develop auto seating using Breathair technology, delivering a host of benefits, including lightweighting and recyclability. Lightweighting is critical, as mentioned earlier, for the electric vehicle market going forward. Lightweighting tires to reduce rolling resistance and improve energy efficiency of EVs is another of several ways we are enabling this transition. Others include lightweight composites and hollow fibers for auto interior carpets. We humbly believe we're at the leading edge on in this regard. We've developed a range of biodegradable PET and biotransformation polypropylene solutions to mitigate litter without creating microplastics.
Our sustainable products in hygiene now span consumer- relevant platforms of circular, renewable and low carbon products that exceed the highest standards of safe chemistry. We're taking our expertise in nonwovens and hygiene to grow the medical applications. I think another great example is Trevira CS, which is acknowledged as the leading flame-retardant PTT fiber. Moreover, we're making it sustainable with feedstock from advanced recycling and renewable sources. Importantly, we're leveraging our Indorama Ventures expertise in recycling PET polymers and fibers to develop solutions for the textile circularity. While the E.U. is recognized leader in this effort, this is a global need that we feel we are well-positioned to serve. Fibers has growth potential, and this is the value creation element. That potential will be realized with a disciplined approach by taking the decisive decisions regarding our portfolio that we've undertaken.
We've identified growth projects we're confident can add $100 million EBITDA with a relatively short payback period. Each vertical has their own growth opportunities. Just to highlight a few. In mobility, PET airbag yarn, we're growing our market share in the Americas and Asia and reinforcing the level of our integration into fabrics, which has a potential market size in the range of half a billion dollars and annual growth of 9%. In lifestyle, we're doubling down on the regional high-volume fiber and filament businesses across our emerging markets, where the Indian filament market itself is a significant $4.5 billion and growing at the vicinity of 5%. Likewise in hygiene, we're going to expand and actively enter the medical market, which is a $5 billion market, and grab a greater share of that margin pool.
These projects span capital expenditure, industry partnerships, as well as new product applications. We're focused on investing in the right regions, in the right categories. What's a right category? A right category is the one in which we've got a fair and reasonable right to win in to achieve these growth ambitions. The efficient use of capital across the business, which has the single-minded focus of improving our ROCE. Finally, I'd like to touch on what does that all mean for our financial outlook? As I acknowledged, our ROCE is not where we want it to be. The plan I've just outlined provides a roadmap that encompasses a reconfigured manufacturing, portfolio, and organizational blueprint that brings the segment back to respectable double-digit ROCE of +10%, last achieved in Fibers in 2017. What supports this objective?
Supported by fixed cost reductions I've referred to of approximately $25 million, the ramp-up of existing growth projects in India and the U.S., as well as the hygiene state-of-the-art line currently being installed in the U.S. market as we speak. Not to leave out Project Olympus, which has been and will continue to drive efficiencies and further our gains out to 2025. Much of those factors are in our control and hence our confidence. We also have the advantage of the strong megatrends enabling the opening up of new regions and application penetration across emerging markets. Our strength and innovation will ensure we grow with our existing customers, but as importantly, with our new customers.
In conclusion, the decisions that we've taken surrounding our portfolio and our manufacturing footprint set us up for a next cycle of growth and will only further strengthen the future readiness and relevancy of our exciting and diverse business, which is Fibers. Thank you for listening, and I'd now like to hand back to Mr. D.K. Agarwal to talk about Combined PET. Thank you all. Khop khun khrap.
Thank you, Chris. Let's talk about cash cow now. The Combined PET, a business which we have built, very geographically diversified, a vertically integrated, capturing the value chain. What are the key themes and objectives we will address in this section? Today, IVL is undisputed leader of PET in the world with 18% market share. As you saw, this is the beginning. Actually, there's a lot of growth opportunities. This leadership has been cemented by our new recycling initiatives, which you will see that we are the leading recycled producers in the world. As you saw, our share in the F&B packaging market is only 2%, so there is a substantial upside in our long-term growth, including conversion opportunities from other polymers due to unique properties of PET. PET is highly recyclable, low carbon footprint.
To achieve this is not easy to do conversion as quickly. What we are doing, we'll have to double down on our innovation because we want to create the functional properties of PET. There's a lot to grow. We are well-positioned to capture additional growth in consumer essential, especially in emerging markets where per capita consumption is very low. In India, the per capita consumption is only one kilo, while in Thailand, we talk about seven kilo. Very important project, Corpus Christi, remains a top priority for IVL. That will be the most cost-competitive and integrated asset in the United States. With latest state-of-the-art technology, we operate this technology in Rotterdam. We have PET plant in Brazil. This has a proximity to the raw materials. This will significantly benefit our cost structure in the United States.
We are on track to deliver our recycling target of 750 kt per annum. Actually, it will be achieved before 2025. We have made a very focused group to engage in new technologies, as you heard from my previous presentation, for chemical recycling of PET material, which cannot be mechanically recycled. You know, our present investment are around mechanical recycling in line with our Vision 2030. Let's look at the next slide. What we have achieved. We have achieved a $1.3 billion EBITDA, 12% EBITDA margin, 24% ROCE. We also took an impairment of a non-performing PTA asset. It was better to buy PTA rather than burning cash, and that was $140 million. Today, IVL is a top producer of PET with 18% share in the market.
The position of future growth is cemented by our leadership in recycling. Recycling is the future, as you can see. We continue to invest in recycled PET division and will become a significant contribution to our overall financial performance. Our ability and capacity to recycle PET at a scale means we play an important part in the development of more sustainable and circular approach to plastics. We are also a global leader in PIA. This goes into PET and coating industries with 20% market share as the only producer of NDC in the world. For you, NDC goes into the storage of the cloud media as well as it goes for the iPhone screen. Looking at our global footprint, we are the only integrated player in Europe today, and only fully integrated player from ethane to PET, from ethylene to PET in Americas.
In the emerging markets, we are taking a leadership position in packaging to provide solutions to our customers. A large portion of this business and markets are consumer essential, as you saw, demand is very resilient. Pepsi, Coke shows very strong results. Growth has historically been a multiple of GDP, and this will continue to be in multiple of GDP. Let me explain to you why. The significant growth driver in this business segments are growing in emerging markets. You will see a per capita consumption slide coming on. New applications for PET. During COVID, there are several application. It replaced it, polystyrene thermoforming food packaging, face shields. Abundant conversion opportunities from other polymers and the growing demand of sustainable products. People want to have packaging which is sustainable.
IVL is well-positioned to unlock all these growth drivers because of our superior scale, our geographical distribution, our high level of integration, because we capture much more value chain, our deep customer relationships around the globe, and our leadership in recycling. Very strong business, CPET, and poised to grow further. Next slide. It's very important to understand this geographical spread because that gives you a very preferred supplier status. What happened in last 2 years when the supply chain got disrupted, everybody was scrambling for the product, and we could serve our customer much better. We serve our customer locally, giving us a significant advantage. As I mentioned, we have 18% share of the global PET market, excluding China. China, we are small. If you exclude China, we are nearly 25% of the global market.
What we have done over the years in this business is a very efficient model, which is we have created. Our cost structure is continuously improving by debottlenecking the assets, reducing the cost, we are in the top quartile position in each region and each asset. I just talked to you about the PTA asset rationalization. We have high level of integration capturing the entire value chain margin. Our strong global relationship to the customers gives us a unique advantage of consistent sales volume. Very important to have consistent sales volume, as we can provide them global solution, good globally. We can give to Coke everywhere in the world. That gives us the consistent sales volume. Next slide. Now, it is important to understand the PET, how does it compare with the other materials.
PET is a superior material of choice compared to alternatives such as aluminum and glass, and compared to other plastic products as it is the most recycled plastics. PET is twice as cost competitive, has the lowest carbon footprint, which is a very important thing, and has the most versatile material. It can be used for all single and multiple packaging sizes. It is because of these clear benefits of PET has continuously grown faster than the alternative packaging material. As I mentioned, globally, this was a 5 million ton business, has become now a 30 million ton business globally. PET from 1995- 2022. PET is the preferred category among brand owners because it is the cheapest way of delivering their drinks in a sustainable manner. PET stands out as compared to the other packaging material. Next slide.
I want to highlight that while our PET business has grown to this undisputed leadership, this business will have still lot of huge potential for growth. First, consumer demand for sustainability is growing stronger. They want sustainable packaging. We are helping our customers to find the solutions they need to be more sustainable. Recycling, as I mentioned, has become one of the most important levers for our business. It gives us seat at the table with all the brand owners in mature markets, and we are doubling down on our efforts. We're already at 750 kt target by 2025, and we are planning to do it 1.5 million ton. Recycled materials or packaging is becoming even more attractive as some of the countries in Europe are rolling plastic tax. This is only applicable on virgin polymers and makes recycling attractive.
We also produce single pallet solution, which is a hybrid resin consisting of recycled content up to 40% using existing PET assets. You may have a question, what do you do with existing PET assets? We just put an extruder, and we make this blended resin with minor investment. Secondly, there are also opportunities in the emerging markets where the demand for the PET is still unfolding. Our CPET business today is well-positioned to capture this growth with PET seen as a convenient, affordable, and increasingly sustainable source of packaging for consumer essentials. As I mentioned, there are so many conversion opportunities across application from other plastics, as you can see, and we are doubling down on the innovation. Next slide. Recycling. Let's talk. We are also working closely with our customers on sustainability solutions to help achieve their sustainability target.
As part of this, we are building our recycling footprint around the world. Recycled PET is an increasingly significant part of our business. Our ability and capacity to recycle PET at scale means we play an important role in this whole time. Well, the results has not been great. In 2022, we operated this plant at 53%, negative ROCE. It's not due to the pricing. It's due to the reliability because we acquired so many assets, old assets. We are fixing them. We are very confident that this will go into a 10%+ ROCE. We are in consolidation phase of these facilities. We are working to improve operating rates at recently acquired facility by upgrading them and solving the reliability and also manpower issue. You must have heard about the manpower issues which United States had last year.
All these are getting addressed, and our target ROCE is about 10%. This recycled PET combines enjoys a premium over the virgin resin, and there is a very, very strong demand. It's not the demand which is the issue. Next. Important. This is a very important project. Corpus Christi, as you know, we kept a pause during the COVID. We reactivated. This is jointly by the three players who have 90% market share. This is a key growth project for PET in Americas. It is the most cost-competitive integrated assets in the United States and why? It has the latest state-of-the-art technology. It has lower PX consumption. We operate this technology in Rotterdam. The production from this facility will primarily replace imports in United States.
U.S. imports about 1.1 million tons. This will be the most cost-competitive facility. It is very strategically located because raw material is connected. The paraxylene is connected by pipeline. Ethylene glycol is produced by SABIC and Exxon only 1 mile down. It's going to be a very cost-competitive asset, and you can see on the left-hand side the cost curve. This will be completed by fourth quarter 2024 and early 2025 will be the commercial operation with a 5-6 years payback. Let's go to the next slide. Let's talk about per capita consumption we touched. You see the North America is 11 kg. PET being most convenient, affordable, and recyclable will continue to grow being material of choice. PET has grown in multiple of GDP.
Last year, it grew by 5.5%, and future growth is expected to be multiple of GDP, at around 3.5%-4%. Of course, if GDP grows more, this will grow more. Per capita consumption, as you can see in the left-hand side of the curve, in emerging market is significantly lower than developed market. These markets are growing rapidly on the back of rising middle class and urbanization. To just give you an example, Indian market grew by 24% in 2022 and still at 1 kilo per capita consumption. Imagine Thailand at 7 kilo. As the, you know, the retail formats opens up, the PET demand will go up. IVL has a presence in the major emerging markets and will continue to capitalize on the growth potentials of these markets. Next. Packaging.
You may try to understand what is this packaging. We make preforms, bottles, and closures. We have a joint venture in Thai Beverage in Thailand. This is a very high- margin, consistent -volume business. We can't invest in Europe and United States because then you compete with our customers. This is one of the very big priorities to grow this space. This also helps IVL to build customer intimacy and provide solutions for them in emerging markets like Coke and Pepsi. They want to grow in the emerging markets, Africa, Middle East, Southeast Asia. In the medium term, our packaging capabilities allows us to expand into packaging adjacencies that address a market like home care and personal care, and this builds further integration between our CPET and IOD business, as I was talking about Procter & Gamble.
A lot of opportunity to grow this packaging business. This is a conversion opportunities. PET is low cost. Recyclability, convenience, and breadth of use makes it a more attractive option compared to alternatives like glass, PVC, and polystyrene. I mean, I just gave you an example of Thailand earlier. There is a substantial upside potential for long-term growth across segments where PET has a very low share of the addressable market. You can see in the left-hand side that in alcohol drinks, it is very small. Actually, PET is emerging as to replace glass for wine bottles. You see wine bottles coming in PET. Paints being put into PET. That's a lot of other applications coming. Reducing the gas barrier cost and consumer acceptance of plastics can substantially enhance market share and PET in the global beverage like beer.
Beer we have not been successful, it is still consumer wants the cold feel of the glass. There is still a lot of opportunities. IVL has emerged as one of the leading specialty PET producer, leveraging our global patents, innovation capabilities, and as I mentioned, we are doubling down on these initiatives. To summarize, we achieved a record EBITDA of $1.33 billion, ROCE of 24%. This was on the back of high freight cost, which benefited us in import parity and high integrated margins in first half of the year when the supply chain was disturbed. Volumes will grow from 10.3 million to around 11.5 million by 2025, with of course better operating rate of the existing assets as we had in the fourth quarter, a lot of destocking.
Expansions in India, we are 200,000 tons plant is getting started in May. Nigeria expansion, as I just talked about to the Corpus Christi and the recycling assets. We are very confident of this volume. Based on normalized spreads, not considering 2022 spreads, we expect continuous strong performance from this business, delivering a ROCE of 17%-18%. This remains, as I said, a cash cow business, a very strong position which we have. Let's go into the next session, which is the finance. Go to the next slide. It's important to understand what IVL has created. What is the cash flow predictability? IVL has healthy and predictable cash flow across business cycles, as evidenced by our performance in the last few years of complex and very challenging environment.
Our cumulative operating cash flow in the last four years has been $6 billion versus EBITDA of $6.2 billion, giving a conversion of 97%. EBITDA conversion of cumulative has been 97%. Very strong conversion. We plan to further reduce our working capital by $500 million, reducing our cycles by six days. Certainly the interest rates are moving up and it's a very important endeavor which we want to do. We have a very robust risk management for FX, interest rate, and commodity hedges, which we'll continue to strengthen with the help of digitalization. We'll use different tools to further improve it. Our healthy cash flow allows us to keep our debt equity ratio in control to 1.11. This is pre-impairment.
Even with two major acquisitions, as you saw, Oxiteno and Vietnam Packaging, with a sizable growth CapEx of $1.9 billion. Our acquisitions, as you saw, has been value accretive and improved our ROCE, reported ROCE to 16% in 2022, and our earning per share grew to THB 7.01, of course, pre-impairment. Project Olympus, as Mr. Lohia was mentioning, has unlocked $449 million, and this cuts across operation excellence, sales excellence, and procurement efficiency, and this will continue to unlock values. We are further investing in the standardizing our processes through investment in SAP S/4HANA. This is a chemical company, the first chemical company to launch such a large SAP S/4HANA and various digital initiatives. These are the corporate objectives from finance point of view. Let's go to the next slide.
Based on our existing CapEx commitment over next three years, based on a normalized margin, we expect an EBITDA of $7.1 billion, an operating cash flow of $6.4 billion, which is a conversion of 90%. These plans are underpinned by a business that has visible, strong and growing cash flow as evidenced in the past. We always had a great predictability of our cash flow due to the resiliency of our business and geographical footprint, which we have created along the years, and you heard all the presentation from different businesses. Based on the projected operating cash flow and committed CapEx of $2.4 billion over the next three years, we expect to deleverage by $2.3 billion, bringing our net debt to equity by 2025 to 0.55 or 0.6. What it leaves?
This leaves a headroom of $3.5 billion- $5 billion for growth projects, which Mr. Lohia talked about, keeping disciplined our net debt equity of 1- 1.2. We are a very growth-oriented company, certainly we'll look at different opportunities in IOD platform and other businesses. This projection does not include any M&A, as I mentioned, which will further enhance our earning potential in line with the strategic growth targets. Of course, we always, being a growth company, we always try to return value to our shareholders in the form of consistent dividend. We give quarterly dividends every quarter. Next slide. Amidst the volatile and uncertain market outlook, we continue to demonstrate our ability to generate strong operating cash flow to support our growth trajectory.
As you can see, our volumes are estimated to grow by 5% in 2023 to 15.4 million tons. This is just, I mean, the first quarter itself will be at 3.6 million tons and will further expand to 16.5 million-17 million tons by 2025 with whatever projects we have committed, Corpus Christi and the organic growth. Our annual run rate EBITDA is expected to remain strong and will further expand through projects in pipeline and Project Olympus initiative.
By 2025, we expect to deliver on a conservative basis $2.5 billion-$2.6 billion of EBITDA, even after normalization of margin based on the growth of the volume and enhancement, which Alastair talked and Chris talked and I talked of the value-added product lines. Our average EBITDA per ton in the last 5 years, as I mentioned in the earlier slide, was $140 per ton, excluding 2020. This is gradually improve in the next 3 years with a better product mix. Domestic market premium, you know, we sell in domestic, and these markets are growing where we sell with premium and change in the cost structure.
In the last two years, we have delivered a return on capital employed in excess of WACC, and our target ROCE will be in the range of 13%-14%. This gives you some visibility of our earning going forward. Next slide. This is an important slide to understand our business by dissect the business. If you see the slide, about 58% of our business is less volatile and is more consistent earning. What is this business? This includes North America integrated PTA, PET assets because the entire value chain captured market is consolidated. NDC, we are the only producer. Packaging, as I said, consistent return. Specialty polymer and integrated downstream business, as well as mobility and hygiene because there we enjoy good margins. Why this is now resilient?
This is due to structural contracts which we have as pass-through of the raw material cost. Pricing power, including the value pricing which we can do. Innovation and customer-based solutions. We continue to expand this. By 2025, two-third of our business will have such stable earning as we continue to enhance our high-value-added products through innovation, and thus consistently improving the quality of funding. The focus is continuous to improve the quality of funding with low volatility. As I just mentioned, we are not exposed to a single product line like refining or polyethylene polypropylene. Next slide. If you look at the cumulative cash flow, we expect to generate operating cash flow of around $6.4 billion over the period 2023-2025. Out of this, $1.3 million is to maintain the assets.
These are just the maintenance expenditure or the maintenance CapEx. $1 billion will be used for interest payments because of high interest rates. Free cash flow is expected to be about $4 billion after interest and maintenance expense. As I mentioned, we have budgeted $1 billion worth of strategic investment in various segments to grow our business, such as Corpus Christi, India project, recycling and other expansions in the fiber business. Our dividend policy is to reward shareholders with a minimum of 30% net profit. We are one of the few companies on SET50 that pays dividend quarterly. This is testament to the strength of our business model and visibility of cash flow. Net debt is expected to reduce, as you can see on the slide, by $2.3 billion.
Gearing will reduce to around 0.55-0.6 by end of 2024, leaving a headroom, as I mentioned, about $3.5 billion-$5 billion for further growth of the company. We are a growth-oriented company. Next slide. I talked about working capital in this high- interest environment. We are also proactively looking to mitigate the challenges of operating in a high- interest- rate environment. The disciplined capital management plan will optimize our working capital by $500 million in 2023, and this will be achieved by reducing 6 days of working capital cycle from 71-65 days through reduction of inventories and receivables. That's the plan for 2023. Next slide. Through our experience of managing business cycles, I mean, liquidity is very important. Cash is the king.
Today, we have $2.4 billion of cash and cash under management, plus unutilized committed banking lines, so a lot of liquidity. Our debt service coverage ratio for 2022 was 2.54x , showing prudent management of our yearly debt repayment and how we stagger our repayments. The repayment obligations are well spread out, as you can see on the right-hand side, through to 2027, leveraging on our relationships and the debt market. This is including debentures repayments. The debentures, as you know, will be refinanced on maturity, creating more liquidity and a strong DSCR. This is gross repayments, net of debenture refinancing, it will go down. While global interest rates had increased in 2022 by close to 200 basis points, our cost only went up by 76 basis points.
This is very important because 62% we were hedged as a fix. This was due to our limited exposure to floating rates. We expect interest rates will further move up in 2023. As you can see, Fed has been very aggressive. We may see increase in interest costs by around $70 million-$80 million, which has been factored in those cash flow. Our Forex risk is minimal because we follow a very hedged balance sheet, with foreign currency assets matched with the same foreign currency liabilities. Last but not the least, our sustainability-linked debt makes up to 20% of our total mix. We plan to increase this percentage by end of first quarter, 23%-27%. We've already tied up $500 million of sustainability financing to meet our sustainability goals. Next slide.
It's important to look what returns we have created over the cycles. This slide gives you 2012- 2015, 2016-20 19, 2020-2022 and what we are targeting, 2023- 2025. We have a proven record of delivering double-digit growth in the long term, evidenced by our performance over different business cycles. As you can see, in 2021, 2022, average EBITDA was 1.7, ROCE of 11%.
The return on capital employed over last 3 year has been 11%, of course, challenged by poor returns in 2020, as you saw the pandemic where the crude oil dropped significantly. We continue to look at various accretive investment, as Mr. Lohia explained, which meets the hurdle rate. Number of opportunities come, reject it if it doesn't meet the threshold. It must be have a synergy benefit and must be creating a value and EPS accretive. That's the way we play the acquisitions. Next. Now it is heartening to note that our TSR since IPO in 2020 is 452% as against the 209% recorded by SET50 companies. Not only from since IPO, we have consistently outperformed the SET50 over different time periods.
This is a comparison. I want to take this moment to acknowledge the support our shareholders has given us throughout the year. Many of you have been with us through thick and thin, and we hope that you see our commitments of rewarding and also to our lenders, that loyalty and support through this value, we consistently return to shareholders through capital gains and dividend payouts. Thank you very much. I think we'll take your questions as they come. Thank you.
Thank you, everyone. We are going to open the Q&A session now. We have audience here, and we have audience joining online. I invite Mr. Lohia, Mr. Agarwal, and Chris to join here. Alastair, can you please join us online. If you have any questions, you can ask now. We have people around with the mics, and they will help you ask your question. The participants who are online, please, there's a option for Q&A, and you can put your question over there, and I'll pick it up, and I'll ask on your behalf. Can we have the questions from the floor?
Thank you, Vikash, and thank you, Mr. Lohia, D.K., Alastair, and Chris for the. nsightful presentation. I have two questions. First one is, it has been an amazing journey for the past 10 years for IVL growing the business. What is the next phase? Are you going to focus or plan to grow your business in surfactant? Are you happy with the 5% global market share with your headroom of $3.5 billion-$5 billion? That's the first question. The second one is on the IOD. It still seems like you are very bullish on the IOD. I wondering, MEG has been in downturn for so many years. How long would it take for the strong demand polyester MEG to absorb the excess capacity, putting it on recovery path?
Until then, we just have to rely on cheap ethane to help improve its profitability. I want to ask you about the, what's your take on the ethane price in the intermediate terms from the U.S. The third one is on, also on IOD. It is about MTBE. Can it what would be the intermediate term booster for this business? In particular, do you think the short-term octane tightness to continue over the next 12, 18 months? Last one is for D.K. It seems that you're not, are your forecast on CPET is realistic or conservative? You are assuming the current spread to be easing because of the easing of the logistics challenges.
What set this industry apart from the other chemical chains that we have seen, which is suffering from the huge oversupply situation? Thank you.
Hi, Khun Anson. I can recognize your voice, but I can't see you. The light is very strong. There you are.
Okay.
Sorry. Thank you. You know, first, you saw that the first thing we presented was IOD. You know, for the last 15 years, you know us very intimately. When was it that PET was not the first thing presented? IOD was the first thing presented. I'm glad that it's getting recognition, because when we started the real growth of IOD in 2020 with Spindletop, at that time, everyone was very skeptical on what are we doing, including about MTBE. I think people could understand the downstream of ethylene, downstream of EO, into MEG, into other derivatives of ethylene oxide. It was very difficult for everyone to understand the reasoning for getting into MTBE, and that's one of your question.
Now, we have said this before, and our PET value chain is a very robust value chain and that continues to grow and will continue to grow.
Especially that we are building some new plants, the Corpus Christi plant. We are building a new plant in India. But I'll leave that to D.K. to explain after my comments. We have a very robust CPET value chain, but it can only grow at single digits because, you know, we have a large market share, and the organic growth of PET is about 5%. We'll grow at that rate. For IVL to grow at 5%, and which is only, let's say, 65%, two-third of IVL, the overall IVL growth then would be only 3.5%, which is much lower than my aspiration to grow double digits.
We did have to look and hunt for a new, for a new segment, which we are very proud that we succeeded to find this new gem, where the IOD today gets center stage and gets the, you know, to get presented as a first. This is also how did we grow our CPET business? We grew our CPET business through consolidation. In this surfactant, which was your first question, we had the same opportunity to consolidate this business. Today, we have a leadership position in the Americas, but we are hardly present in Europe or in Asia. These two are large markets and therefore, this segment does deserve and will get our maximum capital allocation. The last three years were brilliant years.
I have that slide in my presentation, where from 2019- 2022, we have improved our performance, we have improved our returns, we have improved our dividends. When we think of the next 3 years, as we were presented today, this is based on the existing businesses and the existing commitments to capital. We also have $3 billion-$4 billion of headroom to invest in the next 3 years. This headroom would be invested. We are very confident that our balance sheet management, our visibility of our cash flow allows us to continue to be a growth company. Our aspiration still remains to double our EBITDA every 5 years.
As you can see over here, we did double our EBITDA in the last 4 years and kept our DE more or less at the same levels as we started out in 2020. On the MEG and MTBE, both of these are, should be in the CPET portfolio. Actually, they are wrongly placed in the IOD portfolio. IOD should be a downstream surfactant business. The MEG portion, which practically we started the IOD segment with MEG, with Clear Lake, it should be residing under CPET. That is an objective. We have not spelled that out over here, but the going forward objective would be to find a legal structure, if it's tax efficient, to move it from IOD into CPET. MTBE itself, as you have seen, is a hedge.
We lost money in paraxylene, we lost money in PIA, but we made money in MTBE for the same reason, which is expanded in the note that is in front of you, my perspectives. Basically, I won't go into too much detail of that. You, you know this very well. It is spelled out in my note. Therefore, the MTBE portfolio should reside more in the CPET. That will give us a more balanced view about our CPET business integrated into this, these large CapExes of MEG and in MTBE. The future of MTBE, I believe, is sound because it seems that with the geopolitical tensions, the price of crude oil is going to remain at these levels or at strong levels. The global opening up of the economies, the people traveling, will continue to keep the demand for gasoline high.
With that, our arbitrage is our shale gas advantage in MTBE, because most of the MTBE made in the rest of the world, as you know, is coming from refineries. The shale gas advantage in MTBE, the continued demand for gasoline will keep, I believe, the MTBE margins robust. Coming to MEG, my opinion is a little contrary to my management's opinion. My management has a very conservative view about the MEG business, and in this business plan, they have not really built any upsides in the MEG. I believe with the reopening of China. We have seen that in our lifestyle fiber business, which got totally driven down. I can never imagine a lifestyle business performing as poorly as it did in 2022.
It's not only us, I mean, the entire industry. For that, I'm still on my quest to understand that a bit more. Nevertheless, I do believe that today, polyester, you know, we use it for much more performance fabrics than we ever did. There's a joke I heard the other day, sorry to divert, but in the earlier times, in my grandfather's time and my father's time, cotton used to be a luxury product and polyester was a, you know, wash and wear material. It was a poor man's fabric. Today, it's turned around. Today, it's totally a polyester is expensive fabric, and it's a desired fabric, and it goes into all sorts of fashion compared to cotton.
Anyway, coming back to MEG, as the demand for polyester fabric, polyester itself will revert with the opening up of China, and therefore, the demand for the raw materials, both paraxylene and for MEG. Today, the last couple of years, we've been squeezed between low prices of polyester, low demand of polyester. PET was very resilient, polyester as a fiber was very weak. The low prices of fiber and the high ethane price, high gas price driven by the Ukraine war, really squeeze the margins in our MEG business, and that will revert back to historical levels. That's my take on MEG, MTBE, and the surfactant. D.K., on the CPET?
Yeah, I think, fully endorse, Mr. Lohia. As you can see this, graph here, MEG integrated spread. NAFTA has been much below variable cost. I mean, you're talking of $119, $115. Even went to $70. This is because of long olefin and average, you can see. It is no more near reinvestment economics. This is due to policy demand, as Mr. Lohia was explaining, the MEG capacity which got built up in North America as well as in China. MEG is only an upside. What Mr. Lohia mentioned, I agree with him that the assumptions in 25 are much lower. MEG is on track. MTBE octane, I think the most important thing is the refinery utilization in the United States is still very high.
The RBOB prices in the forward markets are very, very strong. If you can bring the MTB slide. You know, we make from gas. What is the crude oil likely to be? Crude oil with this geopolitical tension and the China opening, crude is all going to go up. This is an arbitrage again between butane versus RBOB. You can see the forward curve in butane versus RBOB is at a significant premium. It won't be 2022, second quarter, what you see peak, but we never know how the gasoline demand comes up. If you give your number in 2022, the U.S. MTB spread was around $536. January is $501. February is $516. We assume nearly $420 in 2023. There is a good upside on the MTB.
Of course, this will be driven by gasoline. Another dynamics which is playing out is the diesel shortage in because China was, sorry, Russia was exporting diesel to Europe. Diesel crack also because when you run a refinery, gasoline will be run less. This is gonna be very complex thing. Octane is going to remain strong, looks like. That's on the MTB. On CPET, of course, our assumptions on the margin has not been as 2022 because 2022, as we said, that there was a lot of interruption in the supply chain. We got the advantage. That has been not factored in. We have normalized that to the level because the supply chain has got normalized.
As I mentioned, the Western contracts in the fourth quarter earning has been all logged in at a better, which is basically, U.S. and Mexico contracts, which significantly contributes our EBITDA. The demand of China reopening is going to Last year, China had a negative growth of PET, about 1.5%-2%. When I gave you 5.5%.
3%.
3% negative. You said GDP growth in China was only 3%, so you're talking of 5%. Such huge China economy of 18 trillion economy spending so much money with savings, we are just at the beginning of this demand which is gonna come up. We are excited about the PET. As you know.
Let me add, D.K. What happens in PET, we go with the long-term trends. The long-term trend is $140, China. We don't know, some quarters may be lower, but we feel safe about the $140 build-up in the business plan. What do we do with these business plans? These business plans help us to understand what is our investable capital? What is our headroom? Based on this, we go and make strategic acquisitions or growth plans. In our minds, it's not a good idea to have a business plan which is aggressive. I don't mind when I say that I do not agree with the management on the MEG margins, for instance. That's fine. MEG margins will be what it will be.
If they keep it, if the business plans are made on conservative basis, I'm fine with it because I know, okay, $3 billion-$4 billion is something that I can afford to invest, and I will look for such opportunities. That's how we think about business plans. We had to get Chris to temper down his aspirations from mid-15% ROIC to now 10%+ .
We got the plus in.
Thank you.
Thank you. Thank you.
Yeah, Khun Anson.
Hi. I have two questions. First one, it's on Oxiteno results. It has been much stronger than you indicated at the time that you bought into the business. I'm just wondering what's the gap there, and whether these reasons that explain such a good result will sustain into the future. The second question is on the M&A market. Can you maybe share with us, like, what's the, you know, market is like right now in terms of who are the buyers, who are the sellers, and what are the assets that you will be giving highest priority in terms of adding into your portfolio? Thank you.
Oxiteno. Oxiteno in 2022 did better than ever. It had its record performance, partly because of some synergy benefits that we have between our IOD and Oxiteno. Number 2, we also had the advantage of the currency. The Brazilian currency was weaker in 2022 than at least in the living memory in my, in my last 4 or 5 years of tracking Brazil. Thirdly, Oxiteno is a strong agriculture. It supplies these chemicals into the agriculture, and Brazil is a strong agriculture market. In 2022, with the Ukraine war and other things, agriculture was a good business as well. That combination, I think the, the great intimacy between our managements, our North American management and the South American management, the knowledge that they have combined together, the platform that they have combined together.
The Pasadena, the Texas unit of Oxiteno, which lost money prior to last year, and that turning around and starting to make money. Certain raw material, you know, that Oxiteno was buying from third parties now is captively supplied by IOD.
There are multiple factors which led to this great performance. I see no reason why this is going to drop off. The only one that could change a little bit on the performance would be the Brazilian currency. When we look at the Brazilian currency, it is one of those currencies which has the highest net effective rate of Brazilian currency interest rate, is 7% after adjustment CPI. Whereas most other currencies are at 1% or 2%. I think Brazilian currency is at the moment weak because of the strong interest rates that they have. Sorry, I'm not economist, I'm not able to explain that well. I think there's a factor on the Brazilian currency that I'll just keep it in mind.
Apart from that, our total platform that we have got with Oxiteno and the chemistry between the two teams really allows us. That leads into your question on M&A, Khun Poom. Where are we going next? It is evident where we would look actively would be in the IOD segment. There are big opportunities in the IOD segment, which we will continue to build on. CPET has its own. It will carry on. CPET, you know, has its own legs. Fiber is something that Chris has to still fix. We've done a lot of forensics. We see still weakness in some of the assets. The ones where we saw no future, we have impaired, but there are still a big chunk of businesses under fiber that need fix. We'll continue.
Our target will continue to remain to double EBITDA every five years. This is over a cycle, just to be clear. If our 2020-2022 EBITDA on an average was, let's say, $1.8 billion, then our cycle from 2023-2028 should be more like $3 billion+. In the business plan, you only see $2.4 billion, $2.5 billion, $2.6 billion. This is based on, like I said, margins that we feel comfortable with, that we can rely on to meet our DSCR, to meet our debt obligations. Then the headroom will be reinvested in projects which are accretive, so we can double our EBITDA.
Thank you, Khun Poom. While we wait for other questions from the floor, I have one online. It's on the IOD business. The target for 2025 EBITDA and returns are similar to 2022, a little better. Does this mean that we'll see more focus on growing this portfolio and higher capital allocation to this segment?
I think it's evident. Let me give you another reason why that is the case. In CPET, we would get into the antitrust area if we were to acquire anything existing in some of the markets. Whereas in IOD, we are still a young kid on the block. There are opportunities globally that we can still acquire without hitting the antitrust hurdle. It's evident the thrust would be on IOD. On the IOD platform just while we are also very happy with our safety record. That's one business where we really have to be very good operators in terms of manufacturing. We deal with hazardous chemicals and therefore both in IOD in the U.S. and in Oxiteno, we find the people really, the PSM, they are well structured and they are well understood.
This is a mature industry in the, in the West, in the U.S. We have the best team who understand this. It's never production first, it's always safety first. You would witness that from the winter freeze. We took down the plant in Port Neches as a preventive measure rather than go through the storm or through the winter freeze. So I like that safety angle that the IOD management deploys, and I encourage them on that. Khun Sumit, I think you are trying to raise a. Yeah, go ahead please.
Yes. Sorry. Thank you so much for the detailed presentation. I have maybe three questions. My first question is broadly on your entire portfolio. I just want to understand the resiliency better. Could you please help us understand which moving factors offset each other? That's my first question. Secondly, on recycling advanced technologies. I understand there are a few in the offings, chemicals, biodegradable and whatnot. Which are the prospects that kind of excite you the most? Sort of say top three, where do you see, you know, breakthrough potential at some point of time? My third question is more on capital allocation as well. Recently what we have seen is you have once in a while M&As, but they are large, $1 billion, $2 billion.
But in the past, they used to be smaller. Should we expect something similar going forward or would it be more sort of, you know, broken into many assets? Just as a corollary on that, since we have been speaking about rationalization of portfolio, would you be also open to selling the assets instead of simply impairing? Where do you see, you know, room for rationalization going forward? Thank you.
Thank you, Khun Sumit. Good angles that you brought out. On resiliency, I think we can go back to my chart, my numbers. We had the perfect storm, I called it, 2020- 2022. We had all sorts of things happening, disruptions, destocking, storms. We had two winter storms I think in this period. I think one was in 2021 and one was in 2022. We have gone through weather patterns, we have gone through economic patterns, we have gone through COVID-led, you know, impairments or impairment of movement, let's say. Throughout this period, we've been able to come out with these, I think, fabulous results. The credit goes to our management and the keen desire to perform that they have, the can-do attitude that they possess.
Now how come we could do this? It's obviously because of our necessities portfolio. 70% of our portfolio still serves our daily needs. Those needs have to be met and have been met. What came to the rescue in 2020 when travel ceased was that e-commerce started and the food container business grew. There was a replacement of beverage by food containers. That resiliency continued. Today we have actually a higher demand because now PET is not only going to bottles, but it's also going to containers. One of my respected peers, they bought a business in Oman, which is in these containers, and they have done very well in 2022. That was a business that I denied myself. I did not want to increase plastic.
You would read about this, that IVL is looking at this plastic or that plastic. I can tell you it's not our focus to increase because we have a lot of plastic that we need to recycle already or renew or invest in biomass, renewable raw materials. Our interest is not to grow the plastic unless it's very, very attractive or very attractive valuations. The resiliency of our plastic, our PET, is the number one. Not only that, in the IOD segment, all the HPC products that we do in the fiber portfolio. The tires, one would think that tires would get constrained when vehicles are not being produced. We have told you this, that 70% of the tire demand comes from replacement tires.
When you're not buying a new car, then you are anyway replacing your tires faster. 70% of our business is resilient. What we have to do is we have to manufacture it competitively, and that is where this focus on our assets. Would we sell a business? Yes. Even those impaired businesses would be sold. They won't necessarily be scrapped. There may be a few more businesses that if we cannot fix, if between our segment heads they cannot find how they can fix it, and if we are not the rightful owners, then we'll put it on the block. The idea is that we need to have quality of earnings quality or quality of earnings, and for that we can only have the best assets. That's what will keep us competitive.
If we are competitive, we'll keep our market share or even grow our market share. That's on that. Why certain businesses make sense like MTBE. MTBE, we did try to explain this in 2020 and 2021 is a clear arbitrage with paraxylene. We buy a lot of mixed xylene to make PIA and to make paraxylene. It's actually the same volume. We buy about 600,000-700,000 tons of mixed xylene, and we make 600,000-700,000 tons of MTBE. They go hand in hand. Therefore, if I shift that into CPET, then I don't have to explain why they went up and down. It can be part of the CPET performance. That is important for the mindset of the management that runs CPET. The management of CPET only thinks of themselves as PET.
I may be over-exaggerating, but this is where they came from. This is the first businesses of IVL. The whole value chain integration and maximizing the performance of each part of the value chain, making make or buy decisions, is something that is still developing into the mindset of the management at the CPET level. If I put these assets under them, and then MTBE tomorrow loses money, let them dissolve it. Let them recognize that, "Okay, I lost money in MTBE, but I made money in paraxylene," maybe. How do I make money in both? Let them, b ecause they are the future of IVL, and they have to own it. That's one example of arbitrage that we have in our portfolio. You saw many of the slides where 70% is polyester.
Can you go to the polyester slide? How the 3 segments are connected. You know, it is a big business. It is a complex business, but that's a management job to understand that complexity and deal with it. You as a investor, come on, guys, it's a simple business. It's a polyester business. We use polyester and all the ingredients of polyester across our segments. We have leverage. We have scale. We are the world's largest polyester company. We will keep now deploying digitalization to improve our forecasting ability, to improve our sensing of our business, to be able to, w e have this global platform. Sorry. You know, we are in, I'm sure we are in 50 countries, not 35 only, where we have our offices.
If we weekly get them connected to each other, they can tell us what their customers are saying. They can tell us what their suppliers are saying. They can tell us what the economies are doing. We can put that all together in our visualization. I think the, so t hat part is very clear. On biomass, I mean, it's not only a license to operate. Biomass, biorenewable PET is the only plastic that can do it. Let's be bold enough to say that. There is no other plastic that can do it. Why would we not leverage on that? Invest in that. Even fail a few times till we learn how to do it. We have this new fully staffed group so that we don't take away the attention from the operating people.
We have a talented team who understand this business. You know, Marco Ghisolfi , who runs that division for us, used to be the world's largest PET company. M&G. What does he not know about PET? With him at the helm of that, he has reach, he has access, and he has time, and we have the capital to support him. Sorry. Large acquisition, yes. It takes the same effort to do small acquisitions well as it would to do a large acquisition. In a large acquisition, we'll be more mindful. I spoke about our governance, I spoke about our directors. You know, we spend the same quality time, whether it's a small acquisition or a big acquisition.
Today, we would like to, you know, really focus on key acquisitions that move the needle and which is strategic and empowering for the longer term for us. Rationalization I spoke about. Sorry, I'm going into longer answers, but I'm sharing with you how I feel.
Hi, thank you so much. Just one question I asked was also on the advanced recycling technologies. Are there any particular that you find like most interesting at the moment?
Yeah. That was the IBIS, that was Marco Ghisolfi. We have 30 projects that he's looking at. Amongst them, none of them are proven. We have to take the risk on each one of them. There are the typical pyrolysis type of. We are looking at those as well, but they're a little bit more advanced, a little bit more sure how you can do it. The enzymatic ones are more promising because what you use. You don't use clear flakes for advanced recycling. Clear flakes you can use for mechanical recycling. The objective is to use discarded flakes that don't have a home or fabrics, colored fabrics or containers. Anything with polyester contaminated in whatever manner, it should be able to be broken down into the monomers.
Those are the ones that we are also looking at. We are not ignoring anything. Like I said, at the moment it's too early days for us to. We will be investing in a couple of them, and therefore, this is a 2030 target. By 2030, it's not that we'll have few million tons of this capacity, but by then we would have established the commercial technologies that work. Like 30 years ago, PET was a niche. It was a high price. It was a $3,000 product. Today it's a $1,000 product. Similarly, for advanced recycling PET, it will be a $3,000 product to start with. With scale, it will come down to near parity with virgin.
I think just to add that this is the beauty of the PET. PET can be mechanically recycled, significant portion if you collect it properly. The chemical recycling will be more, which is polyester content is about 90%. This is much more challenge for other polymers, like high- density polyethylene. If you have a colored, then you have to go for pyrolysis or probably difficult. That's where the PET's winning part is. We're talking of 480 million tons of plastics total. PET is only 30 million. That's where PET has, if you improve the functionality, get more and more market share. That's the key factor. We'll continue to work on this, but this is only the difficult to recycle, you know, those polyester content.
Thank you. I can see there's one question online from Morgan Stanley. He's asking about fiber business, that, how does the fiber business reach returns that we see after the business restructuring and the plans? If you can give some more details on that.
Sure. you know, a couple of points. Number one, from where we are today, going to 10%+ returns looks ambitious. What gives me confidence in that objective is a few things. One is we've been there before. I mentioned back in 2017, we were at 10%+. We know we can get the business there. Most importantly is how we've entered into this year's plan. We've referred to it quite a bit, this strategic review that we undertook. Identifying where we're strong and identifying where we need to make the choices. We've made those choices, not just in terms of the manufacturing impairments, the turnaround plans that Mr. Lohia referred to, but also optimizing our portfolio. We've got a large portfolio, and we have actively taken out the lower margin elements of that portfolio.
I think those choices have been made, number one. Number two, if you look at the bridge going from 2023- 2025, there's no doubt we have forecast some corrections from the 2022 performance. China recovery, which we're seeing some positive early signs. We had a major impact on our Russian business last year. Russian business dropped to nearly 30% operating rate. We're now back up to 80% rates. We've got confidence in that element of the bridge, returning or recovery from previous businesses. The next step is we've got current growth projects coming online this year. India and our IRSL expansion, also our hygiene expansion in India is coming to life as we speak. Our investments within hygiene with the line that was due to go to Russia is now being installed in the U.S.
High-margin business an opportunity for us to grow. In addition to that, obviously the benefit we will get from the restructuring, 60 basis points, $25 million reduction in fixed costs, and transferring that volume from high-cost countries to low-cost countries. The final element of the bridge that gets us to the final 2 points is what I spoke about in terms of innovation. The innovative products that I referred to today, the light weighting within the mobility, the biodegradation within hygiene, they're real, and we're currently leading the market in deploying that with our customers within that timeframe. Is it a risk-free plan? I don't think Mr. Lohia or D.K. would accept a risk-free plan from me, but it's a well-considered plan. What makes me think that?
It's essentially what I started my presentation on, by telling you what we are stopped doing. Those decisions, I think, firm up a pretty sound foundation for that return growth we're forecasting.
Let me add to that. We had these assets. These assets were bought. When we bought these assets, there was a reason why we bought these assets. What we did not do, and which we are doing now, is we are making all the fiber assets work as one IVL. All these companies, 12 of these companies, were still working as they were working as a previous owner's company. We have this mister doing that, we have that mister doing that. They were not doing what IVL way is. Now they will have to work the IVL way, under one IVL team. You know, if you go to any of the exhibition, you'll find 100 brand names over there, company names over there. It has to be one. It has to be Indorama.
Once you get Indorama and you get one mindset, they will have to tag the line. They would have to follow what the IVL way of doing business is. Cost-consciously, innovatively, and smartl
It's a people, it's a people's thing. Our assets are good. The last point that Chris made is that we have great products, but we have the bad cost base. We should move those good products to the good cost base, and that will happen. Very short. It's people and the cost base. Our products are good.
Thank you.
There was a question here.
Okay.
Yeah, please go ahead.
Yes. Sorry, I very new to this industry. The things I feel very impressed is that the company is doing very well during the world, the period of volatilities. The thing that I would like to understand is that how IVL manage the cost of raw material. I mean, for the hedging, because the raw material should be very volatile during the past 2 or 3 years. How IVL manage to be very profitable and also very stand out compared to the other petrochemical companies?
Let me answer that. D.K. will give you a better answer than me. As a simple answer, the polyester business is a spot business. You buy raw material at the same month that you sell the finished goods. Whatever is that volatility, we should be only managing the margin. When we do a poor inventory exposure job, then we lose or gain money. With digitalization, with exposure management, we would do a better exposure management. So it's not that complicated on hedging, if you keep it simple and stupid. You know, when I started in 1999, I took some money from a private equity company. This American lady came and said, "Oh, you run your business as a KISS." I was so naive, I didn't understand what is KISS.
She said, "It's keep it simple and stupid or stupid and simple." That's how you do exposure management, not get into derivatives. I don't want any derivatives. I don't want any big hedges. We want to run a simple business, and polyester is a commodity. It supplies every day, and so is your sales. We do have some locked-in margins in the U.S., but now in Europe we are all on spot. In Asia, we have always been on spot. D.K.
Additionally
It's a good question, how do you do the commodity risk management? as Mr. Lohia was explaining, all of our businesses basically like significant part is the pass-through of the cost, you know, on the raw material. We don't sell a fixed price in the long term and don't hedge it, you know? You have a big backup hedging if you do that. The only inventories, which are the dead inventories, basically translate into inventory gain and losses. Energy has been volatile, we systematically introduce an energy hedging process that before the end of the year we are 50% hedged. In 2022 we unlocked about $85 million-$89 million. In 2023, the market has gone down. Today we have a $185 million gain, net of mark-to-market loss of $50 million.
It's like a continuous hedging on the conversion cost. This is only conversion cost. I'm not hedging gas for ethane, that what I'm using for the cracker. Robust risk management is very important. Currency are also very volatile. We make sure that the current assets, current liabilities are hedged, and you don't see any of the big FX losses because that's how we keep the hedge. Risk management is robust. We continue to improve on it with digitalization. I hope that answered your question.
It's exposure management.
Exposure management.
Keep it simple and stupid.
Don't get too complicated.
Thank you. There's a question here while we get from the floor. I'll just read it out. We took some impairments and is there any other impairments we are expecting to come? That's a question from the floor.
Well, we took a very holistic view of all our assets, as you saw. We took that what are not sustainable earning. You know, we reduced the manpower in Europe, about two assets. This is shrinking the footprint, about 250. I talked to you about the CPET, and we had a fantastic return on capital employed, but we look at a sigma of every asset. We look at return on capital employed of each asset, and that's why we decided to impair one of the PTA asset because it's better to buy than make it, because it's old technology, and the high cost is creating negative cash flow. The question is there any more impairment likely to be?
We don't think that there is likely to be any impairment because we have very critically looked at all our assets across the sites. I mean, that would be the answer. Yeah.
Let me give you even more detailed answer on that. There are a couple of other businesses that we could say should be impaired. You know, we have a gas cracker in Louisiana, which has cost us a lot of money and not yet yielding any substantial returns. That was a subject of discussion. When we spoke about ethylene, we spoke about MEG. That cracker leads into our downstream businesses. Because of that cracker, we make MEG. Because of that MEG cracker, we make EO, and then we make EO derivatives. I think there was a slide over here that showed 53% ethylene integration. We looked at it, saw what are the issues, discussed with our IOD management, and we all agreed that, no, this is a strategic asset.
It's not making money because of whatever past issues there were. We have fixed them. That site just recently got the best safety award as well. There are certain decisions that we have to make as a long-term company, and that is what I'd like to share with you. That we did look at everything. We said that we are not going to come back in a year's time and say we are going to impair anything new. Whatever we need to impair for the next three year for this business plan, let's do it. That's where we are. There are certain assets in PET, there are certain assets in fibers that also need a close watch, and the management has been alerted to deal with it.
Thank you. There's one more question on the Corpus Christi, and also there's a question around, the outlook in 2023, specifically to the PET. These two questions are also from the floor. Corpus Christi and PET outlook.
Corpus Christi, as I said, is the most largest and integrated plant in the U.S. It has a capacity of 1.2 million tons. You know, one-third, one-third, one-third is a manufacturing JV by the three partners, Far Eastern, Alpek and us. This is a state-of-art technology, very cost competitive plant. The output of this will primarily replace the imports which are coming in, United States today, about 1.1 million ton. 50%, 60% of these imports are being brought in by these three partners actually to gather, grab the market share. Far Eastern brings from Taiwan, Far Eastern brings from Vietnam, we take it from Egypt, some of the volume, and Alpek brings from Oman, what Mr. Lohia was talking about. It's a very state-of-art plant. The project cost, which we have talked about, is under control.
We have actually released one of the most important technical person from us to this JV. We are very excited. I told you this is located in the Gulf Coast. Paraxylene is produced by Flint Hills Resources, comes by pipeline. MEG is also very cost efficient because it's the co-located by ExxonMobil and SABIC joint venture. In Gulf there is a lot of MEG production. Coming to outlook of 2023, I think, what we have presented here, particularly from the PET side, we have taken a lower spreads, integrated spreads from the.
No, no. Let me say the outlook. Sorry. I've explained to you already how we look at the business plan. We're looking at the business plan as a three-year business plan. 223 is just one of those years in that three years. It's a transition year for us. We know we made this business plan with a very poor quarter four. The destocking really hurt in quarter four. Is the destocking over? I don't believe it is. It'll continue into at least first quarter. What will happen with the China opening up? That is a trillion-dollar question. With the China reopening, when China only grew 3% last year compared to 8% in 2021, obviously 3% is half of their desired rate. If they grow at now.
6%+, it will be 6%+, if. It could be 4%. If they grow at 6%+, there'll be a huge demand restocking in China and internationally. It's a factor that is very difficult to predict. Like we never predicted these earnings in 2022. I wouldn't want to make a judgment on what 2023 exactly will be. I understand. As investors, you want to choose a best moment to invest in IVL. I think looking at our current share price and where it is, I don't know how long you want to wait. I would not wait. That's all I would say.
Thank you. I don't see any more questions here online. From the floor, is there any more questions you want to ask?
Thank you so much for spending this entire morning with us. I'm sure there's still some drinks and food outside, so please do join us. Refresh. Thank you again.
Thank you very much.
Thank you.
Thank you for attending.