...Thank you very much for joining us today despite your busy schedule. On behalf of Toray Group, I would like to take this opportunity to extend my gratitude toward your continued understanding and your interest in our management and business activities. Before I start our first management briefing, I would like to say a few words of greeting. Since its establishment, Toray has voiced its strong belief that the company is a public institution that serves society. Based on an awareness of chemistry-based manufacturing from the time of foundation at the lakeside of Lake Biwa in Shiga Prefecture, we have nurtured a style of management, which entails developing human resources and taking all possible measures to protect the environment. The management style can be considered as sustainability itself, and we inherited the style from our predecessors and passed it from generation to generation.
Amid the drastically changing business environment, Toray will pursue the innovation of the world with our innovative technologies and advanced materials. It is unchanged from the past, and it will never be changed in the future. Together with our employees, we will continue to share Toray's mission since its founding to nurture people while contributing to society and the environment through our business activities, and this in turn will drive corporate and human development. We will do our utmost toward a truly sustainable company. In proceeding with the five basic strategies set under medium-term management program, Project AP-G 2025, we have decided management challenges and key management measures to further improve the effectiveness of workplace competency, which is Toray's strength. Now, we are proactively working on them. Today, I hope you will gain understanding of these measures we are promoting as management and the growth potential of our business.
Please turn to page two. These are the five strategies set under AP-G 2025. Driven by sustainability innovation and digital innovation businesses, five basic strategies and financial strategies have been set to achieve sound, sustainable growth. Five basic strategies consist of two themes: seizing profit opportunities and strengthening the management foundation, and define management challenges respectively. Since FY 2023, we have conducted the business operations according to these business strategies. Moreover, as the business environment has changed and become more difficult than we'd expected since the time when we developed AP-G 2025, we have incorporated the identified issues into specific management measures and challenges in many fields to increase effectiveness. I believe there are three issues in terms of achieving Toray's vision. First, securing resources for future growth.
In order to do so, following steps are needed: number 1, generation of cash by improvement of profitability in the short term. Number 2, allocation of management resources, such as cash and human resources, to priority strategic businesses in the medium term. Number 3, realization of benefits from capital investments and R&D. By going through these steps, I believe we are able to become a profitable company. Second, as the business environment surrounding our company is changing significantly on a global scale, we must respond with a sense of speed, transcending organizational barriers. Third, it also overlaps with the changes in the business environment. It is obvious that competition with Chinese and other companies, et cetera, will be more intense than ever in many of our businesses. So enhancement of competitiveness must be a field of individual business strategies to compete with competitors.
Therefore, for the management foundations that must be strengthened in accordance with the five basic strategies of AP-G 2025, we have decided to enhance effectiveness by establishing priority management measures with a timeframe throughout our businesses and setting specific management challenges. The figure shown in the lower half of the slide describes the management foundations that should be strengthened and the timeframe for the specific measures and the challenges. From the group-wide perspective, we will write a story of growth based on competitiveness, utilize ROIC, reallocate resources, and create innovation. In addition, the specific issues and measures shown in the slide include ones that were developed based on a reflection that investments for growth and expansion we have made in the past have not necessarily led to increase in profit, leading to low KPIs for efficiency. On page 4, I'll introduce a summary of key management measures and challenges.
We have organized and developed 7 key management measures as follows, and 18 challenges related to the measures. 1, enhancement of business competitiveness and business expansion. 2, optimal allocation of forces and invested capital. 3, creation of innovation. 4, function-centric enhancement. 5, enhancement of cost competitiveness. 6, human capital management, and 7, dialogue with capital market. In addition, we have assigned the members of the board as persons in charge of execution to increase effectiveness. There are some measures that I am responsible for promoting. As indicated by bidirectional arrows, these management measures and challenges are related to each other and develop synergistic effects. Meanwhile, in the past, challenges and targets were developed and executed in each business. Now we proceed them as company-wide measures that are considered a higher level concept, aiming to further penetrate the measures to the entire group.
Now, I would like to explain about the promotion of medium-term management program, Project AP-G 2025. On page six, I would like you to understand the growth potential of each segment and current strengths and weaknesses of businesses in the segments. The left table shows the revenue growth rates for 10 years and ROIC in 2023, as well as the revenue growth rates and ROIC in 2025, targeted under AP-G 2025. The growth rate of the fibers and textiles is upper half of the 2% range, but its ROIC is constant at a relatively high level between 6%-7%. With around JPY 1 trillion in revenue, this segment is an important business foundation, whose stable revenue supports proactive investment of other segments. As for the performance chemicals segment, we have made investments considering this as growth and expansion business area.
But its current growth rate and ROIC is at a low level, as it is currently impacted by inventory adjustment of semiconductor and display-related products. However, since the investment has already been completed, with the increase in utilization rate, significant improvement in ROIC is expected in the AP-G 2025 period. The carbon fiber composite materials segment is the number one growth business, both in the past and future. Although large amount of investment has been made, ROIC is low due to the low utilization rate. However, as some applications have a high profitability, we believe that profitability for this segment can be improved through application-specific growth strategies. The environment and engineering segment has steadily expanded, mainly by reverse osmosis or RO water treatment membranes. Water treatment membranes have a high profitability, and steady expansion is expected during the AP-G 2025 period.
The life science segment is currently at an incubation stage. Significant expansion is not expected during AP-G 2025 period, but we can expect expansion in the medium and long term. The table in the left side shows overall state, and right side shows the business fields that needs improvement and representative core growth business fields in each segment. By implementing measures for improvement in each business field, as management, we are making improvement efforts for the entire group. On page 7, I would like to explain about the business structure reform based on the 4 categories of growth potential and profitability as a measure to improve each business field. The figure in the bottom right is the 4 categories of growth potential and profitability. The pink business fields in the left half of the figure are the low profitability businesses.
Not only do we promote business structure reform for low growth and low profitability businesses for such business fields, but we also implement the project to improve profits of specified businesses and companies, Darwin Project, abbreviated as D-Pro, for specific businesses and companies with large capital investment. The light blue business fields in the right half and upper left are those expected to be highly profitable. From these businesses, we prioritize allocation of funds and personnel to competitive businesses as seeds for the future growth. For low growth and low profitability businesses, we have set the rules on studying withdrawal and/or downsizing. These businesses that apply to these rules will be on the table for consideration. Also, in addition to businesses that fall under the Darwin Projects, we will consider downsizing assets that do not contribute to the growth of the businesses.
Page eight shows the summary of the designated businesses or company profitability improvement project, as known as Darwin Project. The designated businesses or companies are seven, that are listed in the table. Their profitability has significantly worsened as the business situation has drastically changed since the time when AP-G 2025 was developed. Based on thorough understanding of the current situation and analysis, we identified the challenges, and now we are implementing measures for the short term and medium term, respectively. As can be seen from the basis of the project name, we'll be adaptable to changes well and proceed them restoring profitability with the project organization, which is led by myself. Page nine summarizes the achievements of the business structure reform and next steps. Toray's large tow carbon fiber business posted impairment losses of JPY 90.2 billion as a result of business structure reform.
Going forward, we will work on reduction of fixed costs and utility costs. Furthermore, since demand for wind turbine blade application is on a recovery trend, the Mexico plant is expected to reach full operation in the fourth quarter of FY 2024. In the PET Films business, we implemented retirement of production lines that are not expected to be utilized in the future. We work to restore profitability in FY 2024 by promoting sales expansion and strategic pricing, in addition to further cost reduction. In the PP Spunbond business, we aim to restore profitability in FY 2024 by proceeding with additional countermeasures, such as reviewing production capacity and pursuing further cost reductions. TPM has already restored profitability, and we aim for further improvement in corporate income by promoting high added value creation.
Page ten shows the image of growth businesses in the four categories of growth potential and profitability, and a brief description of strategies for growth. Our policies are described in the right side. We will promote optimal business strategies for businesses with high competitiveness in the market. We will promote the Toray-style ROIC improvements that increase profits and expand businesses while maintaining financial soundness. For example, businesses with high growth potential but requiring large initial investments, such as carbon fiber, can improve profitability through differentiation. Meanwhile, businesses that are stable but not so high in growth potential, such as Toray's unique integrated business from fiber and textiles to garments, will be expanded while maintaining high profitability rate through asset-light strategy. Market environment of each business and competitiveness of Toray's products depends on the applications and regions.
Promoting application and regional strategies tailored to each characteristics, we will improve Toray's overall ROIC and realize sustainable growth and expansion. From page 11 and after, as examples of business expansion for our growth business fields, I would like to explain about business strategies for 3 businesses. First, the carbon fiber composite materials business. As mentioned in the upper left, in the carbon fiber composite materials business, applications that are expected to expand in demand from 2026 onward include new applications such as urban air mobility, or UAM, next-generation aircraft, and space related, in addition to the ones that already have been planned under the AP-G 2025, such as hydrogen tank and offshore wind power applications. The graph in the bottom left is the global demand by application during the AP-G 2025 period.
In FY 2023, the growth in demand was slow, stemming from demand decrease in sports application due to effects of the end of the special demand caused by COVID-19, temporary demand decrease in wind turbine blade, and inventory adjustment of pressure vessels, et cetera. However, we expect a double-digit growth again toward 2025. Given the business environment, as described in the right, the basic policy for the carbon fiber composite materials business is contribution to the society by providing high-quality products essential to the realization of carbon neutral society. This directly links to our corporate philosophy. In addition, in order to address this basic policy, we aim for business expansion by enhancement of production capacities in our global production sites. The graph in the bottom right is trend of the production capacity. Currently, we have 64,000 tons in total of production capacity, including regular and large tow.
It is still world's number one plant capacity, although production capacity expansion of Chinese manufacturers is expected in the future. As you may already be aware, in the U.S., South Korea, and France, new machines will start production in the second half of FY 2025. Page 12 shows strategies for applications and products of the carbon fiber composite materials segment. As for the aircraft applications, which is our pillar of profit, we will expand the business by utilizing our strengths, such as product development, by combining high-strength carbon fiber and thermoset or thermoplastic prepregs, as well as development capacity from carbon fiber to prepreg and composites. As for the industrial applications, significant growth is expected, mainly in the pressure vessels. We will commit to this application as the leading company of carbon fiber.
However, as competition with Chinese and Korean companies is expected to intensify, we will secure profit by developing differentiated products and pursuing sole cost reduction. In addition to the aircraft applications, we recognize the importance of establishing a profitable business structure for industrial applications, for which demand is strong. Another item I would like to explain about industrial application is large tow, which is produced at Zoltek. In FY 2023, as revenue and operating income significantly decreased due to a temporary demand decrease in wind turbine blade applications, we have worked on improvements through the Darwin projects I have already explained. Full-fledged recovery of demand for wind turbine blade is expected from 2025 onward, but steady recovery is also expected to begin from the second half of 2024.... We will be sure to capture demand from this recovery.
The production bases of Zoltek are located in Mexico and Hungary, and we suppose that cost competitiveness of products from the Mexico plant can compete with Chinese products. Leveraging this competitiveness will expand global operation, as well as promote cost reductions per unit of utility costs, et cetera. For customers in the U.S. and Europe, we will develop and promote high-quality grade for offshore wind power generation and long wind turbine blades. Moreover, we'll develop new industrial applications other than wind turbine blade applications. Next, I will explain about the regional strategies of the carbon fiber composite materials business. I believe that one of the strengths of this business is having production bases in major areas such as Europe, Americas, including Mexico, and Asia, including China, Korea, and Japan.
Due to the characteristics of carbon fiber composite materials, each application is closely related to the economic security and energy policy in each country, and the purchasing strategies of major customers. For this reason, I believe that local production and consumption system will be further needed, and more entry barriers will be erected for each country. In order to maximize profit, we will promote production at the consumer regions to supply products for customers in each region and application, complement the overcapacity and undercapacity of production between regions by global operation, which leverages on cost competitiveness, such as large tow in Mexico and prepreg in China, and combine production at suitable regions to operate efficiently our facilities. On page 14, I would like to explain the business expansion strategies for fibers and textile business by supply chain management.
The strengths of our fibers and textiles business is establishment of a highly profitable business with an asset-light strategy, integrated supply chain by strategic use of OEM, with a background of Toray's technologies and development of capabilities. The left side of the slide is a zoning image between Toray's manufacturing field and OEM field. We have expanded profitability in the entire supply chain by providing optimal solutions to customer needs at each stage, from filaments and staple fibers to garments. Supply chains in Japan and China have already been established, and as shown in the right side, we will expand the high added-value business to Asia and India. Specifically, we have established a knit production base of PTHL in Vietnam and textile production base of TTT in Thailand. In India, we'll develop business by taking an asset-light strategy through an alliance with leading local partners.
Moreover, in automobile applications and environment fields in industrial applications, we aim to improve profitability by providing our advanced materials and enhancing initiatives to connect value chains. On page 15, I will explain about the water treatment business development. In the water treatment business, we are working on business expansion as planned in AP-G 2025. In addition to expansion of seawater desalination applications, which is de facto standard in the industry, we will develop new applications which make the most of the characteristics and functions of membranes, including wastewater reuse and ultrapure water for semiconductors. On page 16, I would like to explain about the strategic pricing, which is promoted under one of the five basic strategies, ultimate value creation. In addition to product excellence, our competitiveness originates from the added value provided by our supply and operational capacities.
Thus, we promote strategic pricing to understand accurately Toray's product excellence and added value, and ensure that we secure appropriate compensations commensurate with value. For instance, as shown in the left, in order to improve workplace competency on pricing, we provide a new training program on pricing-related data analysis for sales personnel. In addition, aiming to improve organizational capacity, we implement workplace education such as sharing the best practices internally and externally, and knowledge provided by outside specialists. Also, an improvement in the awareness for implementing value-based pricing, such that if the product value is insufficient, new development and proposal of high added-value products will be promoted through collaboration between production, sales, and R&D automatically. In order to realize this, as shown in the middle, we are working on establishing data infrastructure to support the implementation.
For example, a digital tool was developed for several divisions to visualize pricing variations for the same product. As a result, we can quickly respond to issues in transactions. Furthermore, as shown in the right, we have developed mechanisms to manage implementation and implement cross-company follow-up. Through trainings and visualization, internal improvement in awareness is steadily proceeding, and initiatives are now implemented company-wide rather than by individual sales divisions. As a result, the effect is expanding. Page 17 explains strengthening the procurement function, which is promoted as one of the key management measures. In the five basic strategies of AP-G 2025, it is positioned in enhancement of cost competitiveness.
As the headquarters, Toray's Purchasing and Logistics Division consolidates purchasing strategies and cost reduction measures that were previously implemented at each business base and region, and shares best practices of each business base and local information with group companies in order to reduce variable costs. Meanwhile, we'll strengthen internal collaboration at the head office and develop products with diversified raw material sources by engineering technologies, and expand those products to the group to strengthen global BCP and accelerate proportional cost reductions. Page 18 describes cost competitiveness. This slide was disclosed on May thirteenth. In AP-G 2025, we will promote cross-organizational cost reduction that leverage the collective strengths of the organization, and by sharing the information and implementing the cost reduction activities globally, we will work on raising the level of cost competitiveness of the Toray Group as a whole.
We aim for JPY 200 billion of cost reduction in three years through self-efforts. In FY 2023, we achieved cost reduction of JPY 71.1 billion. Please turn to page 19. This slide was also disclosed on May 13. To accelerate capital efficiency improvement, in order to achieve the targets under AP-G 2025, we have decided to reduce cross-shareholdings by half. Specifically, we will reduce 50%, about JPY 100 billion, in three years from FY 2024 to 2026. All the proceeds from sales of cross-shareholdings will be used for share buybacks. Next, page 20 is about capital allocation. As an addition to the capital allocation under AP-G 2025, we will reduce cross-shareholdings and implement share buybacks with proceeds from the sales.
There's no change in the targets under AP-G 2025, positive free cash flow in 3-year total and a DE ratio of 0.7 or lower. This slide shows what we expect as the effect of the business strategies and measures that I explained today, specifically the difference in quantity and fixed costs. There's no change in our 3-year targets explained in the IR day in last June, an increase of JPY 64 billion in difference in quantity, and an increase of JPY 20 billion in net change in price. However, we recognize that the harsh business condition will continue due to the slow economic and market recovery.
We'll promote business expansion, revising measures for raising profit as needed, such as changing strategies for each business in line with the business environment and strengthening of procurement functions, while at the same time promote measures such as recycling as part of the initiatives to realize our circular economy. Page 22 summarizes the progress of the financial targets. Page 23 and after are reference materials. In one of the basic strategies of AP-G 2025, sustainable growth based on the Toray Group sustainability vision, we have positioned the sustainability innovation, or SI business, and the digital innovation, or DI business, as growth business fields for Toray Group, where we can leverage our strengths and expand revenue growth.
In FY 2023, revenue from SI businesses increased 2.2% compared to the previous fiscal year to JPY 1,311.5 billion, as carbon fiber for aircraft applications and the water treatment business was strong, although the large tow carbon fiber for wind turbine blade was impacted by the slow demand. Meanwhile, although release film for semiconductor molding and other products were slow, revenue from DI business in FY 2023 increased 9% compared to the previous fiscal year to JPY 181.3 billion, due to the strong sales of FPD-related manufacturing equipment, as well as electronic coating materials for OLED. Page 26 summarizes topics of the SI and DI businesses. In the SI business, demonstration for realization of a hydrogen society is ongoing in Yamanashi Prefecture.
On-site construction to build a large-scale power-to-gas, or P2G, system has begun at a beverage plant in the prefecture. Furthermore, Toray has received a reverse osmosis, or RO, membrane order for a desalination plant in the Kingdom of Saudi Arabia. In addition, Toray launched Toray APOA-II-iTQ in Japan. This in vitro kit aids with pancreatic cancer diagnostics. In the DI business, due to the increase in adoption of OLED displays for smartphones and TVs, as well as increase in demand for power semiconductors, the company is increasing production capacity of photosensitive polyimide. Moreover, the company is working on expanding environmentally friendly product lineup. Page 27 shows topics featured in the recent news releases or articles in the media. We have announced that development and launch of high tensile strength carbon fiber and PFAS-free water-repellent textile through news releases.
Moreover, lithium recovery technology using separation membrane was covered widely in The Nikkei. Lastly, this slide is a summary of the sustainability targets and progress through promotion of these SI businesses and our efforts to reduce GHG emission. In addition to our financial targets, we are committed to achieving these targets in terms of sustainability. This concludes my presentation. Thank you very much!