My name is Katayose. I am in charge of the chemical business. Thank you very much for taking time out of your busy schedules today to attend this growth strategy briefing of Kao's chemical business. I'd like to explain Kao's chemical business in detail so that you can deepen your understanding of our business. First, I will give an overview of our chemical business, followed by an introduction to our growth strategy and some specific actions for implementing the strategy. After the presentation, I'd like to receive your feedback in an exchange of views in a Q&A session and reflect them in our management going forward. These are the three topics I will be explaining today. First, the positioning of the chemical business within the Kao Group. Kao has five business units, and in 2022, the chemical business accounted for 23% of sales and 27% of profits.
We offer a wide variety of industrial products globally while meeting the diverse needs of broad range of industries. These include chemicals made from natural fats and oils, as well as surfactants, fat and oil derivatives, high functional polymers, fragrance that use oleochemicals as ingredients. At this point, I'd like to explain Kao's approach to value creation. By combining fundamental technology research that elucidates the mechanisms of substances and phenomenon and product development research that commercializes technology, we are working to create innovative materials and products that are world-class. Centering around our core technology, precise interface control technology, we can combine a wide variety of technological assets to create unique products and services that grasp the needs of society, consumers, and the industries. Kao is unique in that we share and maximize the use of these fundamental technologies in both our consumer products and chemical businesses.
In the chemical business, we have the vision of creating a future of Kirei for people, society, and the planet through the power of chemistry. We aim to provide value indispensable for creating the future of industry and a sustainable society, and to become a clear choice of customers, the market, and society. Through co-creation of integrating Kao's various strengths with those of our customers and partners, we will create new value that solves environmental and social issues, and by refining our eco-chemical products and offering new eco-chemical solutions, we will create value for our customers, industries, and society working on decarbonization and a shift to a circular economy. This slide shows the industrial fields covered by our chemical business. As you can see, we are operating in a very wide range of industrial fields.
We provide distinctive materials and products to this wide range of industrial fields through three main businesses. The first is the oleochemicals business, which provides oleochemical products made from palm, coconut, and others, as well as fragrances and food additives. We supply mainly to other consumer product manufacturers, the wider chemical industry, agriculture and livestock industry, and the processed food industry. In particular, we have the top position globally for fatty alcohols and tertiary amines. In addition to our technical strengths, our global supply system and ability to apply a wide range of oleochemical components are our strengths. The second is the performance chemical business, which creates various types of capabilities using interface science, including concrete chemicals, plastic additives, casting chemicals, and iron and steel cleaning agents. We supply to a wide range of industries, including the construction materials, plastics, casting, and steel industries.
Many of our product groups are number one in Asia. In addition to our technological strengths, our global network of sites and many products utilizing our own oleochemicals are our strength. The third is the information material business, including toners, toner binders, and hard disk chemicals, offering next-generation value through close customer collaboration. Main destination includes copier and printer manufacturers and electronic component manufacturers. We have the top global position in toner binder and hard disk chemicals. Our core strengths include polymer molecule design, nano-pigment dispersion, and interface control technologies, as well as analysis and evaluation capabilities, and a global supply system. The sales breakdown by business in 2022 is shown here. Here are representative examples of major materials and products in the three businesses I have discussed. We supply materials and products that are leading the markets both worldwide and in Japan.
Tertiary amines in particular are raw materials for products used in disinfectants, personal care products, dishwashing detergents, and oil fields. Kao is the number one manufacturer of tertiary amines with strength in its coverage of the total supply chain from raw materials, unique technologies in catalysts and processes, and a broad product lineup. In Q3 of this year, we will start operation of an additional facility in Germany. In 2025, we'll start up and begin production at a new facility in the United States. We are working to strengthen our position by reinforcing our global supply system. We will also add facilities in Spain for MBJ jasmine fragrance, a synthetic fragrance used in toiletries and perfumes. Starting in Q3 of this year, we will strengthen our stable supply system in Europe, the largest market, to further solidify our position there.
This slide shows the growth history of our chemical business to date. We have achieved business growth by creating unique product lines with proprietary technologies and, at the same time, expanding our business overseas. In 2022, we had sales of JPY 402.5 billion and JPY 29.5 billion operating income. The bottom figure is a ratio of overseas sales to total sales, which rose to 65% in 2022. In Europe and the U.S., we have been expanding through repeated acquisitions, while in Asia, we have growth mainly centered around capital investments. On the other hand, we have also restructured, withdrawing from unprofitable businesses in the past. Recently, we stopped Japanese production of fatty acids, one of the fat and oil derivatives, switched to supply from a joint venture in Indonesia and integrating two plants in China.
The chemical industry, which is a foundational industry for a wide range of industries, is cyclical and impacted by economic conditions. Kao's chemical business is no exception. We have been working to minimize such impact by expanding our unique niche and customized products and by further strengthening our fat and oil derivative products. As a result, the business has been growing steadily over the medium to long term. This slide shows the global chemical business bases. As of the end of 2022, we have 26 subsidiaries and approximately 4,000 employees. The pie chart on the right side shows the percentage of sales by region in 2022. Japan accounted for about 35%, Asia about 25%, and Europe and the Americas about 40%. Profits are also spread out almost evenly, with Japan, Asia, and Europe and the Americas all generating profits in the ratios shown here.
Up to here, I have given you the overview of the chemical business. Next, I'd like to talk about our growth strategy. First, I'd like to touch on the strengths of Kao's chemical business. We believe these are our three major strengths. First is our niche products developed with unique technology that generate added value and market-leading products with high market share. Second is our ability to deploy solutions in a wide range of industrial fields and business foundation that enables global growth. The third is a synergy with the consumer products business. In particular, we believe that the expansion of niche product groups that generate high value added and market-leading product groups with high market shares is one of the reasons we have been able to maintain a profit margin of 8%-10% to date.
Synergies with the consumer business that other companies do not have include maximum use of research assets, sharing of production equipment, raw materials, and sites, and sharing of technology and knowledge between the two businesses. For example, technology and knowledge reinforced with industrial customers are utilized in the consumer products, and technology and knowledge accumulated in the consumer products business are utilized in the chemical business. Skin-friendly detergent base developed in Germany being used for Bioré and biodegradable fabric softener base developed in Spain being used for Humming are examples of how the technologies and knowledge refined in the chemical business are used in the consumer products business. The five business strategies are shown here. We will continue to expand our business globally and strengthen our collaboration and cooperation.
Also, in addition to strengthening the foundation that has supported our growth to date, we are also working to develop new products and solutions in areas that have high environmental and social value and where we can leverage Kao's strength. I will explain the details in the pages to follow. First, the social issues that the chemical business focuses on. There are a variety of issues surrounding society. In particular, there are five areas in which we believe the chemical business can contribute to their resolution and provide business opportunities. These are climate change and loss of biodiversity, heightened interest in agricultural issues, pandemics and infectious diseases in livestock, aging infrastructure in developed countries, and the upgrading and expansion of use of digital technology. This slide shows the business areas just described, positioned as strategic and new businesses to achieve business growth.
In existing businesses, we will focus on strong businesses to generate solid profits, use that to expand strategic businesses that will form the next profit-making business, then develop new businesses to become a new stage for future growth. In the hygiene business, we utilize our extensive in-house expertise in disinfection and washing. In the agricultural chemicals business, we work to contribute to making agricultural production possible with less agrochemicals, increasing food production and saving labor. In the roads and mobility business, we work to improve the durability and improve the work environment, which are required by aging infrastructure and urbanization in emerging countries. In the digital solutions business, we provide the solutions to respond to the increasing sophistication and use of digital technology.
Typical examples of new businesses we are focusing on to create a new stage are hydrophobic modified cellulose nanofiber compounds, a new functional material, and product lines that utilize Kao's accumulated biotechnology expertise. Cellulose nanofiber compounds are expected to significantly improve the performance of next-generation electronic and structural materials. Biotech products include bioalcohols that aim to replace palm, aromatic chemicals such as gallic acid, sugars that are raw materials for biochemical products such as bioethanol, saccharification enzymes for producing these sugars, and other products utilizing technologies accumulated over the years. This slide summarizes the numerical targets of the midterm plan. As for KPIs, our key focus is to expand profits while maintaining ROIC of 10% or more. We aim to achieve ROIC of 12% or more in the future.
Towards 2025, we aim to increase operating income by increasing the ratio of strategic and new businesses, which target a profit margin of 15%. Currently, these strategic and new businesses contribute about 9% of sales, but we plan to increase their contribution to 15% by 2025 so that they generate about 1/4 of our profits. The pie chart below shows how much we will grow strategic and new businesses in each of the three segments. In any case, we believe that we can continue to expand our earnings by expanding our niche, highly profitable product lines and solutions with distinctive technologies. Next, I would like to touch on the progress of K25. In 2022, the second year of K25, we have achieved three things.
One, sales increased, due in part to the contribution from selling price adjustments in mainly oleochemicals outside Japan, in line with the raw material price hikes for fats and oils. Two, although operating income remained at the same level as the previous year due to the impact of inventory write-downs caused by fluctuations in the oil and fat market, EBITDA, which indicates total cash generation, increased by JPY 1.1 billion. Three, overseas sales expanded solidly, and we continued product development from a sustainability point of view. In the area of sustainability-oriented product development, last year, we invested in two venture companies in the agro and palm alternative materials business. In 2022, the unit sales price has increased in line with the rise in raw material prices, which led to profit margin decline.
The chemical business is affected by the factors shown here: global economic trends, market conditions for fats, oils, and petrochemicals, regulations on chemical substances, and other factors. We consider it a major challenge to transform ourselves into a business entity that can minimize the impact of these factors. To this end, we are working to transform ourselves into a high value-add business entity by strengthening the three initiatives described here, in line with the midterm plan and growth strategy I explained earlier. Now, I would like to introduce some specific initiatives in our strategic businesses to transform ourselves into a high value-add business entity. First is an adjuvant for pesticides in agriculture. These products can promote the permeation of agricultural chemicals into leaves and improve fertility, thereby bringing out the full potential of agrochemicals and enabling a reduction in their use.
The market size is estimated at JPY 100 billion, a market that is growing at more than 6%. Kao is a pioneer in Japan with a track record of more than 50 years, providing distinctive products based on its accumulated technological knowledge. Furthermore, Kao has succeeded in developing a technology to solve the problem of spray solution drift in drone spraying, which is expected to contribute to smart agriculture, expanding the potential for business growth. Overseas, we have begun deliveries through the establishment of a collaborative framework and sales network.
As it may be difficult to understand in words or illustrations, we will introduce our products developed for drone spraying in this video. The key point is the precise interface control technology that retains the moisture in the droplets after spraying and ensures the agrochemical is delivered to the leaf surface. In the video on the left, you can see how the adjuvant prevents the drying of water droplets on the glass surface, and in the video on the right, you can see how the drone spraying can be done without drifting by crosswinds. A disease that causes withering when infected is currently a major problem on palm plantations.
In addition to developing an adjuvant for fungicides that is effective against this disease, we are also taking on the challenge of solving this problem through a business alliance with Polar Star Space, a company that excels in technology for monitoring disease by aerial images. Palm plantations have very high expectations for the solution. The graph on the bottom right is an image of adjuvant sales. Next is a highly durable asphalt modifier. Kao has successfully developed a product that improves the durability of asphalt paving by chemical reaction of waste PET. We can say that we have realized upcycling of waste plastic. Currently, synthetic rubber and cellulose are used as asphalt modifiers. The modifier developed by Kao can replace some of these materials, and we believe that we can create a new market by creating new value.
Asphalt pavement is a market that is growing at 5% per year globally. Here too, we will introduce the evaluation results of wear reduction effect and durability improvement effect in a laboratory through video clips. Two test pieces, one with modifier added on the left and one without, are soaked in warm water at 60 degrees Centigrade, and wheels under a load equivalent to a 30-ton vehicle was rolled back and forth on them to compare the degree of asphalt wear and deformation resistance. The results show that the amount of wear debris in the warm water is reduced to 1/5, and the deformation of the asphalt is also suppressed. This technology is based on the polyester molecular design technology cultivated in the toner business. Currently, our track record in Japan is expanding, and we are also stepping up promotional activity overseas.
However, since this work involves a creation of new markets, full-scale expansion may take some time. We will steadily uncover potential needs in the paving market, and in addition to building a track record in Japan, we will expand to overseas markets and increase adoption in public roads in addition to private properties. Furthermore, we will expand our technology to utilize not only waste PET bottles, but also industrial waste films and waste fishing nets. The sales image is shown at the bottom right. As a final example of strategic businesses, let me introduce to you two digital-related solutions. First is the inkjet ink business, which contributes to the digitalization of analog printing and the reduction of the printing industry's environmental impact.
In a market that is growing at an annual rate of 8%, we specialize in the fields of commercial printing, label printing, and package printing, and are developing our business on the strength of our ability to develop high-reliability, customized inks and to respond to customers in three global regions. We are continuing to expand the use of our products in flagship devices of the top printer companies. We are also aiming to expand our business by strengthening our solutions, such as the development of not only ink, but also printing modules, through collaboration with our partners. The sales image is shown here. Second is the semiconductor chemicals business, which contributes to the higher performance semiconductors by achieving high cleaning performance and low environmental impact. Semiconductor-related agents are also a market that is growing at an annual rate of 8%.
We are building a robust product portfolio by focusing on agents used in various processes, such as cleaning. Another strength of Kao is the proposal of optimal product and cleaning process conditions while utilizing the Fine Cleaning Center. We are focusing on the development of one-of-a-kind chemicals indispensable for 5G and 6G communication standards, and many have been selected for use in next-generation products. Through collaboration with our partners, we will promote the development of chemicals indispensable for next-generation semiconductor processes. Finally, I would like to talk about our decarbonization initiatives in the chemical business. We are reducing our own carbon footprint with a company-wide goal of reducing CO2 emissions by 55% by 2030 compared to 2017 on Scope 1 and 2. We plan to achieve this goal through the use of low-carbon energy and more efficient production processes.
In the chemical business, we implemented RE100 at four plants in China and in Germany, and introduced solar power generation in Wakayama, Thailand, and other existing sites by 2022, and plan to use biomass fuels in Spain, Malaysia, and the Philippines by 2030. In terms of contributing to the decarbonization of society, we will strive to expand our lineup of eco-chemical products, the use of which will lead to a reduction in CO2 emissions. We will focus on proposing low-carbon materials and selling products that contribute to CO2 reduction by helping customers save fuel, energy, and resources, achieve higher durability and longer service life, and improve processes and productivity with plans to increase the ratio of these products from 72% in 2022 to 85% in 2030. Examples of our eco-chemical products are shown here. That is all for the explanation.
Kao's chemical business will contribute to enhance its presence by providing value that is indispensable for the future of industry and the creation of a sustainable society through Kao's unique materials, products, and solutions. We will also grow our business by firmly converting the social and environmental value we create into economic value. All members involved in the business will work as one to fulfill our aspiration to create a future of Kirei for people, society, and the planet through the power of chemistry. Thank you very much for your kind attention.