Thank you for the kind introduction. My name is Tsuji. Thank you very much for visiting the ENEOS Materials Yokkaichi plant today. To begin, I would like to explain what ENEOS Materials is. ENEOS Materials is the operating company in the ENEOS Holdings Group responsible for materials. First, I will briefly introduce who we are as ENEOS Materials. Next, I will share where we are heading. Finally, I will explain the role and positioning of the Yokkaichi plant within ENEOS Materials. Thank you in advance for your attention. Now, let me begin our business briefing. Here is today's agenda. Corporate overview and business activities, ENEOS Materials' strength, market environment and growth opportunities, medium-term and growth strategies, and sustainability strategies. Next slide, please. First, our corporate overview of ENEOS Materials.
ENEOS Materials was established on April 1, 2022, through an absorption-type company split and stock transfer of JSR's elastomer business. In April 2024, we integrated ENEOS' former high-performance material business and formed the current ENEOS Materials. As of April 1, 2025, we have roughly 3,000 employees across the group. In fiscal 2024, our net sales were around JPY 350 billion. This is our global footprint. Our operations are centered in Japan, mainly Yokkaichi, Chiba, Kashima, and Kawasaki within the ENEOS Group. Globally, we also have sites in Asia, Europe, and the U.S. Next slide, please. Let me briefly touch on our history. We started in 1957, when Japan Synthetic Rubber Co., Ltd. was founded as a semi-governmental company. Then we launched Yokkaichi plant in 1960, Chiba plant in 1968, and Kashima plant in 1971.
To meet global demand for fuel-efficient tires, we established S-SBR, solution styrene -butadiene rubber production, in Thailand in 2011 and in Hungary in 2014. In 2022, as I mentioned, ENEOS Materials was launched through a carve-out, and in 2024, we integrated the high-performance materials business. Next slide, please. Now, I will introduce our products and business overview. Our largest business is elastomers, transferred from the former JSR business. We have combined that with ENEOS' high-performance material products. We have a wide range of elastomer products. They include general-purpose synthetic rubbers, special synthetic rubber, thermoplastic elastomers, and emulsion products. On the performance materials side, we offer high-performance monomers and high-performance polymers. From a market perspective, our business is broadly grouped into three areas: tire materials, battery materials, and performance materials. Next slide, please. This is our market position in elastomers.
ENEOS Materials is the number one manufacturer of elastomers in Japan and number four in Asia. We have about 400,000 tons of capacity in Japan and about 500,000 tons across Asia. Next slide, please. The largest business within our portfolio is tire materials. Around 60% of our sales come from tire materials. If we include automotive applications more broadly, roughly 80% of our sales are related to the automotive industry. As I mentioned, we have a global footprint. Our overseas sales ratio is about 56%. We conduct more than half of our business outside of Japan. Now, regarding tire materials, even though we say tires, different elastomers are used in different parts of a tire. Let me briefly explain by component. First, the tread. This is the most important part.
As shown on the right of the diagram, the tread is the contact surface between the tire and the road. This is one of the key areas where tire performance is delivered. In a tread, our materials are used, styrene-butadiene rubber, including S-SBR and E-SBR, BR, isoprene rubber, and petroleum resin. Of course, natural rubber is also used there. On the other hand, the sidewall must flex and deform, so it needs properties such as flex resistance and low heat buildup. For that, materials like polybutadiene rubber are used. There is also the inner liner. The inner liner must prevent air from leaking, so low gas permeability is required. Therefore, butyl rubber is mainly used there. So even within a tire, different materials are selected depending on the function of each part. We are a company that supplies these materials for tires. Next slide, please.
Next, I will briefly explain our battery materials business. As you all know, electric vehicles are rapidly spreading worldwide. Lithium-ion batteries are a critical component of EVs. As shown in the diagram on the right, rubber is used as a binder that holds the active materials together in both the positive and negative electrodes. In particular, we supply materials for the carbon binder used in a negative electrode. This is SBR, styrene-butadiene rubber. That is how we develop our battery materials business. Next slide, please. Next is performance materials. I mentioned that we support automotive applications beyond tires, so where are they used? As you can see in the illustration, for example, the black rubber around door frames and window frames is widely used. Those applications use materials such as EPDM rubber, ethylene propylene rubber, and TPV, a thermoplastic elastomer.
We supply materials for those applications and also for cooling and radiator hoses, where EPDM rubber is used. Meanwhile, for fuel hoses and brake hoses, areas that require superior oil resistance, rubber is also essential. For those, NBR, acrylonitrile -butadiene rubber, with excellent oil resistance is used. Also, EPDM rubber requires an important monomer called ENB, and we produce ENB as well. This is part of our automotive-related business. Next slide, please. Let me briefly mention our non-automotive applications. For example, BR is used for shoe soles. For adhesives, we provide petroleum resins and polybutene. For golf balls, polybutadiene rubber is used in the core. For medical applications, materials such as hydrogenated rubber, DYNARON, as well as polybutene and polyisobutylene are used. Our materials are also used in food trays and in coated paper applications. This is the type of company we are. Next, let me explain our raw materials.
This slide shows which fractions from a naphtha cracker we use. A naphtha cracker, shown in the center, produces various fractions. Compared with lighter olefins like ethylene and propylene, we focus on the heavier C4 fraction. This C4 fraction, four -carbon fraction, is the most important feedstock for ENEOS Materials. From C4, we refine and use monomers such as butadiene and isobutylene. From heavier fractions such as C5 and higher, we obtain materials like isoprene and DCPD ENB. Using these feedstocks, we manufacture elastomers and high-performance polymers. Next slide, please. Now, I would like to talk about our strength. Since our founding in 1957, we began by building a business that produces polymer materials mainly from the C4 fraction. We have continuously deepened our polymer technologies and expanded into various businesses. Most importantly, supplied our customers with high quality and stable mass production.
And we see this as our greatest strength. Leveraging these polymer technologies, we have consistently entered new growth markets. As I mentioned earlier, we have expanded into growth areas by delivering high performance products such as rubber for fuel efficient tires, solution S-SBR, and battery binder for lithium ion batteries. We also believe ENEOS Group synergy is another key strength, and I will explain that on the next slide. There are three points. First, strengthening environmental responsiveness. By working with ENEOS, a major petrochemical manufacturer, we promote carbon neutrality initiatives such as using sustainable materials and reducing greenhouse gas emissions in our processes. Second, enhancing product development capabilities. We combine ENEOS's R&D technologies with ENEOS Materials synthetic rubber technologies to develop new materials. Third, securing stable supplies of raw materials and reducing costs by leveraging abundant petrochemical raw materials produced at ENEOS petroleum refineries.
We can ensure stable supply and achieve cost reductions. From the next slide, I will explain the market environment and growth opportunities. First, I will talk about solution S-SBR for fuel efficient tires. As you know, decarbonization requirements are strengthening across countries, and as a result, demand for fuel efficiency is rising. In particular, Europe has strict CO2 emissions regulations. In line with the European Commission's targets shown in the graph on the lower left, CO2 emissions are expected to be reduced over time. Reducing CO2 emissions, in other words, means improving vehicle fuel efficiency. To improve fuel efficiency, it is essential to reduce tire rolling resistance. The most challenging and the largest contributor is the tread, as I mentioned earlier. The tread accounts for roughly half of a tire's contribution to fuel economy.
To reduce CO2 emissions, that is to improve fuel economy, we need to lower rolling resistance. That makes the rubber used in a tread a critical technology element. Tire tread is not only responsible for fuel efficiency but also plays a vital role in grip or braking performance. In order to improve such performance, it is necessary to improve the functionality of the rubber used in tires, and we believe that our technology can be effectively applied here. On the next page, I would like to discuss another important requirement for the tread of tires. In recent years, particularly in Europe, a new regulation known as Euro 7 is expected to be introduced to address the issue of microplastics in the environment. There are two major types of microplastics emitted from automobiles. One is tire wear particles and the other is brake wear particles.
With regard to tire wear particles, reducing microplastics by improving tire wear resistance, in other words, reducing tire wear, has become a critical issue. There is another issue. In recent years, vehicle bodies have tended to become larger, driven by growing demand for cars like SUVs. In addition, electric vehicles or EVs are significantly heavier due to the large number of batteries they carry. These trends toward larger vehicles and electrification have a substantial impact on tire wear resistance. Therefore, improving the wear resistance of tires is another important performance requirement. Fuel efficiency, grip, and wear resistance are referred to as the magic triangle in our industry, and improving all of these three factors is required. To address this challenge, we are focusing on solution S-SBR to enhance rubber performance.
On the next page, I'll talk about the market environment for the S-SBRs. According to market research firms, the global S-SBR market is forecasted to grow at a CAGR of 2.9%. In particular, S-SBR for fuel-efficient tires or high-performance S-SBR is expected to grow at 3.1%, outpacing the overall S-SBR market. On the next page, I'll briefly discuss battery binders. The market for lithium-ion batteries is expanding significantly due to the global proliferation of electric vehicles. In addition, lithium-ion batteries have recently been widely used in storage batteries, especially in ESS for renewable energy and in data centers. We supply binders for these lithium-ion batteries and through our proprietary highly controlled binder particle design, we are working to achieve strong adhesion to active materials as well as high durability for lithium-ion batteries. Next page is about our core business.
As mentioned earlier, about 80% of ENEOS Materials' business is derived from tires and automotive-related applications. While demand remains solid, as you're aware, the Japanese automotive industry has matured and significant future growth cannot be expected. On the other hand, more and more ethylene crackers are being launched in China, and there is a great deal of momentum for restructuring in the Japanese cracker industry, and our sourcing from C4 fraction is reducing. Under these circumstances, our top priority in the core business is to secure stable supply to our customers. To achieve this, we are strengthening cost competitiveness and operating with a lean structure. This is how we respond to the market environment of our core business. From the next page, I'd like to explain the growth strategies in our medium-term management plan, which started in fiscal year 2025. Next page shows an overview.
Our corporate vision is to be a group that continuously grows with operating profit of over JPY 20 billion in FY 2027, the final year of the medium-term management plan. Our target ROIC at that time is around 7%. As our business strategy, we focus on two growth businesses in this medium-term management plan. That is S-SBRs, which I have already discussed, and binders for batteries. We will continue to grow these businesses and at the same time, we will improve the overall productivity of our core businesses through a lean structure to provide stable support for earnings of ENEOS Materials. In addition, we will continue to launch new businesses beyond the current medium-term business plan. Next page is about key financial indicators. The middle column of the table shows our forecast for FY 2025.
We forecast net sales of about JPY 340 billion, operating profit of JPY 15 billion, and ROIC of about 6%. In the final year of the medium-term management plan, our target is net sales of JPY 380 billion, operating profit of JPY 21 billion, and ROIC of 7%. Our capital investment plan for these three years is approximately JPY 60 billion. This includes the construction of a new R&D building at the plant and the maintenance and upgrade of manufacturing equipment. That is all for our key financial indicators. Next is the business strategy of S-SBR, one of the two strategic businesses. Earlier, I mentioned that the enhanced S-SBR is expected to grow at a CAGR of 3.1%, but we are targeting its growth at 5.7%, which will outpace the growth of the market.
On the next page, I will discuss what we plan to do to achieve that growth. This is our plan for action. Simply put, with a global production system of three sites in the world, we provide a local customer support system with sales offices that are close to each market. We call this approach glocal, a combination of a global production system and localized customer support, and that is the business strategy of our S- SBR. S-SBR has a strong demand for designing materials, as mentioned earlier. So we develop such new materials through joint research with the world's top-class tire manufacturers and will supply these new technologies from our three global sites. In addition, this industry is growing significantly in Asia, and emerging Asian tire makers are gaining momentum.
By expanding sales of new technologies developed with global tire manufacturers to these new manufacturers in emerging countries, we aim to grow our business beyond the growth of the market. Next page is about our business strategy for battery binders. As you know, the EV market is highly uncertain. Until a few years ago, the EV market was expected to grow significantly. However, more recently, due to changes in government policies and environmental requirements in various countries, market growth has been lower than initially expected. In addition, the business environment is changing rapidly with intense competition in China and slower than expected growth in Europe. These factors further increase uncertainty in the EV market. Under these circumstances, our strategy for the battery binder business is to grow in line with our customers.
The key to this strategy is how we can enter our customers' markets effectively at an early stage when they are beginning to expand their businesses. Unfortunately, we entered the Chinese market later than other players. However, as Europe is the second-largest EV market, our strategy is to grow in line with the expansion of the European market. To achieve this, we will work closely with our customers to design new materials that meet the required binder performance I mentioned earlier. Please turn to the next page. I would like to outline our sustainability strategy. This slide outlines the initiatives of the ENEOS Materials Group, which are aligned with ENEOS Holdings' policy and the medium-term management plan toward a carbon-neutral society. The specific measures ENEOS Materials are taking are shown on the right for each area circled in red on the left.
There are three categories: mitigation of greenhouse gas emissions, promotion of energy and materials transition, and promotion of a circular economy. Regarding the mitigation of greenhouse gas emissions, we are working on the conversion of the fuel used for in-house power generation at the Yokkaichi Plant, energy-saving activities at each plant, and the use of carbon-free electricity. For promotion of energy and materials transition, we are working to reduce CO2 emissions through the development of rubber for fuel-efficient tires mentioned earlier. We are also working with various business partners to develop technology to produce butadiene, an important raw material, from bioethanol. We are also expanding our product line to obtain ISCC PLUS environmental certification. As for promotion of a circular economy, earlier I talked about producing butadiene from bioethanol, but we are also working to develop technologies to produce butadiene from CO2.
Also, we are working to reduce the final disposal rate and achieve 100% recycling of waste plastics. This slide is about the production of butadiene from bioethanol I mentioned earlier. Together with five other companies, we have made a joint proposal for NEDO's research and development of technologies to promote biomanufacturing. We are working on the production of butadiene and ultimately tires from bio-based raw materials. This slide shows another example, the Tire-Denchi Project. In this initiative, storage batteries are produced from recycled tires, and we are also involved in this project to supply the binders used in these tire batteries. Finally, I'd like to briefly introduce our DX initiatives. We believe DX is important for sustainability, and we are working on direct control of plants using AI.
At the ENEOS Materials Yokkaichi plant, for example, we have officially implemented AI-based direct control in parts of the butadiene production and recovery process, which is an important technology for supplying our raw materials. We are working on automatic control by AI in areas that could previously be controlled only manually by operators. This enables us to stabilize quality, achieve higher yields, and save energy. We are also applying this technology to other plants to promote DX and sustainability. That concludes the brief overview of ENEOS Materials. Thank you.