It is time for us to start LIXIL's Impact Briefing. We called this event ESG Briefing until last year, but in order to more clearly show that this is an event to show how LIXIL's impact strategy is integrated into business strategy to support the improvement of corporate value, we decided to change the name from this year to Impact Briefing. Today, under the theme Shaping Tomorrow Together, we will explain about impact and R&D strategy at our company, as well as initiatives for generating innovation that maximizes impact to society and environment. I would like to introduce to you the speakers in the order of their appearance: Kinya Seto, Director, Representative Executive Officer, President, and CEO; Hiroshi Kurimoto, Leader of R&D for LIXIL International; Executive Vice President of LIXIL Water Technology Japan, Hiroyuki Onishi; Executive Vice President of LIXIL Housing Technology, Satoshi Yoshida.
In the Q&A session, Outside Director and Chairperson of the Board, Yuji Nishiura, will join. Lastly, I'm Kawai from Investor Relations Office, and I will be serving as your emcee. Next, I would like to explain about today's proceedings. The agenda is as shown on the slide, and four speakers will present one by one. After the presentations, a Q&A session will follow. We expect to close this briefing at 3:30 P.M. I hope that you would be able to stay with us to the end. Now, I would like to ask Mr. Seto to take the floor.
[Foreign language]
Good afternoon, everyone. Thank you for attending our Impact Briefing today. To realize LIXIL's purpose, we have been driving both the enhancement of corporate value through business activities and growth, and the creation of impact in resolving social and environmental issues.
Playing a crucial role in achieving this are the strategic initiatives outlined in the LIXIL Playbook that you see on the slide, and the foundation that supports them, and you see that here as well. The LIXIL Playbook outlines the strategic initiatives that everyone at LIXIL should prioritize and role each person must play to make them a reality, positioning employees as the driving force behind value creation. It is crucial to strengthen the foundation that supports LIXIL. Our impact strategy outlines core pillars that represent the most pressing global issues where LIXIL can drive significant impact by leveraging our expertise. Creating innovation is essential for generating this impact. LIXIL provides products and services that support the lives of over 1 billion people worldwide every day. Research and development initiatives drive us to create innovative products and services, enhance our business value, and ultimately realize our long-term purpose.
LIXIL anticipates evolving needs and has continued to create a number of innovative products with high value added and differentiation. These products, born from technologies LIXIL has accumulated through research and development across business areas both in Japan and internationally, support a sustainable growth while impacting society and the environment. With regards to innovation, LIXIL has been working on the environment as well as society, and in the past few years, we had launched various products that would be conducive to doing so. We will continue to make the necessary R&D investments to drive our strategic initiatives of the Playbook, accelerating the expansion of our differentiated products lineup and the creation of new core businesses. I would like to talk about the global R&D at the foundation of that. The global R&D organization is put in place, especially in LWT.
We are promoting D&I, and we have an environment where people would be able to exercise their talent to their fullest extent. As for LHT, especially centering around Asia, we will be bringing in various ideas from Asia so that between the international market and the Japanese market, we would be able to have the talent from the various who has various talents to launch various new products. We will be developing in a timely manner and responding to the needs of the customers, the products that the customers need.
In order to have the D&I talents, as we have explained last year's ESG briefing, we would like to capture the various talents in order to improve the competitiveness and the key to integrating environmental strategy into business strategy, which is one of our Playbook strategic initiatives, is technological development that contributes to solving global issues such as environmental problems. Examples of our leading products to address environmental issues include PREMIAL, a low-carbon building material using recycled aluminum, and REVIA, a sustainable material developed by combining waste, plastic, and wood. Both contribute significantly to the realization of a decarbonized society. We would like to create societal impact through these products. Through this global R&D structure, we will drive the provision of the new value in existing businesses and creation of core businesses that would unlock future opportunities, thereby achieving sustainable growth.
Recently, I had the opportunity to visit ISH 2025, one of the world's largest international trade fairs held in Frankfurt, Germany. LIXIL, under its GROHE brand, showcased a range of innovative products centered around the theme of the pure joy of water, which I was able to experience firsthand. Within the exhibition of ISH, I think that LIXIL had one of the greatest products, the diverse product lineup featuring modern colors and designs, the GROHE Spa, Everstream Shower, and products catering to the needs of plumbing professionals left a strong impression. These comprehensive exhibits highlighted the potential of the latest innovations to transform the way we experience water every day. Particularly noteworthy was Pure Foam, which will be discussed in detail later on in the LIXIL International R&D presentation. This product, born from the fusion of Japanese and German technologies, combines exceptional designs with groundbreaking functionality.
This will be a huge differentiating point. In today's briefing, we will present how LIXIL's business addresses strategic initiatives through its impact strategy and R&D initiatives while having a positive impact for society and the environment. Following my presentation, each division will explain their initiatives to maximize the impact for innovation. First, Mr. Kurimoto, Leader of the LIXIL International R&D, will explain about LIXIL International R&D. Mr. Onishi will be explaining about LWTJ as the leader of that division. Following that, Mr. Yoshida, Leader of LHT, will explain about LHT, and at the end of the briefing, there will be a Q&A session to answer the questions from the participants. We will be joined by our Outside Director, Mr. Nishiura, who will begin the session addressing the Board of Directors' discussions related to creating innovation at LIXIL. I hope that you enjoyed today's session.
[Foreign language]
Thank you. Next, we will hear from Senior Vice President, Leader of LIXIL International R&D, Mr. Hiroshi Kurimoto, who will talk about initiatives to maximize impact through innovation at LIXIL International R&D. Kurimoto-san, over to you.
[Foreign language]
My name is Hiroshi Kurimoto from LIXIL International R&D. Thank you for this opportunity. To begin with, please allow me to introduce our R&D organization. Our global team is made up of members representing three continents, nine countries, and 18 sites. To accommodate the different needs of consumers in various countries around the world, our team of diverse members continues to deliver differentiated products and new values to countries around the world. An important role for us is to contribute towards the international growth of our business in the water sector.
Many new products that we launched last fiscal year are now being enjoyed by customers from all around the world, more specifically in 60 countries under Grohe brand, 13 under American Standard, and 5 under INAX. We are also collaborating with LWT Japan to create core businesses such as repeat business through the acceleration of innovation. Our R&D activities can broadly be categorized as either basic research or product and technology development. Going forward, we will allocate more of our resources towards basic technology research in order to develop more differentiated and value-added products. We'll also collaborate with suppliers and external organizations globally to enable more efficient development of new technologies. Our products are closely associated with people's lifestyles and infrastructure that differ between countries.
As such, we will strike the right balance between what is common globally and where to localize in final product in order to deliver differentiated products around the world, reflecting the voice of users. Regarding the most upstream development activity, which is research into basic technology, we are accelerating collaboration with Japan. This activity also doubles as a means to developing global competent personnel, such as, and as such, LIXIL International started up a research division on the 1st of April with the participation of a number of Japanese members. As we look towards the future, we intend to also advance collaboration with Japan in the area of pre-development so that we can roll out more functional components and product platforms to global markets, including Japan. I'd like to introduce two initiatives we are working on in order to accelerate innovation.
One such example is the start of the research division I mentioned earlier. A number of important research themes have already been assigned to this team, and in collaboration with partners from both within and outside the group, the team will work on mid- to long-term technological challenges with aim of deploying them into new products within the next five years. Furthermore, we open a new international competency center in Guangzhou, China, this week. In collaboration with local suppliers, we will roll out in near-term new technologies to the world, including the United States and Europe. Moreover, we will operate the center with a cross-functional team, including for procurement and supply chain, in order to enable quick decision-making. Our strength is the collaboration we have with many partners from around the world, including those from different industries. I'd like to introduce some of these activities.
Last year, we participated in the Innovation Summit held in Copenhagen, as well as in the AI Council of Aachen University, one of the top engineering universities in Germany. Through these, we started discussions about the possibility of innovating under collaboration with different industries, as well as about the impact of AI towards the development process. Furthermore, in regards to our internal activity of an ideation event for coming up with new technologies that we have conventionally held on a regional basis, such as in North America, Europe, and Asia, we have held this on a global level in collaboration with HYPE on this occasion, with the participation of Japanese members. This was not just an effort of digitalization. In fact, we created a platform through which the participants from all regions were able to engage in discussions and provide advice in an open and transparent way.
We will pick up and undertake research and development concerning those ideas that have attracted large internal votes. From here, I will explain about our practicing of the LIXIL Playbook by referring to some specific product examples. Let me start with environment strategy. We will launch two environment-friendly products in Europe. They are Everstream and Heat Recovery. These two products were officially announced at ISH, an international exhibition held in March. Please allow me to explain each of these products. Everstream is a product whereby used shower water is recycled to realize a high level of water and energy conservation. When you start the recycling mode, no additional water is required. You can continue to enjoy your shower with recycled water reheated with an embedded heater.
Furthermore, parts will be provided as an all-inclusive package that can be embedded into existing shower frames, enabling for the usage of a standard installation process, which also allows for easy maintenance. Heat Recovery system is made with a simpler structure in comparison to Everstream. It utilizes the heat energy of used hot water from a shower to heat water. By mixing the heated water with hot water, we can save the amount of hot water usage and conserve energy usage. Like with Everstream, we can install this system into our existing product so that the installation remains hassle-free and easy maintenance. Here, you can see the benefits under a certain condition. With Everstream, the cost of taking a shower is reduced by 70%, and with Heat Recovery, by 48%.
In Europe, people are sacrificing the enjoyment of taking a shower, spending less time in the shower, or reducing the shower pressure because of the recent increases in energy prices. With these two products, one can realize energy conservation without sacrificing the enjoyment of taking a shower. Next, I'd like to share an example of our initiatives to finding new core business. This is Pure Foam Kinya Ami. Some of you may be familiar with this, which is a Japanese product. However, this is an example of a technology developed in Japan being utilized around the world. Please take a look at the video, which introduces the video product. It is not just a simple reapplication of a Japanese technology. Rather, product value is further enhanced by combining it with existing shower systems.
With five different types of specially formulated dedicated soaps, one can enjoy special shower experiences depending on your mood at the time or depending on the time of the day, such as in the mornings or at nights. I will not go into details today, but while we have maintained the Japanese functionality of simply delivering delicate and dense foam, we have also captured the DNA of our Grohe design in coming up with a sustainability function to prevent excessive usage, with which the user can restrict the duration of foam delivery. Please allow me to end by saying that we will continue in our quest to generate new values by solving different challenges faced by the various regions and countries around the world, such as water conservation and access to safe water, and by focusing on creating new innovations. This completes my explanation.
Thank you very much for your attention.
[Foreign language]
Thank you very much. Next presenter is Executive Officer, Executive Vice President of LIXIL Water Technology Japan, Hiroyuki Onishi, to talk about the maximization of impact through innovation. Onishi-san, please.
Hello everyone. My name is Onishi from LIXIL Water Technology Japan. I will be talking about impact strategy as well as generation of innovation initiatives at LWTJ. First, I would like to talk about the history of LIXIL's water and tile business. Last year, we celebrated the 100th anniversary, and I would like to talk a little bit about that, how the 100 years had generated the core technology. LIXIL has been generating innovation for a century based on our ceramic core technology, materializing sanitary ware and tiles, responding to changes in the times and needs of the society. You see on the slide the products which were derived from the typical innovations.
These products were born out of innovation, and the core technologies which are especially important are Smart Aqua, Nanotech, and Space and Human Science. I would like to talk about the three core technologies one by one. First is Smart Aqua. It intelligently utilizes diverse water properties depending on the objective. You may have seen our water technology products at home or in public facilities. Our core technology, Smart Aqua, is used in all of it. On the left, you see Satis. As you can see on the slide, by using these foams as well as the way that is flown, the Satis uses that for auto cleaning functions. In the middle is Navish. This is the automatic water faucet where you would be able to use the sensor to start and stop the water. On the right is Automash.
It is an automatic flush toilet which has been introduced in public facilities in the train stations and commercial facilities, and it uses a water current, and the water current can be used for self-generation of power. This is the biggest characteristic of Automash. Next is Nanotech. Through this technology, materials are scientifically developed from the nano level to materialize functionality and aesthetics. Nanotech is used in products such as EcoKarat or water purification cartridges. EcoKarat is a construction material that has the function to absorb humidity or odor in the atmosphere. The wall of your homes or in public spaces like in hotels and restaurants, it is used in the walls. Without using the electricity, the material itself would be able to create a comfortable atmosphere. On the right is water purification cartridges.
The biggest core technology, which is ceramics, and the active coal technologies, these are combined as hybrid technology for the creation of the water purification cartridges, and various impurities in the tap water can be removed to provide safe and delicious water to our customers. Last but not least is Space and Human Science. This is a technology to create value by capturing how products are stored in spaces, as well as people's behavior and psychology. Representative of that is Easy and Quick Storage and EcoFuel. On the left is Fast and Quick Storage for the kitchen. It utilizes leverage principle, enabling the users to open the drawers with the slightest effort. Even if the user is an elderly person with lower strength, they can take out kitchen utensils without any trouble all at once. On the right is Aquafuel. Aquafuel's shoulder massage bath has adopted actual massaging techniques.
The water current would be able to massage your shoulder. The water stream rhythmically stimulates the periphery of the muscles on both shoulders, which tend to become tense, and it would have the similar effect as actual massaging by humans. Waveform water current is not electrically controlled but uses proprietary technology that utilizes water current momentum. At LWTJ, we would like to capitalize on our three core technologies, namely Smart Aqua, Nanotech, and Space and Human Science, to differentiate our products and to provide value to our customers. These three core technologies are the key to generating innovation. In terms of generation of innovation, we are not trying to generate it without a roadmap. The slide that you see in front of you is the innovation generation policy at LWTJ.
On the left, you see the innate strength that we have, our DNA and the existing technology, the principles of design. We have the strength there, and on the right, there are external factors that we need to take into account. We have identified three areas where we would be focusing in generating innovation. One is pursuing nature's potential and sustainability. Second is pursuing health and well-being for all. The third is upgrading the value of living environment adapted to urbanization. Urbanization, to put it in simple words, if you look at the residential housing situation in Japan, there is a concentration in the urban area. When you grow older, you want to live in convenient places where the hospitals and other facilities that you want to get to are closer to you.
In the urban areas, the space that you can use for housing is very small, but even if it's small, it should be universal and also comfortable. That is what it means in terms of upgrading the value of living environment adapted to urbanization. Now I would like to talk about the value creation process and organization. This is a process to transition what were born out of the three innovation focus areas to product development. You see the chart which explains the scheme. There are trend surveys, the mindset of the research of the consumers, and a core technology research. As Mr. Kurimoto has mentioned, these are the areas where Japan has a strength. Now, Japan and LIXIL International are working on this in an integrated manner from elemental technology research.
There are various potential technologies that are being generated and that will now transition into the product development indicated in the blue line. If we concentrate too much on the product development, we would not be able to create new technology. That is why we are looking at the upstream, which is elemental technology development, in order to create new technology for the market. I talked about innovation generation policy and value creation process and organization. Based on that, there have been various products which were developed, and I would like to talk a little bit about that. First is GreenTap that you see on the slide. You can enjoy cooled mineral water by opening your water faucet at home through a product that is a combination of LIXIL's technology. We launched this on March 29th of last year.
There is higher safety to this water, and you would be able to drink it whenever you want, wherever you want. LIXIL's water purification technology and water cooling technologies, as well as Suntory's technology to develop tasty products, were combined to create this product. It is safe and delicious, but it's also sustainable in terms of the use of the water. PFAS is causing a lot of concern in the society, and I would like to talk about how we have responded to this through our product. There is worry about carcinogenicity as well as negative impact to healthy development of children. Out of PFAS and PFUA, these chemical substances are considered to be very negative to health. We have confirmed that LIXIL's water purification equipment removes 80% or more PFAS and PFUA. Our core technology is very good for removing these chemical substances.
Three technologies are used: ceramic at the core and also the filter, which uses the active coal as well as nonwoven cloth for filter. It is a very advanced filter with various technologies combined. In the ceramic filter, we have put antimicrobial property. With regards to antimicrobial property, we have received the certification from SIAA, Society of Industrial Antimicrobial Articles, for antimicrobial articles. Our product has been certified by that. Next is shower toilet with the feminine front wash nozzle. There are two nozzles to a shower toilet of LIXIL, one for the rear and the other for feminine front wash. We wanted to create a product that would provide femcare to our female users. By having a dedicated feminine front wash nozzle separate from the nozzle for the rear, we would be able to provide sanitary comfort to female users.
Because this is a dedicated feminine front wash nozzle, it enables softer and wider scope cleaning. We are providing these kinds of properties to the female users. This product is identified as a femcare product, and in FemTech Japan Award, which is conducted annually, in the award 2024, shower toilet with feminine front wash nozzle has received silver prize for two years in a row. From adolescence to the menopause, we would like to be able to respond to various needs of women so that we would be able to provide a comfortable life for women. LIXIL shower toilet is growing 105% year-on-year in sales, a plus 5% year-on-year for these products. By focusing on the feminine front wash nozzles, we would like to accelerate our growth even further.
I talked about FemTech Japan Award earlier, and I would like to play the video, the voice of praise by Noguchi-san from FemTech Japan, the organizer of FemTech Japan Award.
[Foreign language]
The three core technologies: Smart Aqua, Nanotech, and Space and Human Science have been what we have continuously been developing, succeeding the technology from our predecessors. Output from technologies would, of course, change with the times, so we have put a tree here, and at the root, there are three core technologies. These three core technologies are the nutrients for the trees, and it would be used to bear fruit, and the fruit are the products. The three core technologies would remain unchanged, but the outputs will continue to change and evolve. Our theme for LIXIL's management is integration of environmental strategy into business strategy.
We will always be strongly conscious of that in pursuing the development of the three core technologies and continue to innovate. The technologies will continue to contribute in the expansion of the businesses in Japan and internationally. That will be all for my presentation. Thank you very much for your kind attention.
[Foreign language]
Thank you. Lastly, Executive Vice President, Executive Officer, LIXIL Housing Technology, Mr. Satoshi Yoshida, will explain about the initiatives at LHT to maximize impact through innovation. Yoshida, it is now over to you.
Hello, everyone. My name is Satoshi Yoshida from LIXIL Housing Technology. I will explain about initiatives at LHT to maximize impact through innovation. At LHT, we are working to build a business model that integrates environment and business with a view to realizing LIXIL strategy, LIXIL Playbook, and LIXIL Environmental Vision 2050.
Specifically, we are striving to enhance corporate value and address global social challenges through our business activities. To that end, we are focusing our research and development activities on new materials and new technologies. LHT has a research facility in Düsseldorf, Germany, where we collect information about cutting-edge technologies and about latest trends from the world. Especially in regards to sustainability, we're constantly capturing information from Europe, the world leader, and we also engage in R&D activities at R&D centers in Thailand and Japan to come up with new innovations with members with diverse backgrounds. At our research facilities, we try to understand deep insights about the future and about the strategies of each business so that we can create values that contribute both in terms of environment and profitability. Through these initiatives, we came up with new innovations, namely PREMIAL.
They recycle low-carbon aluminum and REVIA, sustainable material, both innovative technologies that expand impact in terms of environment and profitability. These new environmental values we created were considered highly, and at the request of the Japanese government, we obtained an opportunity to present at COP29 held at Azerbaijan in November last year about our unique values to the world and that others cannot easily imitate. At LIXIL, we attended the conference locally and also co-sponsored Sustainable Innovation Forum, COP29's biggest private sector event, and explained about the details of LIXIL's environment strategy using movie contents and interview articles. Our core product, PREMIAL and REVIA, which are expected to contribute towards decarbonization and circular society in particular, received high praises from many government representatives and other participants. From here, I would like to give a more detailed explanation about LHT's environment strategy.
As means to addressing an urgent global issue of climate change, efforts towards decarbonization continue to accelerate in pace. The construction sector, in particular, accounts for around 37% of all global CO2 emissions, and as such, reduction of CO2 emissions from buildings is essential if we are to achieve a decarbonized society. Moreover, a greater focus is now on reducing the whole life carbon, which is the amount of CO2 emitted through the entire life cycle of buildings, from construction to renovation all the way to demolition. The Japanese government has started to examine implementing a system that requires for the owners of new buildings of a certain size to calculate the whole life CO2 emission from buildings using life cycle assessment. As an initiative towards reducing operational carbon, LHT is now working on building highly insulated houses and on improving the performance of building openings.
The market for new houses in Japan is on a downward trend, and as such, greater expectation is now placed upon the renovation market. Helped by the government's recent massive subsidy program of more than JPY 100 billion, we are seeing increasing demand for insulation-related renovation of houses, including those associated with opening new houses. Coming up with solutions in response to these government initiatives and to the trends in society, in our view, provides us with great business opportunities. In addition to operational carbon, LHT is also working on initiatives that contribute to reducing embedded carbon. Using low-carbon materials as main materials or products, such as recycled resources, we are able to establish technologies and provide products that lead to reducing embedded carbon. A great example of such a solution for us is PREMIAL, a recycled low-carbon aluminum.
To produce aluminum, a large amount of electricity is needed to smelt the metal. However, by recycling and reusing scrap aluminum, we are able to reduce the amount of CO2 emissions in a significant way. Having said that, we have not seen much progress in regards to scrap aluminum usage around the world due to the difficulties associated with collecting and sorting various types of metal alloys. Even in Japan, recycling of raw aluminum remains at only around 10% of the total market as at 2019 because of the high technology needed to remove impurities contained in these scraps.
However, at LIXIL, we have continued to undertake research into aluminum recycling technology for more than 25 years as we believe that this will contribute to reducing CO2 emissions based on manufacturing know-how we have accumulated over many years and based on stable procurement of scrap aluminum enabled through a strong partnership we have forged with suppliers over many years. We were able to create a new value called PREMIAL, a low-carbon building material using recycled aluminum. As for the PREMIAL series of products that we produce at all of our aluminum material plants, which are in Japan, Thailand, and Vietnam, we were able to obtain third-party certification that relates to the environmental impact of building materials used in construction. LIXIL has a target of achieving 100% utilization ratio of recycled aluminum in products that we supply by the fiscal year ending March 2031.
Our initiatives towards recycled aluminum are something that we can be proud of globally, both in terms of reducing environmental burden and of enabling business growth. LIXIL's PREMIAL is not something that others can imitate easily and is increasingly being adopted in industrial products in non-construction sectors, in addition to various facilities and shops both in Japan and overseas because of the great positive impact they create towards the environment. Today, we have a video message from Taisei Corporation, who has adopted PREMIAL R70 as building construction material for the first time in Japan, to talk about their strategic reason for making the decision and how they evaluate the products. Please take a look
[Foreign language]
Aside from PREMIAL, we also have REVIA, a sustainable material developed from waste plastics. This is another initiative towards the usage of recycled resources.
REVIA is a sustainable material that can be produced from almost all types of waste plastic and waste wood, including marine plastic, which was historically considered difficult to recycle and had to be either landfilled or incinerated to dispose. If we compare the amount of CO2 emitted when producing one ton of REVIA to the amount of CO2 emitted when incinerating the same amount of waste plastic or waste wood, we can realize some 82% reduction in the amount of CO2 emitted. As we look to the future for REVIA, we need to establish an ecosystem that enables long-term stable procurement of raw materials. As such, we have concluded a partnership agreement with the city of Suzu in Mie Prefecture at the end of March this year related to recycling of plastic resources.
With this agreement, we are able to use as raw materials the waste plastics that come from households in the region to produce product at our HISAI plant located in the same area. In other words, usage of our product in the region contributes to establishing a sustainable recycled-based society. Going forward, as a member of our society and local regions, we will continue to work with a wide range of stakeholders, including our customers, local communities, business partners, and employees, so that we can engage in initiatives that contribute to our environment and to the further progress of our society through our business activities. That completes my explanation. Thank you for your attention.
[Foreign language]
Thank you very much. That will be all for the presentation from LIXIL. We would like to now go into the Q&A session.
While we are preparing the venue for the Q&A session, I would like to explain about the Q&A. We will be taking investors' questions first, followed by the questions from the media. In order to take as many questions as possible, we would like to ask you to ask the two questions at one time. When you ask a question, please press on the raise hand button at the bottom of the screen first. The MC will designate you one by one. When you are designated from the MC, a confirmation screen will appear on your screen. Please click on "Participate as a panelist." By clicking on the audio buttons on the lower left to turn them on, the presenters will be able to hear your question.
If you put the video on, your image will appear in the live streaming, so please decide whether you want your video on or not.
[Foreign language]
We are now ready for a Q&A session. The members here will be responding to your questions. Before taking the questions from the participants, I would like to ask outside director Mr. Nishiura the questions related to the involvement of the Board of Directors meeting. LIXIL has a global R&D structure, and innovation is being generated through response to the changes in the society for sustainable growth. In the Board of Directors meeting, how are you involved in making this happen?
[Foreign language]
This is Nishiura, and I would like to respond to the question. We have changed our focus in the Board of Directors meeting. In the past, we had been focusing on the restructuring of the governance structure.
Now, we are focusing on the sustainable growth. Through innovation, new value should be generated for sustainable growth. This concept is being shared by all of the board members, and there has been active discussion about this. As for the management assets, is the investment enough to have sustainable growth? The various questions are being asked from that regard. We are not just staying in the Board of Directors setting. There is a round table of the board members, and also, in order to understand the technologies and products which were explained, for example, today, we go to the plants, we go to the trade shows so that we will have more understanding of LIXIL's products. That's one point. The second point is as follows. Outside directors have a variety of experiences from manufacturing, financial services, investment in the area of law.
The outside directors bring a lot of experience to the discussion. That needs to be—that kind of expertise must be communicated to the executive side of LIXIL. For example, the board member who has worked for a long time in the manufacturing industry has had lecture sessions or participated in the discussion sessions and provided insights to the LIXIL members so that they can have a wider scope of understanding for their line of work. The directors are involved in a wider scope in the innovation, and we would like to continue to do that. That will be all from me. Thank you very much.
[Foreign language]
Thank you very much. We would now like to receive questions from those participating. The first person from SMBC and Equal Security is Kashima-san. Please start your question.
A confirmation screen will pop up, so please press "Participate as panelist." Please turn on your audio, and the video is voluntary.
This is Kashima from SMBC and Equal Security. Thank you very much for this opportunity and for the explanation. Thank you. I have only one question. LWT Japan or LHT that you talked about in regards to the product innovation or technology, there are products that utilize those. I think there are products that are already commercially available, and what is the sales of—is it better than expectation? To see a greater spread of usage, probably the cost will be an issue. From the customers, they will look at the price versus value. How are they looking at that, and how can you work on the situation to improve the sales? Is the issue still too large in terms of cost?
Are you facing a hurdle? It may be difficult for you to talk about all the products, but if there is any typical representative product that you may be able to use to explain, please give some explanation.
In terms of the actual track record and the sense of challenge, and maybe I think each of us can talk about a key product, so we'll start with Yoshida-san from LHT. For myself, PREMIAL, which is the low-carbon, the aluminum. Now, in regards to this product, initially, the price was relatively high because of high usage of recycled aluminum. And the uses were very limited with those who are highly concerned with the environment.
More recently, in fact, an international customer—I cannot name names—but a global company whose name I think everyone knows, we have received a significant order from such a company also in Japan from next fiscal year. A new system is expected to start. Because of that, we are receiving a lot of inquiries right now. In that regard, for PREMIAL, we are feeling that there is going to be a significant increase in the sales volume. For myself, in my explanation, I touched about the water purification and also shower toilet. Now, both have grown to more than JPY 10 billion and JPY 50 billion in terms of business size already. It is already a profit pillar we want to expand more important, so the green and mineral in terms of the water toilet.
For LIXIL International, there was an explanation about this, appear from Pure Foam, which is a foam shower. This was introduced into the market in Japan first. Initially, we used crowdfunding, and it was more experimental when we launched the product into the market. It did sell, but initial investment and also the initial cost was quite high. That was a bit of a struggle. The key here is that we are a global company. New technology developed in Japan is not just limited to Japan. We can roll this out internationally all at once. In fact, recently, we launched a product in China, and we have already launched a product in Europe. When we see the increase in production volume, in fact, the production volume can increase tenfold in a short time.
That enables costs to be reduced in a short time, enabling the product to grow as a core product. Innovation and also the market, the deployment on a global basis. When you think about these aspects, if it is an even for new technology, we can grow those products into a core profit owner in a short time. That is the kind of thing we have been working on. Lastly, for international, Kurimoto-san. In terms of an international product, one is PUVAFORM that Onishi-san talked about. This product was launched in China in January this year. In terms of Europe, we have started to take orders since the exhibition in March. We do not have the numbers built up as yet. In terms of China, I cannot mention specific numbers, but more than our expectations, we are seeing very strong progress, particularly.
It is actually sold as the standalone unit or in a set with a shower. Those people who come to the showroom, those people who came to see Pure Foam, they may not actually purchase the Pure Foam, but they decide to buy a GROHE shower system. There is that kind of a synergy effect. We are seeing better reaction than what we have expected. It is difficult to give a direct response using numbers to Kashima-san's question. It may be difficult to understand. In the case of LHT, the product PREMIAL, what the normal aluminum was used has been switched over to PREMIAL. This switch over has the benefit of increasing profit margin. For LWT Japan, this year, the business environment was quite tough.
LWT Japan still performed relatively well because we were able to launch new products of these types in quite a large volume. We are starting to see the benefits really being visible from this year. For LI, we are about to expand this going forward. ISH, for example, that we talked about in the presentation when we introduced our product using such an exhibition, European customers who are very much environment-conscious, I think they did actually find a lot of interest. There, we still have not reduced the numbers that we can explain as yet.
[Foreign language]
Thank you very much. Kashima-san, did that answer your question? Yes. Thank you very much. Actually, there is no other question at this point in time. If you have any additional questions, Kashima-san, you would be able to ask it.
[Foreign language]
I'm okay. Thank you very much.
Please press on the raise hand button if you have any questions.
[Foreign language]
From Mitsui Sumitomo Trust Asset Management, Takegawa-san. Please press on "Participate as panelist" when the confirmation screen comes up. Please put your audio on. If you would like, please put the video on as well. Takegawa-san, please.
[Foreign language]
Sorry, I am late. I would like to ask two questions to you. The first question, I think, even before LIXIL changed its name to LIXIL, it had been launching innovative products. For example, the touch water faucet. It was very exciting to see what LIXIL was planning next. Recently, I now have EcoKarat on the wall, and the atmosphere of the room has changed. I do not know how the functionality is, but it feels like it is cleaner in my room. I think these are very interesting products, and you have very good technology.
My first question. The impactful products, environmentally friendly products are what you are developing. What is the sensitivity of the customers? Are they following what you are doing? When I talk with real estate companies, if they—so I understand that even if there are environmentally friendly buildings, if it's not reflected in the profit that they make, they would not be—so they may be reluctant to go after those buildings. In Europe, it is now progressing, but in the case of Japan, it is lagging behind. By using the impactful products, by launching it in the market, do you feel that the customers are understanding the value of that and they are willing to pay more for those values? I think this is something that would be directly linked to the improvement in your profitability. I was wondering how your current situation is.
I will stop here to hear your response.
I think that is a very good question. The situation differs by LHT and LWT. First, LHT. LHT products are difficult to differentiate: the sash for the windows, the doors. Considering that, the end users probably would not pay more for environmentally friendly aluminum. However, there are more regulations in various countries, and CO2 must be reduced by the companies, and the companies have specific targets for it. In the area of buildings, there are more people who would be willing to pay more for environmentally friendly products. As for the REVIA, which is a plastic recycled product, it is not the individual consumers who feel it's good, but it's more about the municipalities or the players with public interest like building a new stadium. The consumers, consumers would not be paying more for the construction materials.
What we need to do is to involve the government, like symbolized in the subsidies being provided from the national government. As for the water technology, there are cases of people buying environmentally friendly products in Saudi Arabia, California, or in European countries where they have restrictions in the amount of water that they could use. If you want to use water more under those situations, Everstream will be a good product. If you look at the water, the beneficial aspects of water to the consumers is that it's good for your health and it's delicious. Maybe the consumers care more about those aspects rather than the environment. The individuals may not be paying more for environmental friendliness, but when there are regulations about the pet bottles or the regulations regarding the CO2 emission to the companies, the demand for environmentally friendly products is increasing.
We would be able to approach the individuals who would like to use the resources more even under those regulations through Growing Blue, the GreenTap, those, and Everstream. The Everstream is a recycled water product. The consumers would be able to use water more even if the actual amount that they are using is less. The individuals would be paying more for things which would be conducive to have a more enjoyable life. Nishiyura-san, could you add on to that comment, please? In the Board of Directors meeting and in the Board of Directors roundtable, we have discussed a lot about the points that you have made. LIXIL is continuously generating new values, but those values are not fully communicated to the consumers as well as the construction companies. We are working on to improve that. Thank you very much.
We would like to move on to the second question by Takegawa-san. Yes, please.
[Foreign language]
We have the presence of the outside director. I would like to ask from that perspective. The PBR is a little less than one. How would you be able to bring it up to one? The critical point will be how you would be able to increase the ROE, the cost reduction, launch of new products. How you would be able to improve the operational profit will be the key. Also, we need to take into account PER. The PER looks very high because the base is low. You have to think about the improvement of PER also. How you would be able to reduce the equity at the capital ratio is something that you have to think about.
Compared to the original plan at the beginning of the fiscal year, you have not been able to achieve it in the year end. I know that there are many reasons behind it, so I would not pick on that. I think you need to accumulate the experience of being able to achieve the plan. That is one point. Another thing is how you would be able to improve the expected growth ratio. To improve the expectation level, I think this kind of briefing session is very useful. Also, after 2017, you have not been disclosing so well about the midterm plan.
I know that there are various reasons for that, but I think that the market needs to understand what kind of challenges that you're facing and what you are doing to improve it, and what kind of methodologies that you have in order to achieve what level of profit. You need to show that to the market in order for the investors to be comfortable in investing in your company.
[Foreign language]
How you would be able to improve the accuracy of your estimate for the year, what kind of view does the outside director have?
I will take this question. To the board of directors meeting and the outside directors, we have the same concern as you, both for question one and question two. The LIXIL playbook shows the directionality of the company. We need to know the progress and how the outcomes are coming out.
We believe we need to have a system to track how the company is doing. About two weeks ago, there was a discussion about the midterm plan in the board of directors meeting as well as the roundtable. The roundtable has the longer hours of discussion. On the points that you have pointed out, we would be discussing more and disclosing more in the future. Anything that you would like to add, Seto-san? It is true that we were not able to live up to the plan that we have originally set out. We are not trying to blame you for that. I understand the background for the non-achievement. To your second question, COVID as well as interest rate hike, the things which we did not expect. Also, there is another matter, the assuming of presidency by President Trump.
As Nishiura-san has explained, we are making deliberations as to how we disclose our view in the long term. We would like to decide first internally, and we will brief you once that's ready. Thank you very much. I think that you should put your shoes into the investors' shoes and to invest. I think from the investors' perspective, and in considering that, you have to think about what the investors would like to know about how the company is doing. Whether your value stock or growth stock, I know that you want to be the growth company. I think that you need to be able to show what you're good at and what you are not so good at and how you would be able to improve any deficiencies that you may have.
You need to be able to show the PDCA that you're doing to the market. If you are able to do that, I think that your company will attract more attention from the investors. That will be all. Thank you very much. Thank you for your advice.
[Foreign language]
Thank you. Next, we'd like to receive questions from the members of the media. Again, to enable as many people as possible to ask questions, please ask only two questions at a time. If you want to ask additional questions, please raise your hand once again after you asked your first set of questions. If you have questions, please use the raise hand function.
[Foreign language]
Thank you for waiting. From Sanyo Shimbun Newspaper, Masuoka-san, please ask your question. Once the confirmation display comes up, please press participate as panelist.
Next, please turn on the audio, and the video is voluntary. Start your question, please.
[Foreign language]
Thank you. Masuoka is my name from Sanyo Shimbun Newspaper. Now, I want to ask about two questions regarding PREMIAL. First of all, FI25 sales or inquiries. I want to ask about that. At the meeting last year, you came up with several hundred billion yen or sales as an arbitrary number, but maybe JPY 100 billion could be possible. Last year, there was an inquiry of JPY 30 billion or so. For FI25, you said that you are starting to see inquiries from Europe and also overseas. In which fields are you seeing an increase in inquiries going forward? Vis-à-vis 2024, how much increase can you expect in terms of the amount?
First, allow me to answer your question.
First of all, for overseas related to automotive, for industrial products, inquiries from those sectors and curtain wall manufacturers from overseas, we've started to receive orders in those sectors. As of now, for the focus for this fiscal year, we should reach JPY 40 billion or so. Right now, we have R70 and R100, two types of product for PREMIAL. The recycling rate has increased more recently. Because of the increased recycling rate, we want to increase the PREMIAL ratio. Before the end of this fiscal year, we should be able to announce more detailed numbers in a separate way. I hope I look forward to that. Thank you. Curtain wall and the automotive industry. Is that mostly European? What is received? No, it's not just Europe. We have been receiving a lot of inquiries from Japanese companies as well.
As was explained in the Taisei Corporation's video before, the external wall material, there has not been much ways or means to reduce your emission. The Japanese laws, or because of the change in Japanese regulation in this area, we feel that there is a significant potential. We have high expectations, hopes in that area. Just ask associated with that. The scrap ratio is going to be increased. You are going to be announcing a product in that regard. Specifically, are you thinking of somewhere between 70% and 100%, something like 80%? Is that the kind of thing you are looking at? Yes. The recycling rate may be a little bit lower, but something that is a little bit more cheaper in terms of price range so that more people can use low carbon aluminum.
That is the direction that we want to expand going forward. More broad-based to enable a much wider range of people to use. That is the kind of expansion we want to achieve. You are doing exterior right now. For the building construction material, that could be a potential usage. Yes. The aluminum construction material for housing, exterior attaches for housing. Also, the construction materials are used for interior or kitchen for LWT. In regards to the aluminum product that we supply, we want to increase the PREMIAL ratio as high as possible. The next question is in regards to the aluminum scrap. Now, the sash manufacturers in Japan, they are focusing on low carbon, the sashes. Usage of the scrap, I can understand from Japan domestically, but overseas, that is Southeast Asia.
Securing scrap from the Asian region, I understand that you're thinking about that. Towards achieving the decarbonization target going forward, are you going to work on securing aluminum scraps from overseas? How are you going to work on that? As was explained before, for us, we have aluminum materials at aluminum material plants in Thailand and Vietnam. They have already obtained the PREMIAL certification. Even now, we are able to procure aluminum with high recycling rates over 25 years. Not just the manufacturing technology, but we have been establishing a network of procurement, which is one of our strengths. Even now, in Thailand and Vietnam, we are able to procure scraps quite stably. For Thailand and Vietnam, it is the local procurement for local production. Is that the case? Conversely, Southeast Asia to Japan, that type of procurement is not something you are considering?
For what we produce in Japan, we do have sufficient aluminum scraps in Japan, but the aluminum scrap from Japan is actually being exported abroad. In that regard, for domestic, we intend to use domestic.
Understood. Thank you very much.
[Foreign language]
In terms of the recycle ratio, recycled aluminum usage ratio has been disclosed as of March 2024. It's 78%, and we would like to make it to 100% by March 2031. The next question is from Nikkei Newspaper, Itosan. Please ask your question. Please press on the participate as panelist on the confirmation screen. Please put your audio on and video if you would like.
[Foreign language]
This is Ito from Nikkei Newspaper. I would like to ask about the US business. For the Japan business, there was an announcement. I was wondering what you see the trends in the US, especially from the perspective of sustainability.
You were asking about President Trump? Rather, the overall trend of the North American business. I think that the performance is bottoming out. I was wondering how you see the trend going forward. The Trump tariffs, how it would impact us is another important issue for us. In the U.S., the market environment from September to October of last year, it was bottoming out, and the interest rate was coming down, and the market was considered to be expanded. However, since President Trump started talking about tariffs, people became more conservative. There is a possibility of inflation still, and considering that and the potential of interest rates staying high, this would make us wonder, is it really possible for the U.S. market to improve? There is a possibility that the improvement may not come for another year. Also, price is important.
To the price, Trump tariffs will be impacting it. The ceramic toilets and also the water faucets and showers, those are the main products. As for the ceramic products, Toto, Kohler, and LIXIL, we are manufacturing in Mexico. It would not be exempt from the tariff this time around. The smaller manufacturers, like the low price point private brands, are procuring from Asia. There will be an elimination possibility of low price products, and that would be a plus for us. As for water faucets and showers, the companies have different locations of production. 50% for us comes from Mexico. In the case of Kohler, 100% Mexico. As for us, it is mostly Asia. There are companies who need to increase the price and the companies who do not need to raise the price so much.
It is very difficult to foresee how the situation would look like in the market, the market environment. From the perspective of Mexico being accepted from the tariffs, the inflation issue may not be so big, but the U.S. situation is a bit worrying. The bathroom business, if we were to have ABG, it would work on it, and American Standard will be cross-selling our faucets and toilets when they're selling the bathtub products. I think that the individual strategy will evolve. Sorry that this is not a straightforward answer. The impact from the announcement of tariffs yesterday, we would not be able to say anything definitive until we are able to see more clearly the situation. It may take one more month to define that. Thank you very much for your response. Thank you. We are already at the scheduled closing time.
With that, we'd like to end the Q&A session. For those questions that we were unable to respond to today because of time constraints, we apologize. For any additional questions, please contact the IR section at the Department of Communication, the Department, and hope that you understand. For those who participated, we'll be sending a questionnaire. I hope that you also help us by filling the survey. With that, we'd like to conclude the impact briefing session of LIXIL. Thank you all for your participation today.