My name is Masaya Watanabe, and I have been serving as President since last November. Allow me to use this opportunity to give you a status update on progress of the medium-term management plan and future management policies. Some topics play a role in the results for the first quarter, so we will be exploring these as well. First of all, we have received opinions from stakeholders who attended the annual general meeting of shareholders, and from others, that we should manage the company by inheriting the good qualities that made Mani great over the years. I concur with these opinions and would therefore like to enact management policies along those lines going forward. In other words, Mani's corporate identity remains the same, as we are committed to continuing our vision of delivering the best quality in the world to the world.
That said, these past two months, over the course of discussions and deliberations with the managers, we reached the conclusion that it would benefit the company to be a little more proactive. In light of this, we have now added the word "challenge" to Mani's corporate value. This slide shows the new management team. Former President Saito now holds the position of Chairperson of the Board of Executive Officers and the title of Technical Research Fellow. Mani has deep roots in the pursuit to create niche-top products as a company with a strong R&D component. Chairperson Saito has a tremendous commitment to this vision, as well as great insights, and he has already started leveraging this passion and knowledge for the sake of the company in his new position. I will be going over the details in a moment. First is progress in the execution of the medium-term management plan.
Allow me to start with the framework, which we announced back in 2021. Within this framework, we announced our goal of becoming a true global company and have been taking on new challenges in sales, production, and development. Here is a progress update in terms of our business performance. We expect to achieve JPY 30.2 billion in net sales for fiscal year 2025, meaning we now expect to achieve, one year ahead of schedule, our target of JPY 30 billion over the ongoing five-year medium-term management plan. Although operating income is still slightly short JPY 10 billion of the target, our basic understanding is that we are moving forward based on the prospect of achieving the five-year plan, as we expect to achieve most of our targets one year ahead of schedule. Within these efforts, we position the development of new products as an important pillar.
More specifically, we developed JIZAI, a nickel-titanium rotary file, and vitreous forceps, with the objective of nurturing these two product lines to become important pillars following our ophthalmic Knife products. On the left, we have JIZAI, which was first launched in 2020. This was then followed by another important milestone in September 2024, when we added a new file to our lineup. Dentists employ a treatment sequence consisting of the following three steps: patency, glide path, and shaping, and each step requires a different dental file to be used. Mani's lineup now covers all three steps, boosting the competitiveness of our products. As explained by Vice President Takahashi, we applied for regulatory approval for JIZAI in China in January 2024, and it will take about another year to complete the process. This is pivotal in our efforts to address changes in demand in the Chinese market.
Additionally, we received extensive feedback from dentists. Our current product has been well received. However, dentists have also asked for some tweaks, such as improved cutting ability. This is a core area for us, so we are now carrying out the development of a new and improved product under Chairperson Saito's leadership. We expect to be able to bring this new product to market in 2026, and we expect this launch to be another important milestone catalyzing growth. On the right is our vitreous forceps, which was launched in April 2023, and we have already received feedback from doctors for this product. This product was praised for the excellent gripping strength of the tip, allowing for the steady manipulation of the retinal membrane during surgery. We did receive requests to improve grip usability, so we are currently in the R&D process to address this feature.
The manufacturing process is very complex, so we have made the decision to carry out the manufacturing at our smart Factory, with an eye toward full-scale deployment by around 2026. It will therefore take some time for our efforts here to come to fruition, but we will nevertheless work to nurture these products in order to achieve a sales target of JPY 3 billion for new products by fiscal year 2029. This figure includes some other new products to some extent, but JIZAI and our vitreous forceps will be the key drivers. Next is our dental restoration material business. It has now been close to a decade since Mani acquired Schütz Dental. Since then, we executed post-merger integration, built a new factory, and now we are setting up our business. Sales are still at JPY 1.9 billion, and the factory's operating rate is only about a third of total capacity.
We therefore have plans to grow orders and improve profitability. Next is our global production system. As previously discussed, construction for Mani's smart factory is expected to be completed by the end of January 2025, allowing us to operate two main production bases at once. The smart factory in Japan will be the mother factory for the development of new cutting-edge technologies, which we will then be rolling out to our operations in Vietnam. We will start by establishing a line for ophthalmic knives, and we are aiming for mass production from the beginning of fiscal year 2026. Next, I would now like to explain Mani's future management policies. As I mentioned earlier, we are in the process of executing the company's five-year medium-term management plan, and we expect to be able to meet our targets more or less a year ahead of schedule.
Additionally, we were initially aiming for JPY 50 billion in net sales within the scope of the next Medium-Term Management Plan. We are working to maintain a CAGR of around 12%, so we have now shortened this period by two years, as we now expect to reach JPY 50 billion in net sales by fiscal year 2029. Naturally, business as usual doesn't cut it if we intend to meet these targets, in light of the changes in the business environment surrounding Mani, and in order to address new opportunities for the company. As for risks, which are shown here on the bottom right corner, challenges related to China have come to the surface in the first quarter. Countries like China, India, and Indonesia offer preferential policies for domestic production, and we also face intensifying cost competition among competitors in emerging countries.
We will be addressing these new challenges while simultaneously capturing the kinds of business opportunities, as shown here in the upper left corner, allowing us to sustain our growth potential. In light of the elements I mentioned just now, we have formulated four key policies. First, we believe that Mani's business model, which has driven growth for the company over the years, still holds further untapped potential. We therefore want to unlock this potential and offer our products to customers all over the world and develop new products. Second, we will work to put in place a management base commensurate and human capital to keep up with Mani's significant expansion from its status of medium-sized enterprise. Third, we have plans to continue expanding business into adjacent areas by leveraging our core technologies.
This is a medium to long-term idea to play out over the next four or five years, and we would also like to prepare for beyond 2029. Lastly, our fourth key policy is to enhance strategic management through alliances and M&A. These are the four policies that we would like to pursue. This waterfall chart shows our growth path toward JPY 50 billion in net sales. The first is to expand sales based on our current product lineup globally, with promotions and sales force. We expect these efforts to represent two-thirds of the increase needed to get to JPY 50 billion. The remaining one-third will come from the launch of new products and the launch of new businesses. The launch of new products includes JIZAI and vitreous forceps. The launch of new businesses includes dental composites, and we are also considering M&A as an option.
Personally, I like the idea of growing our top line with new products, but one of the characteristics of Mani's business is how we carry out initiatives over extended time spans. In light of this, I believe this two-thirds to one-third breakdown suits Mani's business. Next, I would like to introduce our segment strategies. The horizontal axis shows net sales, while the vertical axis represents the operating income ratio. The circles represent the results for each of our businesses in fiscal years 2021, 2024, and 2029. The blue circle represents the results for the eyeless Needle segment, which grew significantly between fiscal years 2021 and 2024. Going forward, we intend to continue growing sales while steadily improving profitability. The yellow circle represents the results for the surgical segment, for which we want to grow the most towards fiscal year 2029 with our ophthalmic knife and new product lineup.
The green circle represents the results for the dental segment, and its profitability has unfortunately declined over the past four years. Looking at the results in detail, SG&A dropped by close to 40% in 2022, making for a results increase. This is due to the development of JIZAI and the upfront investments we made. SG&A is increasing, and we are now in a position where the operating income ratio is just under 20%. We will continue to develop new products to increase sales while maintaining profitability. Last, on the bottom left, we have our dental composite materials business, and the purple circle represents the results. This business currently posts close to nothing in profits, but we have plans to expand the scale of the business and improve profitability and sales capacity. This concludes my overview of Mani's business portfolio.
Next is a more detailed breakdown of our plans for the surgical business. We have three key targets here. First, we would like to increase the market share for our ophthalmic knife, ultimately reaching 50%. Second, we want to expand our product lineup. Within this scope, we have devices like vitreous forceps and trocars for use in glaucoma and vitreous surgery in our R&D pipeline. Third, we will work to achieve collaborative innovation with pharmaceutical companies. Within this scope, we have already brought to market a double-step knife for use in the treatment of glaucoma, jointly developed with Santen Pharmaceutical. We are currently in talks with other companies with an eye toward further joint development opportunities. Next is the eyeless needle business. Here, Mani is currently in the number two position globally, and we are at the top among independent manufacturers in the world.
Going forward, we intend to intensify connections with existing customers and cultivate customers in the Middle East, Africa, and Central and South America, regions where we still have a lower market share. We will also carry out initiatives in the up-and-coming field of robotic surgery. Lastly, manufacturers from emerging countries like India have gained significant ground in recent years. In terms of positioning, we offer products on the high end of the market, while competitors from these countries offer products on the low end, but we want to further delineate a difference here. Last is the dental business. Mani's two domains in this business are root canal treatment and rotary cutting equipment. The size of the rectangles on the left indicates the size of the market. As Vice President Takahashi explained earlier, the market for root canal treatment is shifting from hand files to nickel titanium rotary files.
Mani was a little bit slow in entering this market, but we succeeded in creating a superior product, which is JIZAI, and we will continue to capture share in the market for rotary files. While Mani's share in the market for diamond burs is at 16%, currently we were not making too much sales of carbide burs since its manufacturing costs were high. However, since we have access to customers and channels, we would like to upgrade our product offerings in this area and grow sales. We will start by focusing on these two domains to deliver growth. Next, I would like to introduce our key initiatives for growth. Starting on the left, we have each region as a percentage of sales. The deeper the shade of orange, the higher the percent weight.
As you can see, Mani has achieved a significant position in regions like Japan, China, and in some areas within Asia. Going forward, we seek to further grow our share in these regions, but rather than acquiring new customers, the key strategy here comes down to being able to roll out new products. On the other hand, in regions where we have a low market share, such as the Americas and EMEA, which are shaded in pink, we intend to carry out initiatives to grow sales. We also have a Global One Mani sales structure shown here on the right corner of the page. Up until now, each local subsidiary would carry out operations on its own, but that is not effective in operation. In this sales structure, we would like to work together as One Mani in marketing, exchanging human resources, and sharing successful models.
Let me introduce how we will promote the Global One Mani sales structure. Allow me to direct your attention to the diagram on the top right. Up until now, Mani carried out sales to more than 120 countries worldwide through trade from Japan. Over the years, we have established local subsidiaries in Vietnam, China, India, Malaysia, and the U.S. As shown in the graph on the left, having a local subsidiary allows us to create stronger touchpoints with customers and achieve very high penetration levels. In light of this, we want to carry out sales efforts close to customers in each region. Naturally, creating local subsidiaries for each and every region is a slow and time-consuming process, so we have decided to operate under a five-region global system. Additionally, we view partnerships and M&A as a crucial part in putting in place this system.
Another crucial thing is that as a company with a strong R&D component, we should overwhelmingly strengthen our ability to create products. We need to achieve unrivaled capabilities in this area. First, we will work to improve development speed. Senior Managing Executive Officer Fukumoto has shown great skill in this area, and our first initiative within this scope is having the development time required to come up with our vitreous forceps product. Second, we will carry out innovation in the R&D process. Up until now, we had worked to build relationships with KOL doctors, and we'll continue such efforts going forward. Furthermore, previously, Mani would carry out product champion type development, that is, a type of development where a single technical engineer covers the entirety of the development process.
This development scheme was well-suited for us at Mani, but it also had some drawbacks in that this process is too dependent on a single person and is also slower. We have therefore shifted to a form of concurrent development by teams, especially concurrent development between R&D and manufacturing. Another important area is open innovation. Within this scope, we have already started limited partnership investment in VC firms to explore venture capital opportunities. Lastly, we seek to strengthen long-term research. In particular, we are carrying out joint research with the National Research and Development Agency for the development of next-generation materials like nickel-titanium, etc. We want to utilize these new next-generation materials in products like JIZAI. Another important element is manufacturing capabilities that only Mani can provide.
It was this process that over the years delivered success cases in the form of products like our ophthalmic knives, and Chairperson Saito is currently leading our efforts to go back to Mani's roots. Mani tends to be a late entrant to new markets, as historically, we usually wait to see what the competition is doing before taking the plunge, leveraging Mani's unique capabilities to develop superior products perfectly tailored to doctors' unmet needs. This process involves three elements. The first is problem-solving ability. Here, for example, we take a unique scientific and numerical approach to describe sensation and motion in the way doctors use our instruments. Second, we take this data and leverage our technical capabilities to create products reflecting these insights. Third, we pride ourselves in our ability to persevere and never give up.
In summary, we are in the process of refocusing on these core elements to carry out manufacturing. Next is the enhancement of business infrastructure. Within this, we will strive for operational excellence, shown here on the left. More specifically, we will promote S&OP reform, strengthen global regulatory processes, carry out initiatives for DX, and optimize costs overall. We also focus on human capital management as we seek to develop and acquire human resources to implement growth strategies. Next is the topic of capital allocation. The left half of the waterfall chart shows the capital allocation plan for the four years from fiscal years 2022 to 2025, and the right half shows the plans and targets for the following four years from fiscal years 2026 to 2029. We use our own proprietary metric called core operating cash flow, calculated by adding back strategic investment within SG&A expenses to operating cash flow.
You can see this distinction in the second vertical bar from the left. More specifically, the bar is divided into two sections. The bottom one corresponds to operating cash flow, and the second one to strategic investment within SG&A. As you can see, over the past four years, we allocated significant amounts to investment in manufacturing, especially toward the construction of our smart factory. Production investment and others therefore came to 14.6 billion JPY. We expect the investment amount to go down this year. Over the next four years, we expect core operating cash flow to grow to around 50-60 billion JPY, and we will be using this cash flow toward further growth investment. We will also advance R&D and sales investment and strategic business investment. Additionally, we are committed to continuing to raise dividends at a steady clip in order to return value to shareholders.
Finally, I will now explain about our approach to management conscious of the cost of capital and the company's stock price. The figures as of August 31, 2024, are shown here at the bottom. Over the past three years, we recognize that ROE, PER, and PBR have all seen a slump and have stagnated a bit. In our work to improve these metrics, we broke down this problem into two points that are important to Mani. One is to improve asset turnover. The other is to raise the expected rate of return. We have received ample feedback from stakeholders regarding asset turnover, urging us to put our cash on hand to creative uses. As I mentioned earlier on the topic of capital allocation, we will be taking on a more strategic approach and directing this cash to growth investment. Another important concept is global cash management.
We have quite a large amount of cash spread out among our local subsidiaries, so we want to optimize things on this front as well. In terms of balance sheet optimization, we are also looking to improve the CCC. Lastly, we will work to create growth expectations by executing necessary initiatives on our own and through a proactive dialogue with stakeholders.
We are targeting JPY 50 billion in net sales, JPY 15 billion in operating income, and an ROE of 16% for fiscal year 2029. These were originally the targets for fiscal year 2031, which we are now pulling forward by two years. These targets are a bit ambitious, so I request your vote of confidence in our ability to make the numbers. Last is the summary. First, our plan is to accelerate growth by setting the medium-term management plan as a four-year plan.
Second, we believe respecting the values that have built Mani's strengths to date will allow us to maximize our potential. Within this, we will execute initiatives, enhance the management foundation, take on new challenges, and execute strategic investments. Third, we believe we are at a pivotal turning point for us as over the next five years, Mani seeks to reach JPY 50 billion in sales and ultimately JPY 100 billion.
To this end, we will discuss a bold growth strategy for the future. Fourth, we expect to be able to announce the next medium-term management plan around July to September 2025. We look forward to relaying the details to stakeholders, so we request your continued support and understanding of Mani's corporate activities.
This concludes today's presentation.