Asahi Glass Company (AGC) plans to spend $400 million dollars to construct a power plant at its Indonesian subsidiary P.T. Asahimas Chemical (ASC).

AGC said the investment would enhance the competitiveness of its chlor-alkali business in Southeast Asia by reducing power rates, a major cost item of that business.

The power plant is scheduled to commence operation in 2017.

The caustic soda and polyvinyl chloride (PVC) market in Southeast Asia is projected to grow at 5% per year. Indonesia, Thailand and Vietnam, where AGC has bases for the chlor-alkali business, account for 70% of demand in the market.

This investment will help reduce the cost of electricity and help AGC become more competitive in the Southeast Asian region.

The power plant to be constructed by AGC will be a coal-fired power plant capable of generating 250MW of power. It will use uses low-grade Indonesian coal, where reserve are large and easily obtained. It will adopt the environmentally friendly CFB method, which is capable of co-generation and mixed fuel burning of biomass fuel.

AGC said it positioned its overseas chlor-alkali business as one of its growth businesses. It plans to steadily take in expanding demand and aim to raise the operating profit margin of the group’s chemicals segment to 10% or more by 2017.