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tate-run cement maker PT Semen Indonesia is considering developing a new 200-megawatt (MW) power plant in a bid to further slash the company'€™s electricity costs.

Semen Indonesia finance director Ahyanizzaman said on Friday the company would build the power plant in Tuban, East Java, where 60 percent of the cement producer'€™s electricity consumption comes from.

'€œThe preferred location [to build the power plant] will still be in Tuban as its electricity consumption is the biggest. So, the power plant will significantly lower costs,'€ he said.

The electricity price from state-run electricity firm PT Perusahaan Listrik Negara (PLN) is currently
Rp 1,012 per kilowatt hour (kWh). On the other hand, Semen Indonesia spent only between Rp 800 and Rp 900 per kWh for its production activities in Tonasa, South Sulawesi, by utilizing its own power plant there, Ahyanizzaman explained.

Semen Indonesia would probably start constructing the 200-MW power plant next year with an estimated investment of between Rp 5 trillion (US$400.7 billion) and Rp 8 trillion, he told reporters.

Construction of the plant is expected to take two to three years.

Once the new power plant starts operating, the cement producer will have a total 230-MW power output for its cement factory in Tuban as the firm is currently constructing a 30.6 MW-power plant at the site.

Semen Indonesia aims to kick off the operation of the 30.6-MW power plant in the second half of 2016.

It was reported earlier that the firm required as much as 140 MW of electricity from PLN to operate its four factories in Tuban.

Ahyanizzaman told reporters that if the total electricity supply from Semen Indonesia'€™s power plants in Tuban exceeded the company'€™s power demands, the cement maker would partner with PLN to distribute the surplus power for industrial purposes.

'€œBy doing so, we can get additional income,'€ he said, adding that electricity costs were one of the biggest pressures on Semen Indonesia'€™s net profits.

According to its published annual report, Semen Indonesia saw its energy usage rise by 13.2 percent year-on-year (y-o-y) to 2.52 million MW per hour in 2013.

Its electricity costs during the year rose by 30.1 percent y-o-y to Rp 1.88 trillion, making up about 39.8 percent of its total costs in 2013.

While the firm has not yet published its annual report for this year, Ahyanizzaman said that he estimated that his firm'€™s top line grew by between 9 to 12 percent last year from Rp 24.5 trillion in 2013.

The company'€™s earnings before interest, taxes, depreciation and amortization (EBITDA) margin was, meanwhile, expected to slump by 1 to 3 percent this year following President Joko '€œJokowi'€ Widodo'€™s recent decision to cut cement prices, he added.

President Jokowi has instructed state-run cement producers to lower their prices by around Rp 3,000 per sack to enable the wider public to buy cement with less financial burden.