Malayasian Mineral Fuels And Building Materials Exports To Japan May Increase Following Disaster

KUALA LUMPUR (Bernama)-- Malaysia stands to benefit from Japan's
need to replace lost nuclear energy capacity and reconstruction efforts due to
the recent earthquake and tsunami.

In a research note Wednesday, ECM Libra said assuming complete substitution
of the 11,964 megawatts in all 14 reactors lost with Liquefied Natural Gas (LNG)
thermal plants, Japanese petroleum and LNG import demand for 2011 could rise a
further 4.3 per cent and 5.2 per cent respectively from 2010 levels.

It said, mineral fuels, a major Malaysian export item, stands to benefit
from Japan's need to replace lost nuclear energy capacity.

According to ECM Libra, Malaysia is also in a good position to take
advantage of the looming demand for building materials like timber and steel
unleashed by reconstruction efforts.

It noted the destruction of wealth in Japan will probably weigh on
purse strings, cutting the amount of disposable income and the propensity to
spend on vacations.

"However, Japan accounts for only 1.7 per cent of total tourist arrivals to
Malaysia and thus, the impact on the tourism sector is likely to be minimal," it
added.

However, over a longer horizon, ECM Libra said the need to redirect funds
internally for Japanese to fund reconstruction activities may limit the flow of
foreign direct investment (FDI) to other countries including Malaysia, which
is mainly in the manufacturing sector.