Olam International, a commodities supplier backed by Singapore’s Temasek Holdings, said it plans to set up a US$200 million ($261.7 million) sugar refining venture at a port in Nigeria.

Olam will hold an 80% stake in the operation with the Lababidi Group, a diversified African company with interests ranging from wheat milling to port real estate, holding the rest. Half the investment will be debt-funded, with the remainder contributed by each partner in line with their equity, Olam said today in a Singapore stock exchange statement.

 

Nigeria is Africa’s second-largest sugar consumer after South Africa, with consumption growing at an annual average of about 4.2% in the last six years to 1.6 million tons in 2009. Olam expects Nigerian sugar use to jump to 2 million tons in 2013 or 2014, the year the new venture is due to produce 450,000 tons of white sugar, the company said in a presentation today posted on the Singapore stock exchange.