Shares of Singapore commodities firm Olam International (OLAM.SI) rose as much as 3.6% on Friday after it said it has entered a joint venture to set up a US$200 million ($261.7 million)  sugar refinery in Nigeria.

At 0134 GMT, Olam shares were up 3.3% at $3.17 on a volume of 3.5 million shares.

Olam, in which Singapore state investor Temasek Holdings (TEM.UL) has a 14% stake, said it controls 80% of the venture, while Lababidi Group, which has various businesses in sub-Saharan Africa, holds the remaining 20%.

 

UOB Kay Hian said it expects lower execution risks for Olam the firm has developed capabilities in the sugar business through its investments in sugar milling in India and sugar refining in Indonesia in the last few years.

 

“This investment adds to the pipeline of projects coming on-stream and will provide further visibility into Olam's growth drivers moving forward,” UOB Kay Hian said in a report.  

 

The brokerage maintained its “buy” rating and target price of $3.80.