OTP was founded with a joint venture contract between Alliance One Tütün A.Ş. (www.aointl.com) and Özege Tütün A.Ş. (www.ozege.com) in 2013.
At the time there were five major packing houses in the Turkish market. Any one of the facilities was ultimately capable of processing the bulk of the total Turkish Oriental crops.
Adjacently the industry was at a turning point with increasing focus, outside of the agronomic space, on NTRM, yield and cost efficiencies together with a collective focus on product integrity. Investments in AOT and Özege facilities was required in the short to midterm in order to address the apparent inefficiencies.
With the formation of OTP, both companies were able to:
- Rationalize and monetize existing assets in a market with significant amounts of working capital and fixed assets
- Forego significant CAPEX spending for individual facilities
- Collectively invest in new generation machinery and equipment to keep abreast of increasingly stringent product specifications, industry focuses, social and environmental requirements
- Address overcapacity of production in the market
- Cost rationalization and economies of scale benefits (fixed cost dilution)
AOT and Özege remain competitors, with segregated activity in farmer base & contracting, Agronomy field force, buying and selling operations.
OTP provides services from factory receiving, blending, processing, warehousing, pest control, and laboratory through to shipment.