They’re in the diaper business.
Bemax Inc. (OTC Pink: BMXC) manufactures disposable baby diapers in the United States and exports them to developing markets in Africa and Europe.
With birth rates continuing to rise, the baby diapers market shows no sign of drawing back. According to a study from Grand View Research, the market could reach $16 billion by 2022 in North America alone, but is there enough room in the market for a small company like Bemax to make an entrance?
Bemax reported $115,153 in revenue for six months ended November 30, 2016, which is an increase from $65,219 for the corresponding months in 2015, but the company is held back by a lack of capital. In fact, the company saw a significant drop in revenue for the second and third quarters of 2016 precisely because they didn’t have enough capital to fulfill their purchase orders.
The good news is that the purchase orders are coming in, and from Bemax’s perspective, an increase in purchase orders is a good indication that demand is high.
On January 25, 2017, CEO Taiwo Aimasiko announced a reduction of Common Shares by 33.21%. This is a classic supply and demand strategic move. More people want their stock, but now that their stock is limited, their stock price could potentially go up.
Having more shareholders will put Bemax in a more fruitful position, but the company is not shying away from producing revenue.
Bemax announced that they are gearing up to launch their two private label brands on Amazon.com on April 4, 2017. This is a great move to initially enter the U.S. market, with the intention of pursuing other retail outlets thereafter.
A lack of non-dilutive funding and a pink sheets listing are not the only challenges this company is facing. The other big hurdle is to position themselves next to major brands like Huggies ®, Pampers, and Luvs; brands that have been selling on the shelves for decades.
The Honest Company is one of the few in recent years to penetrate the market. Not only are they backed by a huge celebrity name, but their products boast organic, non-toxic materials which is unique enough to leverage their company up the ladder.
While there really is not a lot of information on Bemax products themselves, the company is worth keeping tabs on to see if they are able to exist in a heavily competitive, billion dollar industry.