Cosmetics Manufacturer Defers Duty on Raw Materials to Improve Margins

Background

A Lagos-based cosmetics company was growing fast, exporting its locally formulated skincare products across Africa. But there was one big issue — they were paying full import duties upfront on all raw materials, regardless of whether the products were sold in Nigeria or not.

This created unnecessary cash pressure and eroded their margins, especially since a significant portion of their sales came from outside Nigeria.

The Challenge

• •Upfront duty payments were tying up cash
• •Margins were shrinking due to avoidable tax burdens
• •Inventory holding costs were rising as components sat idle waiting for clearance and production

The Itana Solution

Itana Trade Support helped the manufacturer redesign their import process:

• Deferred Duty Payments

  By routing imports through the zone, the company could defer duty until products were sold into Nigeria.

• Zone-Based Storage

  Raw materials were stored in bonded warehouses, reducing holding costs and avoiding unnecessary duties on exports.

• Compliant Assembly Within the Zone

  The team assembled locally and shipped to regional markets, paying duty only on items sold within Nigeria.

The Result

• •40% reduction in total duty paid, by excluding export-bound goods
• •12% margin improvement across product lines
• •Lower inventory costs thanks to zone storage and streamlined logistics