As opposed to the in-situ polymerization technique, downstream compounding of polyamides (PA) and nanoclays to make polymer nanocomposites with enhanced properties poses some challenges. The clays need to be modified with surfactants, which may migrate into foodstuff, in the case of food-contact film applications. The costs of such modifications in turn, may result in commercially unfeasible products. Water assisted extrusion has been employed as a mitigation strategy. In this study, water-assisted extrusion of polyamide and unmodified South African Bentonite was carried out in a co-rotating twin screw extruder with L/D of 40. Small angle Xray scattering (SAXS) studies revealed better clay dispersion in the products processed through water-assisted extrusion of PA with unmodified clays (process A) when compared to the normal extrusion of PA with organo-modified clays (process B). Furthermore, material properties (e.g. thermal stability, clarity etc.) and performance (e.g. oxygen barrier) was marginally better in the case of process A. For the first time, cost saving benefits of water-assisted processing of PA/South African Bentonite nanocomposites is illustrated. For a PA/clay masterbatch with 30% inorganic content, process A resulted in a typical material cost reduction of ~32% over process B. In conclusion, with such cost reductions and the elimination of concern for leaching of surfactants, process A offers a more suitable business case and could be employed to fabricate films for barrier applications. Keywords: Water assisted extrusion, Polyamides, South African Bentonite, Process cost savings