COST REDUCTION STRATEGIES AND THE GROWTH OF SELECTED MANUFACTURING COMPANIES IN NIGERIA

The problem of high manufacturing costs has led to the shutdown of many manufacturing companies in Nigeria. This study examines the relationship between cost reduction strategies and the growth of manufacturing companies in Nigeria using data from annual reports of 40 manufacturing companies quoted on the Nigeria Stock Exchange within the period of 2012-2016. 40 manufacturing companies were sampled purposively for this study. The study took changes in material cost, changes in labour cost and changes in administrative overhead as variables for cost reduction strategies while changes in turnover as the variable for Growth. Correlation analysis was conducted to determine the association cost reduction strategies and growth while, regression analysis was used to determine the impact of cost reduction strategies on the growth of manufacturing companies. Results showed a positive significant relationship between cost reduction strategies and growth of manufacturing companies in Nigeria. The study recommends that manufacturing companies should implement value analysis in order to reduce material costs and the implementation of cost reduction strategies in all manufacturing companies in Nigeria.