Johannesburg, South Africa — A South African former nurse who has struggled for more than a decade to run a hospital linen business is poised to launch a new manufacturing and marketing model that holds the promise of profits for her and for her former competitors.

Nonhlanhla Mphachoe is finding a new way to make and market hospital sheets, patients’ pajamas and operating-room clothes with help from the U.S. government. This new way of doing business could be a revolutionary commercial breakthrough in South Africa.

Mphachoe has developed a franchise model that includes all aspects of making and selling hospital linen products.  It is a pioneering initiative — the first such franchise developed by a black South African woman.

The South African government advocates economic empowerment for blacks, and women in particular, but in this case it was the U.S. government that provided the needed help.

“The Department of Trade and Industry and the Franchise Association of South Africa told me they could not help me,” Mphachoe said.  “Without help from the United States, I could never have done this.”

Through trial and error, a disheartening market collapse and guidance from South African International Business Linkages (SAIBL) — which focuses on helping predominantly black-owned, small and medium-size South African businesses to grow — Mphachoe has put together a computer-based system that encompasses all aspects of her hospital linen business: manufacturing, suppliers, customers, internal administration, stock management and accounting.

“What Nonhlanhla has achieved is nothing short of astounding,” said Tina Dooley-Jones, an official with the U.S. Agency for International Development (USAID), which runs the SAIBL program.  “Her creation of her franchise involves work force development and job creation, the very things that the South African government wants to achieve through its black economic empowerment policies.”

The unemployment rate among South African blacks is about 40 percent.  Small and medium-size businesses are the sector of the economy that holds the biggest potential for job creation.

After being educated as a nurse and working in hospitals, Mphachoe opened her company, CTU Supplies (Pty) Ltd., in 1996 — two years after the arrival of democracy in South Africa.

During the next six years, she built up her client base to 185 hospitals and clinics around the country, going through cycles of hyperactive booms and disheartening busts, until the biggest bust — at least in Mphachoe’s hospital linen sector — occurred in 2003.

“The government declared its local procurement policy.  That meant that the hospitals in all the other provinces except this one [Gauteng, where Johannesburg is located] stopped buying from us,” Mphachoe said.

Her business plummeted to near bankruptcy; she laid off workers and survived on orders from Gauteng province.  “That’s when I met SAIBL and began to learn structured business practices.  Until then we were out in the market, competing without being organized,” Mphachoe said.

In the early years she could not guarantee product quality or time of delivery because of the unpredictability of her suppliers and the erratic, wasteful practices of manual production.  The inefficiencies kept profit margins thin.

SAIBL brought in consultants who taught CTU employees how to raise their manufacturing standards to international levels.  The introduction of computer-based manufacturing processes brought advances in efficiency and profitability.  For example, when marking and cutting of fabric became automated, one cut of fabric applied to two garments.  “It made perfect sense,” Mphachoe said.  “We were not aware of it before.  Computers have allowed us to maximize our use of fabric so there is no longer any wastage.”

Penrose Nconco, the SAIBL mentor of CTU Supplies, said a computer-driven operation can mark and cut 50 garments in one hour, compared to one or two garments that could be done manually.

Parallel advances were made in administrative and accounting practices.  “Before, everything was kept in my own head.  That meant that everything would stop without me, and our office did not have good records.  Thanks to SAIBL, we learned all these processes,” Mphachoe said.

The hospital linen business is a multimillion-dollar industry in South Africa, and local upstarts are scrambling for the provincial contracts that once went to Mphachoe.

“The newcomers to the industry are facing the same problems that I did several years ago.  What I am doing is packaging all my knowledge about the business into one software program that will show them how to run things from A to Z.  The South African government now understands what I am doing and is cooperating with me,” Mphachoe said.

If Mphachoe’s franchises take root, the South African trade authorities predict, 1,350 jobs in hospital linen production will be created in the next five years.

Commercial clothing companies also have shown interest in Mphachoe’s franchise.