MUMBAI: Ahead of the onset of peak summers, a brisk business season for consumer durables companies, some AC makers are feeling the heat of the West Asia war as restricted supplies of LPG and shortage of petrochemicals are beginning to hit production, industry executives said. LPG is used in processes such as brazing of copper and curing of powder-coating while petrochemicals is key to the manufacturing of polymers which are used in the plastic mechanical parts of AC units. To be sure, there’s no major disruption on ground as of now but if things do not get better, it could be a challenge heading into the season. For consumers who will already be paying more for new AC stock which will hit the shelves around April-May on the back of price hikes, the war led supply crunch could pose an added burden on pockets. “We are facing certain challenges related to production–first is availability of LPG and PNG which are required for certain manufacturing processes in ACs and other product categories. Also, scarcity of petrochemicals. It is causing some disruption in day to day production. We are working with our vendors to curb wider impact,” said Vikas Gupta, MD (operations) at PG Electroplast which manufactures ACs and a range of other white goods for brands. Given the likelihood of an extended summer, Gupta hopes the war will subside by then, helping demand. Temperatures have already started rising in parts of India and some forecasts have hinted at the possibility of El Niño later this year. “Geopolitical tension in the Middle East has started creating some supply-side constraints across certain input materials used in AC manufacturing,” said Kamal Nandi, business head and EVP at appliances business of Godrej Enterprises Group which is working with vendors to optimise procurement strategies and ensure continuity of production. Besides limited supply of LPG, availability of key plastic raw materials like Polypropylene and Polystyrene has been meagre, accompanied by sharp price increases, Nandi said. Epack Durable is looking at alternatives for brazing copper for ACs even though that will push up the cost of production, said MD & CEO Ajay Singhania. There has been no loss in production till now but gas agencies have said that there could be challenges going ahead if supply crunch remains. The company is now focusing on ramping up induction cooktops given the surge in demand, said Singhania. New energy norms have already pushed up AC prices by about 5% with another 8%-10% hike on the back of high commodity costs, said B Thiagarajan, MD at Blue Star. “There is apprehension within the industry about supply challenges,” said Thiagarajan. The vulnerability arises from supply concentration–about 88% of India’s LPG imports come from the Middle East and that equals roughly about 54% of the country’s total LPG demand. “If disruptions continue, the supply gap could be significant,” said Sumit Pokharna, VP, fundamental research at Kotak Securities.

Nail salons are next in line for Starbucks-style expansion after decades of being overlooked by investors, the boss of the UK’s largest luxury chain has said, after clinching a £130 million valuation.

Townhouse, which runs 40 luxury nail salons in the UK, said it was targeting hundreds of new franchised sites after securing backing from the US private equity firm behind the Burger King and Tim Horton chains in China.

The new investment from Cartesian Capital will propel the expansion of the business, which was founded in 2018 by Juanita Huber-Millet and headed up by her husband and chief executive Jonathan Millet.

Mr Millet said it was capturing a turning point in the nail care industry, which is highly fragmented and has been typically under-invested in compared with other services.

“I think there is probably an element of beauty services overall being overlooked,” he told the Press Association.

“I would say there is a little bit of an element of, historically, 20, 30 years ago, finance and capital being very dominated by men, and this being a sector that primarily serves women.

“So if you’re a male private equity investor maybe 15 or 20 years ago then maybe it wasn’t front and centre of your mind as something to invest in.”

He made comparisons with industries such as coffee houses, hotels, gyms and sandwich shops, which have all expanded with the emergence of chains over recent decades.

Other parts of the beauty salon sector, such as waxing and massages, have started to grow with brands “delivering that Starbucks-esque experience” after years of the beauty services industry “lagging behind”.

Meanwhile, there are no major nail salon chains in the UK, with Townhouse entering a market that is typically led by independent and boutique shops.

Mr Millet also said the nail industry has been plagued with poor working conditions for staff, a lack of employment contracts, and even cases of modern slavery.

“In our industry there has historically been quite a lot of exploitation of workers,” he told the Press Association.

“When Covid hit, there were a lot of people in the industry who didn’t have contracts, who were just being paid cash in hand, so they didn’t get government relief.

“And we still see a lot of people, as we’re recruiting, who have worked in the industry and not had contracts – all the way through to, less pervasive but there, some elements of trafficking and indentured labour.”

Townhouse says it offers its nail technicians above-market pay, private healthcare, paid leave and structured career progression, including in the US, where it currently has a handful of stores.

The business has signed up major franchisees, with about 149 sites committed over the next five years, and another roughly 350 in advanced negotiations.

It said this would bring the chain to about 500 salons internationally and create an estimated 5,400 jobs.

Mr Millet said Townhouse sits in the “premium to luxury part of the market” with prices ranging from about £30 to £100 for each treatment.

He suggested that nail care was “more resilient” to economic downturns, adding: “We see people who may need to cut down in some parts of their lives really keep up their beauty regime because it’s that small moment of luxury.”

“It’s not affordable for everyone, but it’s a price that people are willing to pay.”

The chain is predominately focused in London but has also opened salons in cities including Manchester, Bristol and Leeds.