Leading British cafe chain Costa Coffee, a part of the £1.8 billion Whitbread Plc, has entered into a franchise agreement with the RKJ Group for opening 300 outlets in India over the next six years with an investment of Rs 150 crore (Rs 1.5 billion).

RKJ Group's Ravi Jaipuria said the first outlet would be coming up in the Delhi region by March 2005.

The plan is to open 20 outlets in the first year in the National Capital region and (we) will be investing Rs 40-50 lakh (Rs 4-5 million) per outlet," he added.

The fast-food sector is projected to grow at close to 40 per cent and with a burgeoning middle-class in the region of 30 crore (300 million) closely inclined to lifestyle concepts and brands, sale potential here is huge, Costa's franchise and commercial director Nick Williams said.

As per Costa's agreement with Devyani International, a part of RKJ Group, which manage fast food joints like Pizza Hut and Cream Bell, the UK group will be supplying the coffee beans from its roastery in England, besides parting with its know-how.

About pricing the new coffee, Jaipuria said it would neither be too high nor too low.

He said the company would initially be focussing on the northern markets of the country and will slowly move into other parts of the country.

Jaipuria said unlike Pizza Hut they were expecting Costa Coffee to break even early -- in two years from its launch.

Williams said the company would be setting up a roastery in India in the next 12-18 months at a cost of £3 million to cater to its Indian operations.

The roastery will have a capacity of 20-30 tonne a week, he said.

Costa is currently on an expansion mode with an ambitious target for opening 2,000 outlets across the globe over the next five years, he said.

"Costa's expansion into India is a significant milestone in fulfilling Whitbread's vision for Costa to become a truly international brand," the company CEO Alan Parker said.

He said the chain currently operates more than 500 stores in Europe as well as trades across the Middle East -- from Egypt to Dubai -- and has just entered China also.

We also plan to open outlets in Ireland and Cyprus in the next six months, he added.

The UK's number one coffee chain, which supplies coffee to the Westminster -- the British Parliament -- had a sales turnover of $256 million in the last fiscal.

He said the company sources and buys its own beans from all over the world and had a roastery output of 1,612 tonne in 2003-04.

The parent Whitbread Plc, which acquired Costa in 1995, is one of the FTSE 100 companies and owns UK's famous brands like David Lloyd Leisure, Marriott Hotels of UK, Premier Travel Inn and Whitbread Restaurant.