BK Birla-led Century Textiles is ramping up cement capacity to 12.8Mta by end-FY14 even as it described the present over-capacity situation as a major concern for the sector.

"The (Manikgarh Unit-II of 2.8Mta capacity) plant is expected to be operational by March 2014. After expansion, the company's total cement manufacturing capacity will stand increased to 12.8Mta," Century Textiles said in its annual report.

The company has around 10Mta capacity now at its four existing plant locations in Chhattisgarh, Madya Pradesh, Maharashtra and West Bengal. The Manikgarh plant in Maharashtra currently has 1.9Mta of capacity and following the completion of the brownfield expansion, this will increase to 4.7Mta. Commissioning of the plant with extended capacity was supposed to be over by the end of 2012-13.

However, it was delayed due to slow civil construction activities. "The work schedule of civil construction activities at Manikgarh cement expansion was adversely affected due to incessant rains in 2012. An acute shortage of natural sand has also delayed progress of the project work," it said.

Century Textiles has also decided to increase the planned captive power plant capacity of the plant to 60MW from 40MW earlier to suffice the needs of the facility even after the expansion.

"Environment clearance from the Ministry of Environment and Forests for the 60MW captive thermal power plant has been obtained," it said.

Meanwhile, the company said though the pace of capacity addition has slowed in recent times, surplus capacity is still a major concern. Lacklustre demand has caused a part of the existing capacity to remain idle.

India's installed cement-making capacity was over 340Mta against the target of 298Mta at the end of the terminal year of XIth Five-Year Plan, resulting in surplus capacity.

On the other hand, cement industry's growth rate fell from 10.5 per cent in FY10 to 6.7 per cent in FY12 and again to 5.5 per cent in FY13 due to slowdown in the construction activity and deceleration in realty sector, the company said.