The singular is correct
production capacity
is the name of an operating item. Consider
Companies will increase their headcount.
Companies will increase their investment spending.
Companies will increase their parking lot size.
in none of these similar examples would the plural be used.
Some people confuse the terms collective noun with mass noun or uncountable noun. As a simple, relatable example, herd is a countable, collective noun. You can have one herd or multiple herds, even though a single herd is composed of multiple members.
Twenty cows are crossing the road.
A herd of cows is crossing the road.
Three herds of cows are crossing the road.
Likewise with staff. It is also a countable, collective noun. Each company has one staff, which is all of its employees as a group. Two separate companies have two separate staffs.
Individual:
Collective:
Uncountable:
Uncountable nouns can be used countably in informal language.
I'd like two waters please.
In formal language, they must be qualified by an amount.
I'd like two glasses of water please.
I'd like two drinks of water please.
I'd like some water please.
Note: there are many other meanings of waters that don't apply here. These usages are always plural and are rarely counted. e.g. the waters of Finland. We don't say two waters of Finland and the water of Finland has a different meaning.
Collective nouns are always countable, however, in British English, even in formal language, they may be used either as singular or plural without changing form (see elsewhere for the full details):
The staff is very happy (one staff)
The staff are very happy (the members of one staff)
The staffs are very happy (multiple staffs)
Best Answer
Yes. Use the plural to denote separate characters, individual characters. The singular would indicate that the people involved share the same character -- a reasonable idea, but not the one that you intend to express. Character as an aspect of personality is just as countable as those personalities themselves.