Lack of funds and bad off-farming skills are collapsing shrimp farms in Hai Phong City and Thai Binh and Thanh Hoa provinces in Vietnam.

Four out of six aquaculture projects in Hai Phong, occupying a total area of 2,000 hectares worth VND400 billion (US$25 million) may shut its operations.

A Hai Phong official said the projects have generated vast employment opportunities in the area and the imminent failure will be a major blow to the local economy.

The 80-hectare industrial shrimp farm run by Hai Phong Seafood Export Company is desperately seeking funds after the city's People's Committee have withdrawn support to the project, citing the firm's inefficiency and poor management.

Total investment for the project was earmarked at VND46 billion (more than US$2.8 million), but only VND7 billion (US$431,419) has been raised. While the company is looking for further investment, it has suspended its shrimp farming operations, and instead raises freshwater fish.

Viet My Technology Company's project to build an aquaculture farm has also failed due to poor management.

Company director Dinh Van Hong said the VND76 billion (US$4.75 million) project was meant to occupy an area of 988 hectares. However, Viet My already spent VND100 billion (US$6.2 million) to build a 330-hectare fishing area, including a 100-hectare industrial shrimp farm and a 200-hectare fish farm.

In the northern province of Thai Binh, a VND33.5 billion (US$2 million) project to build a frozen seafood processing plant on a 30,000 sq.m site, approved by the provincial People's Committee in July 2001, has yet to be completed.

The project, which was financed by Thai Thuy District's People Committee and Thai Binh Seafood Company and meant to process around 3,000 tonnes of seafood a year, was supposedly opened in 2004.

So far, only the first phase of construction has been completed. The Thai Binh Seafood Company did not continue its second phase, stating it would have to come up with a further VND20 billion (US$1.25 million) to buy a hi-tech production line.

The project has since been sold to the Taiwanese firm Rich Beauty Viet Nam for just VND2.4 billion ($150,000).

On the other hand, six industrial shrimp farm projects worth VND89 billion (US$5.56 million) in the central province of Thanh Hoa and occupying a total area of 450 hectares are also on the verge of closing operations due to severe shortage of funds. The project started in 2001.

Nguyen Chu Hoi, director of the Vietnam Institute of Fisheries Economics and Planning, under the Ministry of Agricultural and Rural Development, blamed the lack of supervision for the failure of numerous seafood projects.

Deputy director of Thanh Hoa Province's Fisheries Department Dang Van Thong said aquaculture projects made good economic sense, but many had been implemented too hastily, without adequate planning.

Hoi said the lack of planning is the main reason behind the failure of the frozen seafood processing factory in Thai Binh.

He said firms should realise that money needs to be invested in advanced technology when building aquaculture farms.