The Caithness distillery, owned by local husband and wife team, Claire and Martin Murray, started trading in 2014 after building a small gin and vodka distillery in the village of Dunnet. Since then, a warehouse and a visitor centre have been built following an increase in demand and the company now exports its products to more than 20 countries.

HIE’s investment will support Dunnet Bay Distillers to develop a bottling plant and warehouse for the gin and vodka operations near to Castletown Mill, which was recently purchased by the firm with a view to developing it into a new destination whisky distillery. This will also free up space at the Dunnet site to increase production of gin and vodka.

The building will incorporate an air source heat pump system for heating and cooling the premises. It also faces south to maximise the potential for a solar PV array on the roof. The new equipment uses the latest technology to maximise energy efficiency.

The expansion of the distillery business is expected to boost the rural economy in Caithness and benefit the local community by providing employment opportunities.

Nineteen staff are currently employed at Dunnet Bay Distillers and four new jobs will be created as a result of HIE’s investment.

The money awarded by HIE includes £90,100 Green Jobs funding, which is being distributed by HIE on behalf of the Scottish Government in light of the low carbon and energy saving benefits of the project.

Hilary Budge, development manager at HIE, said: “Distilleries are an important part of the Highlands and Islands food and drink sector and provide valuable rural employment while contributing to community resilience. As well as having an innovative approach, Dunnet Bay Distillers has shown great initiative in developing its business with a strong environmental ethos, while maintaining high quality products.

“Creating new jobs in the area will also help the wider efforts to attract and retain working age people in the area. We are very pleased to be able to provide this support and look forward to continuing to work with them as they develop the business.”

HIE also supported Dunnet Bay Distillers through the agency’s Graduate Support Programme, which helps companies in the Highlands and Islands by offering 12-month, well-paid work experience placements in key sectors that span a wide variety of industries.

While working at the firm, graduate Craig Chambers produced a new gin expression called Rock Rose Gin Smoked Orange which has just become part of the core range, and brings the number of gins in the main range to nine.

Mr Murray, co-founder and co-director of Dunnet Bay Distillers, said: “We’re excited at the prospect of regenerating the Castletown Mill, a fine 200-year-old building which has been empty for many years. The Mill will become a Caithness landmark once again and its development will transform our already successful business.

“We are so grateful to Highlands and Island Enterprise for their support, and we look forward soon to launching our website for the project which will explain more about how local people can get involved.

“We aim to make it into a local destination distillery and we intend to make this section of our business every bit as environmentally sustainable as the rest. Our strong environmental ethos is as the heart of what we do.”