A proposal to build Shetland's first-ever commercial distillery has taken another step forward today with the announcement that Shetland Enterprise has approved funding for the project.

The local development agency has made a commitment to provide a funding package totalling £491,000 towards the plan to build Shetland's first single malt whisky distillery, subject to the remaining funding for the £3.8million project being secured by the business.

Blackwood Distillers Ltd, the company taking the project forward, hopes to attract significant further private sector backing for the project at Catfirth, near Lerwick.  In addition, it is proposed that European funds totalling £635,000 is applied for on behalf of Blackwood Distillers PLC by Shetland Enterprise.

The distillery would create five full-time jobs during the first year, with an additional 17 part-time jobs expected to be created in 2007 should a proposal for a visitor centre on the site go ahead.  The business already employs five people in its white spirits business, which has created a Blackwood's Gin and Vodka, and Jago's vodka cream liqueur using Shetland ingredients from local suppliers.

Ann Black, chief executive of Shetland Enterprise, said:

"This project aims to create a completely new industry in Shetland, adding significantly to Shetland's food and drink export market.  Shetland's fishing and oil industries do not provide the area with the economic security they once did, so it is vital that we look at ways to diversify our economic base.

"As well as creating several well-paid, skilled jobs, we expect there would be spin-off benefits for local companies.  And with the international demand for whisky remaining strong, the project would help raise Shetland's profile overseas, which of course fits well with the current branding exercise being carried out for the islands.

"The spirits market remains highly competitive, but Shetland's location, combined with its reputation for pure water, its peaty soils and a humid environment should combine to make a distinctive product with widespread customer appeal."

Blackwood's chief executive Caroline Whitfield welcomed the news:

"We have already attracted significant private sector backing and this grant from Shetland Enterprise is the extra vote of confidence that investors have been waiting for.
"The sales interest in export markets around the world for our new Shetland spirits shows the tremendous opportunity for first class Shetland malt and for building a new spirits sector here in Shetland. We are delighted with this backing and would like to thank Shetland Enterprise for their unstinting support right from the beginning last year. We are confident that the remaining funding required will now shortly be secured as a direct result."