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The physicians of Myddfai, a small village nestled just to the west of the Brecon Beacons in Wales, were famed far and wide for their healing powers in the 12th century and started a dynasty that lasted for 500 years.

Now the herbal traditions which made Myddfai famous, together with the artisan crafts and beauty of the area, are inspiring a new generation of products under the Myddfai brand - the rural business started by the community's Village SOS project.

The products – including teas, greetings cards, herbs and a range of toiletries – have already been well received by a wide range of trade customers. But this trading arm of the Myddfai product is also feeding into the big vision of the new community hall and visitor centre, a splendid, energy efficient and environmentally friendly building which replaced what had been the village's only secular meeting place.

"Myddfai had lost all its amenities – its school, its post office, its shops, its pub. All we had left was our much beloved but crumbling little building," says Hugh Davies, leader of the Myddfai project, of the previous hall, a prefabricated building put up in the early Fifties and which was expected only to last for around 20 years. "It was cold and damp, it was actually dangerous – the kitchen was effectively condemned. In the winter condensation would not only run down the windows, but the walls too. The one thing that never decayed in Myddfai was its spirit."

Hugh and a committee had been trying to raise money for several years to replace the hall, with some success from the Welsh Assembly Government. But until Village SOS came along with its Big Lottery Fund grant of £435,340, there was little hope of attaining enough additional funds. The ambitious building project, which Hugh believes will play host to all sorts of money-making activities, such as conferences, and entertainment productions, also has the commercial activities of the Myddfai trading company underpinning its income, making the hall sustainable for the longer term.

Sustainability was the watch word for the hall and its specifications are impressive – it is "insulated to the hilt," says Hugh, and draws heat from underground as well as having solar panels generating power for the heating system, some of which is ploughed into the national grid, providing an added income.

Besides the main hall space itself, it also boasts an exhibition space, cafe and a pretty shop, where the Myddfai products sit alongside work from local craftspeople for sale, and a "continuity wall", rebuilt out of the original stone and in the exact position of the wall of one of the stone cottages which was also demolished to make way for the new building.

Though the original plan had been to keep the cottages, they weren't structurally sound, so a full demolition and rebuild was required. They too have been recycled, with some of the stones forming the wall around the site and the remaining rubble used as the foundations for the car park. "Very little has actually left the site, so there is that lovely continuity about it," adds Hugh.

For their Village Champion Jo Gideon, a local councillor from Ramsgate whose own company provides training and mentoring to support businesses through change and growth, the Myddfai project was the right fit for her. Even on her first visit, when she sat in the freezing cold old hall with some of the community, "it just felt right", she says.

And she had no qualms about fitting in with the quirks of a small Welsh village, her mother was Welsh and she spent a lot of time in Wales during her childhood. "A lot of the challenges specific to Welsh communities I felt I could handle at a deeper level," says Jo. "I used to stay on the farms for two or three weeks every year and I would go to chapel three times on Sunday and attend Eisteddfods (Welsh performance festivals) and so somewhere in my DNA the understanding of how Welsh communities differ from other communities was there.

Jo says living in Myddfai for the year also made her more aware of the extra problems rural enterprises face because of their isolation. Myddfai has no mobile phone reception and when a sheep trailer drove through an overhead line, Jo had no static phone line too for eight weeks. "Rural businesses really do have extra hurdles to climb," she says.

One of those was getting enough volunteers to help make the gift business flourish, packing soaps and blending teas in people's houses once the old hall had been demolished, which strengthened the community bonds, says Jo. "People got to know each other better, even those who had lived in the same village for 30-odd years," she says.

And she has nothing but praise for those who not only volunteered, but for everyone, including the builders, who were determined to deliver on time. "There was a month in the winter where it was – 17C at one point," says Jo. "The builders were literally heating the sand up in the kitchen to keep things moving."

There has been some criticism that the Myddfai products don't use ingredients harvested from the area but Jo says every product has gone through Myddfai hands.

"Our philosophy is we will always use local products first, and then those from Wales, but you can't get everything down the lane from a roadside bush. We set up the Trading Company to produce in volume and be a commercially successful social enterprise. That means foraging in the hedgerows is out, but everything is chosen and inspired by the values of Myddfai."

Hugh agrees it was time Myddfai finally took ownership of its famous physicians. "It was always interesting to me that other organisations and places and towns had sold Myddfai very well, and yet we were watching Myddfai decline – the actual home of the physicians wasn't benefitting from its own history and heritage," he says.

Creating jobs was part of the Village SOS ethos, and that's something former optician Mike, now MD of the Myddfai Trading Company, has benefitted from. From travelling almost two hours every day to locum work in Cardiff, he can now work locally, pick up his son from school and even have time for a spot of fishing in his day.

"The hall is a first step in the total regeneration of the village. If the Trading Company can start to expand, it will create new jobs and new horizons for us to produce our own goods," says Mike.

"Community spirit had been diluted, definitely," he adds. "But now we have people really looking forward to coming to the volunteer meetings – they can have a chat and a cup of tea, put the world to rights. It's an integral part of attempting to rebuild the community together."

And volunteer Carole Nunnerley agrees. "The community spirit was going to sleep. Now it's waking up!".