Fire fighters have contained the fire in the roof of the Ravensdown fertiliser factory in Napier.
The Fire Service sent seven fire trucks and four special command vehicles to the scene at 11:37.
The fire, which started in the roof, is under control and there have been no reports of injuries.
There were occupants in the building at the time the fire broke out but all were evacuated safely.
3 News iWitness Daniel Jones, who sent in images and a video of the fire, says there is a large cordon in place because of the huge smoke plume.
He says he saw horses in the paddock next to the building and thought they could be in danger.
“I saw the horses having a bit of a panic so I moved them into the corner of the paddock but we cut the fence and moved them into the neighbour’s paddock,” he says.
Mr Jones, who was working in the area, says a digger was brought in on the back of a truck to help with the efforts to put out the fire.
The Ravensdown factory is on Severn St, just west of the town centre.