The fire has forced the closure of local businesses and a high school due to the plumes of potentially toxic smoke spewing from the scene.

The fire started in a pallet of hand sanitiser stored outside buildings belonging to Weston Aluminium in an industrial complex at Mitchell Avenue, close to town, about 10am on Sunday.

It spread quickly, fanned by strong winds with gusts up to 45km/h sending thick plumes of black smoke high into the air and across the town.

The factory has a significant store of aluminium dross on-site which is highly reactive and can become explosive when wet, along with other potentially hazardous materials including hand sanitiser, paint and ethanol.

Fire and Rescue NSW Deputy Commissioner Jeremy Fewtrell, who is leading a team involving the departments of health and education, the Environment Protection Agency, and police, said fires are continuing to burn in external piles of material.

"The crews first effort will be extinguishing those, they are in a couple of locations around the site and quite extensive," he said.

"They will be using plant and other machinery to help break up those piles and get access to where the fire's burning deep below, and extinguish those. Those activities should go a long way to reducing the amount of smoke coming off the site."

The next challenge was the significant structural damage to the buildings, complicating their efforts to access and extinguish any fires still burning inside the buildings.

"We'll be utilising the services of a structural engineer to ... guide us around where it is safe and how to we safely access the building to look at any extinguishment that is required inside those buildings," he said.

It would be a "protracted incident", he said.

"We are obviously going to move very carefully and safely throughout all this."

A fire investigator who was on scene on Sunday afternoon and early Monday morning to make some initial observations and talk to workers on scene and the first arriving firefighters was continuing to investigate along with police forensics and detectives and it was too soon to say whether the fire was deliberately lit, he said..

Superintendent Fewtrell addressed a meeting of about 150 local residents, business owners, teachers and community members at Weston Workers Club to provide an update and answer questions at 11am.

An emergency operation centre has been established on-site as well as an operations command centre at Kurri Kurri police station to coordinate the effort with alerts going out to the community as experts continue to use atmospheric testing equipment to monitor air and water quality.

People in properties affected by the smoke have been advised to remain indoors and to keep their doors and windows closed, with air conditioning recirculating, and to avoid the smoke wherever possible. The industrial estate remains closed off, while some local roads have also been close to keep people well away from the scene.

"It is being monitored very carefully," he said. "In the last 24 hours and over night we have had our scientific officer and also HAZMAT technicians with a range of monitoring equipment moving around Kurri Kurri and taking readings to ensure there are no major issues there, as a precautionary measure."

Hunter-based NSW Fire and Rescue units were joined by NSW Rural Fire Service units as well as pumps from Sydney and the Central Coast to help control the fire which spread from the pallets of hand sanitiser to nearby grass and bush, which was extinguished before other material in an adjoining building also caught fire after travelling along a conveyor belt between buildings.

James Camptkin, supply chain manager for Wine Selectors, situated in a neighbouring industrial complex, said the closure of his business was costing thousands of dollars of per day, and affecting his team of about 30 workers.

"I turned up ... at a quarter to seven, saw the road closures, that's when I found out," he said. "All of our employees turned up to start work at six o'clock and started ringing to say we can't get through. So some of them had received text messages because they live close."

Mr Camptkin, who lives in Newcastle, said the closure was causing "very significant" losses for the business.

"We have thousands of cartons of wine that we send out every day, so every day that doesn't happen we have to try and make that up somehow," he said, and there were scores of other businesses in the immediate vicinity which were being similarly affected.

Weston Aluminium managing director Garbis Simonian said on Sunday he believes the fire may have caused millions of dollars worth of damage, destroying two buildings about 1000 square metres each. They stored a range of materials including hand sanitiser and paint, while another building not involved in the fire housed an incinerator used to burn paint, medical waste and other types of waste.

All of the equipment was housed in separate buildings, he said.

Mr Simonian said the fire was lit in three separate locations and the pallets of hand sanitiser were wet and there was no way they could somehow have been ignited accidentally.

"It's a crime scene. Luckily no one's hurt."

Mr Simonian said the aluminium dross which people were concerned about was not as reactive as was feared but he was continuing to work closely with emergency services to ensure the site was properly managed.

"The aluminium dross itself, is not explosive especially if it's been in a fire," he said on Monday.

"We also have bays in the building up the back so what we are going to do is move it ... all that happens is it gets wet is it gets a bit smelly ... so there's no problem."

The majority of the material was hand sanitiser and paint, and they were not toxic, he said.

"There may have been some chemicals in the site, normal stuff that you would have, and some gas bottles, that's just operational stuff. But the plant was shut on Sunday morning, someone broke in through the fence and lit the fire in three places. I am not going to say a hundred per cent but it sure looks like arson. So the police are investigating ... but if you have got people who are arsonists .. what are you going to do?

"We are going to review our processes and take further action to improve the security so this doesn't happen again. But at the end of the day, if people are going to break into your plant and burn the place down, what can you do? We've done everything we can and we will improve it. We will do everything right and we will work with the EPA."

Meanwhile, police have issued an appeal for public information, and urge anyone who may have information or footage, including dashcam, from the area to contact Hunter Valley Police or Crime Stoppers on 1800 333 000.

Residents of Kurri Kurri and surrounding areas are advised to remain indoors and keep their doors and windows closed as a fire continues to burn at the Weston Aluminium complex.

Fire and Rescue NSW Deputy Commissioner, Jeremy Fewtrell said conditions have improved significantly overnight, but as it is a "protracted incident", no timeline could be given on when the fire will be completely extinguished.

He said almost 300 firefighters were rotated through the scene in the 24 hours since the blaze broke out.

Firefighters are now using heavy plant and other machinery to extinguish pile burns around the property. The piles include materials and debris such as metals, plastics and rubber.

Fire and Rescue NSW scientific officers and HAZMAT have been on the scene.

As a precautionary measure, residents are still advised to stay indoors, keep their doors and windows closed, and if using their air-conditioners, to have it recirculating rather than bringing fresh air in.

Deputy Commissioner Fewtrell said a Fire and Rescue NSW investigator made initial observations in the last of Sunday's light and will continue to work with police forensics and detectives. He said it was too early to tell if the fire was deliberately lit.

Fire and Rescue NSW representatives addressed a community meeting at Weston Workers Club at 11am Monday.

Kurri Kurri Library is closed today, as is Kurri Kurri High School.

MORE than 180 firefighters, including reinforcements from Sydney converged on a fire at Kurri Kurri where they have battled winds gusting up to 45 km/h to contain a blaze in an industrial complex.

Black plumes of smoke poured out from the Weston Aluminium buildings on Mitchell Avenue where the fire started in a pallet of hand sanitiser about 10.40am Sunday.

Hunter-based NSW Fire and Rescue units were joined by NSW Rural Fire Service units as well as pumps from Sydney.

It started out as a small fire in some pallets of hand sanitiser outside the business, then caused a small grass and bush fire which was extinguished before other material in an adjoining building also caught fire.

Weston Aluminium managing director Garbis Simonian said he believes the fire may have caused millions of dollars worth of damage, destroying two buildings about 1000 square metres each, at the back of the complex. One stored a range of materials including hand sanitiser and paint, while another building housed an incinerator used to burn paint, medical waste and other types of waste.

All of the equipment was housed in separate buildings, he said.

"It's highly likely it was arson because the place was closed, and this stuff doesn't burn by itself," Mr Simonian said.

"It's a crime scene. Luckily no one's hurt."

Police issued warning close to 3pm about the "large industrial fire" which started in an unoccupied business and did not pose a risk to residential properties.

Hunter Valley Police officers were on scene assisting with traffic management with local traffic diversions in place, causing some traffic delays. Motorists are urged to avoid the area where possible and check www.livetraffic.com for updates.

By 4pm Sunday, more than 180 firefighters were battling the blaze, which was expected to continue overnight.

Residents in the area are urged to limit their exposure to smoke outdoors (especially those with respiratory conditions), ensure windows and doors are closed to prevent smoke infiltration and remove any washing from clotheslines.

Fire and Rescue NSW Assistant Commissioner Community Safety, Trent Curtin, said on Sunday afternoon firefighters would be on site all night and likely throughout Monday.

"We're currently working with the police, ambulance and the EPA to make sure we look after the environmental hazards, to make sure we manage traffic and people moving in and around the area, and to make sure we continue to connect with the community," he said.