Fire and Rescue NSW Deputy Commissioner Jeremy Fewtrell has taken command of the fire and will address residents at the community hall at 11am, after addressing the media at 10am.

Close to 300 firefighters, including reinforcements from Sydney and the Central Coast, have helped mange the factory fire which started about 10am on Sunday, sending black plumes of smoke out across the town from the two buildings on fire at Mitchell Avenue.

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

It is understood the fire started in pallets of hand sanitiser stored outside the building, and spread from the pallets to nearby grass and bush, 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 on Sunday 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 on Sunday 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.

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