Authorities say up to 100 people have been evacuated from two industrial structures as a result of the blaze.
Firefighters were called to the scene in Revesby shortly after 11am responding to multiple calls.
Black smoke can be seen billowing from the hectare-long site and Fire & Rescue NSW has warned this could affect nearby Milperra Road.
Nearly 20 fire crews have been called to the blaze while six ambulances are also on site. NSW authorities say more than 100 firefighters are battling the blaze.
Ambulance officers have set up a command post to support firefighters and evacuees.
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