Smoke is billowing high in the air from a factory that is ablaze in Sydney’s south-west, with more than 120 firefighters sent to tackle the fire.

The chemical fire started just before 2pm on Tuesday at Baker and Co’s factory on Yulong Close in Moorebank.

The site is in an industrial area but close to homes and just metres from the M5 motorway. Fire authorities have evacuated about 200 people from surrounding buildings.

Transport for NSW said buses, including school transport, had been diverted from the area and might face delays of up to 25 minutes because of the fire. Other traffic delays are also expected.

“We do have some concerns that the smoke is blowing towards the Liverpool area and Liverpool Hospital,” a fire service spokesman told the ABC.

MOOREBANK | UPDATE: More than 20 #FRNSW crews are currently working to contain a large factory fire in Yulong Cl. The factory and adjoining businesses have been evacuated as aerial firefighting trucks attack the blaze. pic.twitter.com/vgUN28Dbz6

— Fire and Rescue NSW (@FRNSW) September 10, 2019

The fire is also within metres of homes, and much of the surrounding area has been evacuated.

NSW Fire and Rescue urged anyone who remained to stay inside with their windows closed.

At the factory, flames have broken through the roof and thick, black smoke is rising into the air. Explosions have also been reported.

Fire and Rescue NSW has sent more than 20 crews to the fire.

They had entered the building to determine the extent of the fire. No casualties have been reported.

Police and paramedics are also on the scene.

MOOREBANK | Due to the large factory #fire, there are large volumes of smoke in the area. Neighbouring residents are advised to stay indoors and keep their windows and doors closed.

— Fire and Rescue NSW (@FRNSW) September 10, 2019

The fire service spokesman said the contents of the building were not yet known. Firefighters were cautious about entering the building, fearing the blaze might have structurally weakened it, he said.

“The fire appears also to involve an area underneath the building, a subfloor car park and it appears there is some involvement in that area as well,” he told the ABC.

“Hopefully, the fire will soon burn itself out in those areas and then we will be able to have a good look and have a look … It is all dependent on how strong the building is.”

On its website, Baker & Co describes itself as “an industry leader in sourcing and developing both staple and ground-breaking ingredients” for products in food and beverage, fragrances and cosmetics and the pharmaceutical industry.

The cause of the fire remains unclear.

-with AAP