The initial response of seven crews has been scaled down to three, with assistance from an aerial appliance and two support vehicles.
Crews are extinguishing the rest of the fire and dampening hotspots.
Fire and emergency shift manager Shannon Lucas said the building, which is about 45m by 20m, had been fully burnt out.
Fire and Emergency was called to the scene at the factory's Titoki Street site at 6.20am on Friday.
Titoki Street is closed and the public is asked to stay away from the area.
Matta factory manager Tim Scott said he was alerted early this morning, and was driving back to Ōtaki from Auckland to assess the damage.
The owner of a business near the factory on fire said it looked like the building had been reduced to its frame.
The business owner, who did not want to be named, said it was a hive of activity.
Speaking to RNZ from nearby the scene on Riverbank Road, she said fire trucks and firefighters were everywhere, including one on a tall ladder hosing down the building.
All she could see of the building was its steel frame.
Fire and Emergency said there was no risk of the fire spreading to other properties.
The smoke would be noticeable from a distance, so people should keep their doors and windows shut to keep out the smell, it said.
The fire is not currently being treated as suspicious.
It is the third fire reported in Ōtaki in the past week.
Two 17-year-olds were referred to Youth Services in relation to a bush fire at Ōtaki Beach last Saturday, 23 March.
And crews rushed to a large blaze at a workshop at Swamp Road and found a single-storey complex well-alight on Friday, 22 March.
RNZ
