Firefighters are tackling a blaze of around 300 tonnes of wooden pallets at the Blackvein Industrial Estate in Cross Keys.
Fire crews were called to the estate just before 3am this morning.
There are about 26 firefighters from Risca, Abercarn, Cefn Fforest, Cwmbran and Caerphilly fire stations at the scene.
South Wales Fire and Rescue Service has said nobody has been injured but that it expected firefighters to at the scene for sometime.