Smith County Fire Marshal Jim Seaton said the fire sparked at 6:50 p.m. when an electricity transformer on company property blew, sending sparks flying.
He said some sparks landed on stacks of bounded cardboard, which were sitting underneath a pole shed temporarily before they were to be recycled.
Seaton said firefighters operated machinery to break the bundles apart to extinguish the flames more effectively.
An 18-wheeler in the area sustained paint damage, and a trailer loaded with tires also was damaged, Seaton said.
Oncor turned off electricity to the building as firefighters battled the blaze. Seaton said he was unsure whether the plant was in operation and what the amount of damage would be.
The fire was across the parking lot from the main building, and the building was not damaged.
As of press time firefighters were still battling the blaze.
Red Springs, Winona, New Chapel Hill and Dixie volunteer fire departments were on scene, along with the Smith County Sheriff's Office and Fire Marshal.