Warrnambool Fire Brigade senior station officer Michael Doreian said a security guard reported the fire at South West Tools and Industrial in Rooneys Road about 12.45am.

He said the fire started in the workshop at the rear of the property where tools were repaired.

Mr Doreian said firefighters initially used dry chemical fire extinguishers because there were a number of power tools that had lithium line batteries present.

"We were worried about the power tools with lithium line batteries because when they are involved with fire they can explode," he said.

Mr Doreian said firefighters put out the fire in about 30 minutes.

He said the cause was under investigation, but it's believed a battery was the cause.

Mr Doreian said a lithium line battery appeared to have overloaded, exploded and embedded itself in a wooden door two metres away.

"The battery was about four inches long and three inches of the four inches has embedded itself in the door," he said.

Mr Doreian said firefighters remained at the scene for about an hour and a half using extraction fans to remove smoke from the premises.

"It's a relatively small fire but the whole factory could have gone up," he said.

"It's lucky the security guard detected it so quickly."

South West Tools and Industrial manager Patrick Lane praised the quick-thinking R&M Security staff member, who quickly raised the alarm when she saw smoke.

"The firefighters have done a great job too," he said.

Mr Lane said the blaze had melted and buckled a window and there were other batteries and aerosol cans which could have caught alight if the fire wasn't put out so quickly.

He said the store opened as normal on Tuesday morning.

Police are also seeking information from the public on a member of the public who set off fireworks on Grassmere Road about 9.50pm.

A police spokesman said a small grass fire began after the fireworks were set off, burning a patch of grass about 15 metres by four metres.

Anyone with information is asked to contact Crime Stoppers on 1800 333 000 or Warrnambool police on 5560 1333.

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