The blaze broke out just before 2am on Wednesday. Thick smoke and fumes drifted towards the town centre, causing worried locals to ring the police.
“People should stay inside and keep the windows closed,” said fire officer Johan Erlandsson at Motala emergency services.
However, he noted out that it would be hard for residents to follow that advice in the scorching weather expected on National Day.
Erlandsson said that the fire brigade would have the fire under control by around 9am but that the work to put it out would continue throughout the day.
A number of fire units and around 30 firemen were at work on the blaze, which had spread up to the roof of the building.