"It was either that, or someone threw away a bucket of hot embers.
"The investigation is still ongoing, so watch this space."
Mr Daymond said the fire was "well ablaze" by the time fire services arrived on site shortly after midnight.
"You could see the flames coming out of the roof," he said.
"It was a difficult fire to get under control, as the building is corrugated iron, so we couldn't get underneath where the fire was actually burning.
"We had bits of iron falling down all around us. It was at least an hour before it was out."
He said the fire most likely started in the area where some recycling items are dropped off through two slots.
"It looks like the fire started in between those two holes - and spread to both sides.
"With all the paper and plastic that would have been inside, you can imagine it would have gone up pretty fast."
Mr Daymond said the fire service was particularly wary because of a spate of arson attacks in Pahiatua in March and April, but is unsure if the incidents are linked.
"There were several cases of trees and shrubs outside people's houses catching alight," he said.
"So, we are wary that there's someone running around misbehaving with fire.
"We've been taking a good, hard look at every fire scene ever since."
Pahiatua residents were "gutted" to hear about the damage.
Freda Carmichael, who lives nearby, said her family were there while fire crews worked on the blaze.
"We woke up and thought it was already daylight - but it was the flames," she said.
"It was a huge fire. We reckon someone threw a cigarette in there.
"We used the plant for our plastic recycling all the time. It's pretty gutting. Now we'll have to go somewhere else."
Pam Bisset said: "It's terrible - we couldn't believe it.
"We took some recycling up there today - and at first we thought we were on the wrong street.
"We're gutted. We don't know what we're going to now. It's such a nuisance."
Tina Reeve, who owns a shop in Main St, said she had seen "a few kids" hanging around town late Saturday night.
"They're saying it's most likely arson - I'm guessing it was probably young kids.
"Hopefully they rebuild the place. We still need somewhere for our recycling, don't we?"
A spokesperson for the district council said people could use a recycling site at the Community Centre car park in Ross St, Woodville, or the kerb-side recycling service. The council is still assessing damage to the building, which has been cordoned off for safety reasons.