An Auckland insulation company is making $20 million a year by recycling plastic bottles into a polyester-based material which is used as an alternative to fibreglass.

InsulPro wanted to create a product that was safer to use than fibreglass and did not contain glue that would release formaldehyde.

The result is a polyester product that resembles a fluffy lightweight material.

The polyester is made from thousands of recycled plastic bottles that the company imports from various countries in Asia such as Taiwan and Korea.

InsulPro managing director Paul Vujcich said the material was made in New Zealand but the bottles were sourced overseas because of the volume required.

Vujcich said the fibre was made by cutting the bottles up, melting them together and forcing them into very fine fibres and cooled.

"It comes out with a crimp in it and it's also hollow, which is what gives it a good insulation property. We take those fibres, we blend them together and then we pass them through an oven and heat-bond it together so it comes out in a thick white fluffy blanket."

He said glue was not needed because heat bonded the fibres together.

The result is a product that provides healthier options to commercial and residential buildings.

The insulation itself can be recycled and it promises not to absorb moisture or shrink over time.

InsulPro guarantees it for 50 years.

Vujcich said the company wanted to develop a product that did not need protective clothing to install.

"Polyester isn't itchy. You don't have to use any respiration or safety equipment to handle it and it doesn't contain any glue, so therefore doesn't [release] any formaldehyde. It is quite uncomfortable to use [fibreglass].

"That's what drew us to polyester, it's used for pillows, duvets, sleeping bags, outdoor clothing. The product is safe because it's not glued together, it's welded by heat. Essentially that's the difference [from fibreglass]."

Recycled insulation has been installed in parts of SkyCity, the Hilton Hotel on the wharf, in Sir Peter Jackson's new sound studio, Te Papa Museum and in Parliament, Vujcich said.

InsulPro is accredited under the Government's Warm Up New Zealand scheme.