Billy Bowie Special Projects Ltd in Kilmarnock, East Ayrshire, kept fish waste unrefrigerated for days and failed to ensure that offensive smells were kept under control, prosecutors said.
The firm pleaded guilty to two charges at Kilmarnock Sheriff Court after breaching their permit between September and December 2013.
Officers from the Scottish Environment Protection Agency (Sepa) investigated the premises at Moorfield industrial estate after receiving several complaints from members of the public living in the area.
They said “putrid” smells were preventing them from opening their windows and using their gardens.
Sepa officers reported that a shutter door on a shed used for composting waste was being left open and the site’s bio-filter, which controls odours, was not functioning properly.
They did not follow Sepa advice to stop receiving fish waste until it was fixed.
Gavin Ferguson, Sepa’s reporting officer, said: “Complainants have explained that the odours have prevented them from opening windows at their homes or using their gardens, and in some cases they did not want to go outside at all.
“They described the odour as ‘heavy and sickening’, and ‘horrible’, ‘heavy’ and ‘putrid’.
“Billy Bowie Special Projects Limited operates a process which is inherently odorous and there are conditions in their permit which, if complied with, should ensure that offensive odours do not leave the site.
“By failing to comply with certain conditions of their permit and also failing to properly maintain the biofilter, the company have caused a significant negative impact to the local area.
“By keeping a proportion of the site’s fish waste unrefrigerated in the reception building for several days as part of the bulking-up activity, they further added to their likelihood of creating odour.”
Billy Bowie Special Projects pleaded guilty on Monday to breaching the Pollution Prevention and Control (Scotland) Regulations 2000 and the Environmental Protection Act 1990.