Abstract: Apparatus for making fiber insulation from paper comprises a preshredder having a semi-cylindrical perforate basket with a passageway behind it. An air inlet extends behind the basket into the passageway and an air outlet is located at the front of the passageway. A flail rotatably mounted coaxial in the basket is driven by a motor for shredding paper deposited from a conveyor into the basket. A blower, connected to the preshredder, passes the paper segments to a surge bin where the air and paper segments are separated. The separated paper segments accumulate in the surge bin and are withdrawn from it at a constant predetermined rate by a conveyor and deposited into a duct which interconnects the surge bin and a finishing mill. The air then enters this duct to continue transporting the paper. A dry chemical dispensing device disperses flame retardant material into the duct. The finishing mill includes a large centrifugal fan rotatably mounted in a cylindrical cavity and driven by a motor.