The blast - which rocked homes and buildings in several surrounding villages - was followed by a huge fire with clouds of black smoke billowing out, Shirpur Police Station official Sanjay Ahire told .
Dhule Superintendent of Police Vishwas Pandhre told media persons that 12 people have been killed and more than 50 injured, including 10 who are critical, and they have been rushed to hospitals in Shirpur and Dhule.
The eruption is believed to have taken place in a chemical-filled boiler of the Mumbai-based Rumit International's Rumit Chemisynth factory in Waghadi area, around five kilometres on the outskirts of Shirpur.
There were an estimated 100 workers present in the factory at that time and considering the intensity of the blast and the blaze which engulfed it, officials fear the casualties figure could increase.
Early pictures of the blast site showed a factory building with all its walls blown off leaving behind a skeletal structure, and neighbouring buildings which sustained huge damage.
Firefighters were engaged in dousing the flames in the boiler complex till late this afternoon.
Chief Minister Devendra Fadnavis expressed sorrow over the loss of lives and casualties and reviewed the situation arising out of the blast with officials this afternoon.
"The fire is now under control. A team of the State Disaster Relief Forces has also rushed to the spot," he said.
Fadnavis announced an ex-gratia of Rs 5 lakh to the kin of the all the deceased in the tragedy.
Union Home Minister and BJP President Amit Shah expressed shock over the tragedy and said he has spoken to the state government in the matter.
"Anguished to learn about the loss of lives due to explosion at a chemical factory in Dhule... Spoken to Fadnavis and the state government is providing relief to the people," Shah said.
Guardian Minister for Dhule Dada Bhuse, Collector Gangatharan Devrajan and S.P. Pandhare were at the site personally supervising the relief operations.
( With inputs from IANS )