Palghar Control police official Pramod Pawar said the blast took place around 11.15 pm in the chemical company's plant.
"The blast, cause of which is not yet clear was so deafening that it was heard in a radius of 10 km, and houses and buildings were shaken," Mr Pawar told news agency IANS.
Fire engines were rushed to the spot and firefighting operation is on.
The blast is suspected to have occurred in a boiler room of Ramedeo Chemicals's plant and efforts were on to douse the fire in the factory precincts.
The fire has spread to other companies adjacent to the company, Manjunath Singe, Superintendent of Police, Palghar told news agency PTI. There are chemical drums inside these companies, due to which the fire is spreading, he said.
Tarapur Automic Power Station, which is also situated on Boisar-Tarapur Road is around 20 km away from the spot, he added.
Local eyewitnesses said that the explosion, "sounding like a huge bomb" happened when many were preparing to retire for the night.
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However, scared and shaken by the explosion, many feared it was an earthquake and hundreds rushed out on to the streets and sat there.With inputs from agencies
