A worker has been killed in an explosion at a chemical plant in Derrimut, in Melbourne's west.

The body of the 44-year-old man from Hoppers Crossing was found inside the ACB Group factory after the incident at 9.45am this morning, which was believed to have been caused by a chemical reaction.

A second worker was treated for minor injuries at the scene.

Paramedics monitored 28 workers from the plant and adjoining factories at evacuation points for any signs of chemical exposure.

The explosion caused a small fire that was contained to the rear of the factory with the aid of a sprinkler system.

Around 80 firefighters responded from surrounding districts across Melbourne.

Fire Rescue Victoria assistant chief fire officer Dominic Scarfe said the exact chemicals involved were yet to be confirmed.

He said a community warning was initially put out for the industrial estate and surrounding suburbs but the risk had reduced.

"Our challenge now is we've managed to contain all the water that was used to extinguish the fire on site and we've got contractors coming in to remove that," Mr Scarfe said.

"We don't want that water getting into the stormwater and local creeks."

The Environment Protection Authority said it did not believe any firewater had escaped the site, but it would continue checking stormwater drains and waterways as a precaution.

Worksafe has launched an investigation into the incident.

Ambulance Victoria also monitored the health and welfare of firefighters who entered the plant.

ACG Group describes itself as one of Victoria's leading specialists in Class 3 dangerous goods blending.