Police believe people at the factory on Superior Drive at Dandenong South were unloading a delivery of solvents and chemicals when the blast triggered a massive blaze about midday on Friday.
The fire engulfed the premises and three men were close to the delivery when it was being unloaded.
Two of the men, a 62-year-old from Eaglemont in Melbourne's northeast and a 44-year-old from Port Melbourne, were taken to hospital with serious injuries.
The third man, earlier reported to be a 57-year-old factory worker, remained missing as of Sunday morning.
Victoria Police later on Sunday confirmed officers recovered a person's body at the scene.Â
The person was yet to be formally identified.
Two firefighters were also taken to hospital after the blaze, which took more than 120 firefighters and 40 trucks hours to bring under control.
Witnesses reported multiple explosions and smoke was visible several kilometres away with strong winds blowing it across multiple suburbs.
Smoke remained visible several kilometres away from the blaze. (HANDOUT/SES VICTORIA/FACEBOOK)
The scene was cordoned off as of Sunday morning and a guard was in place until the integrity of the factory was deemed safe for police to enter and search for the missing man.
Victoria Police took control of the scene on Saturday night after firefighters extinguished the blaze.
Officers from the arson and explosives squad worked with other emergency services, council workers and rescue teams on Sunday to recover the person's body.
Police said they continued to investigate the cause of the fire but it was not being treated as suspicious.
They urged anyone with information to come forward.
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