Four others, including two firefighters, were taken to hospital after the massive blaze triggered by the blast that engulfed the Dandenong premises shortly after midday on Friday.
Police and paramedics were called to the scene amid reports of multiple subsequent explosions.
More than 120 firefighters and 40 trucks fought for hours to bring the flames under control.
One factory worker, 57, remains unaccounted for.
Fire Rescue Victoria initially said firefighters were unable to enter the building to conduct a primary search as the structure was fully alight.
However, police said on Sunday detectives had been told that at the time of the blast, three men including the missing man, were in close proximity to a delivery of chemicals as they were being unloaded.
A man in his 60s was taken to The Alfred Hospital in a stable condition with upper body injuries, while two others in their 30s and 40s were taken to Dandenong Hospital.Another person was transported to The Alfred.
Smoke remained visible several kilometres away from the blaze. (HANDOUT/SES VICTORIA/FACEBOOK)
The scene remains cordoned off and a guard is in place until the integrity of the structure is deemed safe for police to enter and search for the missing man.
Arson and Explosives Squad officers and other emergency personnel were expected to attend the premises on Sunday.
The cause of the fire continues to be investigated although police say, at this stage, it does not appear to have been suspicious.
Smoke was visible several kilometres away from the blaze with strong winds blowing it across multiple suburbs.
Fire Rescue Victoria assistant chief Greg Christison called the conditions extreme.
"It's presenting a number of challenges for us in suppression activities," he told reporters on Saturday.
17°C