Dozens of labourers were on site at the factory in an industrial district outside the capital Dhaka when a blast tore through the six-storey building, causing its walls and a roof to collapse.
"It is a terrible scene. Fire brigade officers have arrived and are doing rescue work. The factory's boiler exploded and the blast also affected other buildings near the factory," police officer Harunur Rashid told AFP.
The factory is owned by textiles manufacturer Multifabs, which makes clothing for mostly European brands according to its website.
He said the explosion so powerful that it destroyed parts of the factory including "a roof and several walls".
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Al Amin, a worker at a nearby garment factory, said he was attending evening prayers at a mosque some 300 yards (metres) from the factory at around 7pm (1300 GMT) when the explosion shook the whole area.
"I ran to the spot instantly and saw a huge smoke. I saw blood all over the bodies of some injured workers and instantly called the fire brigade," he told AFP.
Bangladesh has more than 4,500 garment factories employing four million mostly female workers at minimum monthly wage of $68.
The industry is notorious for poor workplace safety, with many of the factories lacking basic equipment such as ventilation and air coolers.
In April 2013, the nine-storey Rana Plaza factory complex collapsed, killing more than 1,100 people in one of the world's worst industrial disasters.
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