At least 10 people died in the explosion, according to public radio and the BGNES news agency.
The secretary general of the interior ministry, Svetlozar Lazarov, told local radio yesterday "to expect casualties" but did not give precise figures.
Fifteen workers were believed to have been on site at the time of the explosion at the plant near the village of Gorni Lom, in the Vidin region. The two factory owners were also there, Interior Minister Yordan Bakalov said.
At least three employees were injured in the incident, according to the regional hospital of Montana, located some 80 kilometres north of the capital Sofia.
The privately-owned plant carries out contracts for the Bulgarian army, destroying stockpiles of obsolete munitions.
The cause of the blast was not immediately known but the interior ministry has criticised the factory's "poor discipline", after six people were injured in explosions in 2007 and 2010.