"As per the initial reports there was a cylinder blast which triggered the blaze", Srikakulam Dy SP Arjun said without elaborating.
According to sources, around 200 workers were present at the time of the accident.
All the injured have been admitted to Srikakulam-based Rajiv Institute of Medical Sciences, officials said.
Five fire engines were rushed to the spot to douse the fire which is still raging.
However, senior district officials refused to comment saying they are investigating into what could have triggered the fire at the plant situated at Arinam Akkivalasa village this morning.
Nagarjuna Agrichem is a unit of Nagarjuna Fertilisers and Chemicals.
Meanwhile, as a precautionary measure, the district authorities have started evacuating people from at least five villages, including Arinam Akkivalasa, Kesavarayuni Peta, Rayapadu, Boddapadu, situated in the vicinity of the site.
Top district officials, including district collector G Venkatram Reddy, joint collector P Bhasker and SP K V V Gopala, are monitoring the operations.
