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Firefighter Shanmugaraju, who spoke from the scene, described a “huge explosion” as the factory went up in flames in Sivakasi, which is the centre of the Indian fireworks industry some 700 kilometres (430 miles) from state capital Chennai.
“Thirty bodies have already been found. Some were factory workers, most of them were local villagers,” said Shanmugaraju, who like many people in the region only uses one name.
He told AFP that local people had walked towards the Om Sivasakthi plant after the fire broke out and were then caught up in the carnage.
Officials at two local hospitals confirmed to AFP that they had taken in 30 corpses as well as many badly burned survivors.
“We have already registered 40 injured patients,” administrator in the Sivakasi government hospital, Venkatalakshmi, told AFP.
“We have very limited accommodation here for patients. Already our burns ward is full.”
Sivakasi, which is home to some 700 fireworks factories, is running at peak production ahead of the forthcoming festival season which includes Diwali, the festival of lights which Indians celebrate by letting off firecrackers.
Back-to-back brick-built factories are packed into the centre of the fireworks district, where many workers assemble products by hand.
“Diwali is fast approaching and there is a lot of activity going on out here,” local district police chief Najmulhoda, who also uses one name, told AFP by telephone from the blast site.
“The factory had a basic fire-fighting system which did not work,” he added.
Television pictures showed smoke billowing from the factory and the surrounding warehouses. Stocks of firecrackers could also be seen exploding in the flames.
At least six fire trucks at the scene took more than three hours to bring the blaze under control after it broke out around 12:30am (0700 GMT), with exploding fireworks and toxic fumes posing a danger to the teams of firefighters.
About 150-200 workers were on the production line when the blaze began, but most of them managed to escape unharmed, officials at the scene said.
The latest tragedy in Sivakasi comes after at least 20 people were killed in another blaze at a fireworks factory in the town in July 2005.
Accident-prone local factories, targeted by child rights groups in the past for employing under-age workers, are also India’s leading manufacturers of safety matches.
According to recent estimates from the United Nations’ International Labour Organisation (ILO), nearly 50,000 Indians die from work-related accidents or illness each year.