Explosion at Vic factory of ADF contractor

Equipment has been hurtled up to 100 metres from the centre of an explosion at a Victorian factory that makes grenades and flares for the Australian Defence Force.

No one was hurt but Chemring Australia's countermeasure and pyrotechnic manufacturing facility in Lara was evacuated at 7:20am on Tuesday after the explosion on a production line.

The facility produces smoke grenades and countermeasure flares, which are used to protect against guided missile attacks.

CFA says a chemical reaction sparked the "substantial explosion" that hurtled equipment up to 100 metres away.

About 30 factory workers were evacuated and a fire was quickly contained by sprinkler systems.

"The big thing for us was that there were no injuries and the evacuation and safety procedures worked as they were supposed to," Chemring spokesman Chris Isaacs told AAP.

The production line, which is remotely operated by factory workers, was not producing flares at the time.

Mr Isaacs said once the CFA deems the factory safe to re-enter, Chemring will investigate the cause of the incident.

Worksafe said it is investigating the incident.