A raw milk silo at Fonterra's Edendale plant has collapsed.
Emergency services are on site, but it was initially unclear whether anyone was injured in the collapse.
Six appliances and a commander unit are at the Edendale factory, where the explosion brought the tower down around ten to two this afternoon.
Fire shift commander Daryl Ball said when the silo collapsed it brought down a number of gantry walkways.
A St John spokesman said paramedics were also on site.
Police officers have set up large detours around the plant.
A Fonterra spokeswoman said all staff were accounted for.
"At the moment we don't know the cause of the incident, so we're working through that," she said.
Senior staff were in the boardroom for an emergency meeting this afternoon.
A Fonterra staff member said as far as he knew, no one had been inside the silo at the time.
The silos store raw milk that is brought to the factory by its tankers.
A month ago thousands of litres of hazardous waste were spilled at the same Southland plant.
Emergency services were called to the Edendale factory around 2am on August 16 when staff reported 5000-litre tanks of nitric acid and caustic alkali were overflowing.
No one was hurt in the incident.
Nitric acid and caustic alkali are used to clean milk tankers and inside the factory and a machine malfunction was initially believed to have been the cause of the spill.
On its website, Fonterra said the Edendale plant in Southland had been in operation for more than 133 years, making it New Zealand's oldest manufacturing site.
"It was established in 1881 by entrepreneurs William Davidson and Thomas Brydone. Through their dairy industry nous and agricultural know-how they become the first dairy factory to export cheddar cheese and butter to markets around the world," the Fonterra website said.