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No fewer than 16 people have perished after a huge fire erupted at a clothing factory in Bangladesh, with officials warning that the number of victims could rise.

Sixteen bodies have been retrieved but were burned beyond recognition, the fire service stated.

Distraught relatives gathered outside the multi-story factory in Mirpur, Dhaka on Tuesday in looking for their loved ones still unaccounted for.

The fire, which erupted at the factory around midday, was put out after three hours. But an adjacent chemical warehouse continued to burn, officials reported.

As late as 21:00 local time (15:00 GMT) on Tuesday, the fire at the chemical warehouse had not been entirely put out, media reports reported.

Emergency responders have not ascertained which of the two buildings ignited initially.

Based on witnesses, the chemical warehouse stored chemical bleaching agents, synthetic polymers and industrial peroxide, all of which can worsen fires. Polymer products also emits toxic fumes when burned.

Security personnel are still attempting to find the owners of the factory and the warehouse, fire service director the fire service official told the media.

An investigation on whether the warehouse was operating legally is also in progress, he mentioned.

Weeping family members stood outside the burned buildings, many of them clutching photographs of their missing relatives.

Present at the scene is a man looking frantically for his daughter, Farzana Akhter.

"When I learned of the fire, I rushed here. But I still haven't found her... I just want my loved one back," he told reporters.

The catastrophic occurrence has yet again underscored the hazardous conditions facing Bangladesh's clothing sector, which engages countless of workers and is a significant provider of foreign revenue for the nation.