Several firefighting units have been dispatched to the factory in the Bayezid Textile area
Eight makeshift houses, two warehouses storing garment fabric waste and a shop were gutted in the fire that erupted around 3am on Sunday in Abdul Ali Nagar in the port city.
Ten fire fighting units managed to put out the flames after three hours, said Chittagong Fire Service Deputy Assistant Director Md Jasim Uddin.
Fire fighters suspect discarded cigarette butts could have triggered it.
No casualties were reported in the fire but its damages could be around Tk 600,000, said Jasim Uddin.