At its height, up to 70 firefighters tackled the blaze, which lit up the night sky.
Fire crews were called to Pelican Foods, in Barracks Road, on Sandy Lane Industrial Estate in Stourport at 10.20pm last night.
Alongside other emergency services, they spent the night and early hours of today tackling the fire, stopping it spread to nearby businesses and homes just metres from the site.
The glowing flame, from the burning of 60 tonnes of waste oil and 500 tonnes of kerosene at the factory, could be seen for miles around, before it was eventually brought under control.
Fire crews remained at the scene this afternoon.
Six people were evacuated from a nearby residential caravan site and sent to a set-up rest centre at Stourport Civic Hall at 3am.
Others went to stay with family and friends nearby.
West Midlands Ambulance Service Hazardous Area Response Team and West Mercia Police were also called to the incident.
This morning, the site was cordoned off as Hereford and Worcester Fire Service began an investigation into how the fire was started.
Chris Walters, service manager at Murley Agricultural Supplies, which is also on the estate, said he was called to the scene at 10.50pm by his firm's CCTV operators.
He said: "They could see there was something going on in our yard. The fire service had cut the gates to get to Pelican Foods.
"When I got there the fire was shockingly big. It was well-controlled though.
"In fairness to the professionalism of the fire service, Sandy Lane was lucky to suffer the loss of only one business. It could have been a lot worse."
Mr Walters said Murley Agricultural Supplies was unaffected, although they had spent time last night moving some of their machinery so it was further away from the flames.
Station Commander Toby Kempton said: "Our main consideration was the fact that there are factories in close proximity so our consideration was protecting those building and we were successful in doing that with limited and minor damage to those properties.
"There were a number of exploded propane cylinders and that's a major major hazard for us. It caused us to review our tactical approach, in other words: stand back a bit."
The Environment Agency also attended, helping crews stop the oil and resulting foam and water from the factory spilling into the River Severn.
Mr Kempton said: "As a food processing plant, the environmental impact was a concern. In the early stages we liaised with the environment agency and contained the oil and we're using a company to draw it up, put it in tankers and remove it.
"They could be there a number of hours."
An Environment Agency spokesman said: "Staff have been on site all morning containing the run off of fire water and waste oil. We will continue to be on site throughout the day to determine whether there has been an impact on nearby watercourses including the River Severn, but we don't anticipate there being any significant impacts."
Meanwhile, fire crews were also called to a major fire at a factory in Tipton last night.
Up to 40 firefighters took around an hour to bring the blaze in Bankfield Road, near Toll End Road, Ocker Hill, under control. The cause of the fire is unknown.
Crew commander Scott Weldon from West Bromwich fire station said investigations would continue to find how it started. A fire investigation officer was in attendance yesterday afternoon.