Thick smoke rose in the skies above Markdale as Chapman's Ice Cream, a local institution and major employer, was destroyed by fire.

The fire threw off enough smoke to lead to an OPP-ordered evacuation of about 60 homes on the west side of the small community about 40 kilometres southeast of Owen Sound in the Grey Highlands.

The Markdale arena was used as a temporary shelter for evacuees.

Some other residents were asked to consider a voluntary evacuation, especially if they have respiratory conditions. Patients in the local hospital, which was adjacent to the burning plant, were either discharged or transferred to a hospital in Meaford.

The OPP issued a mandatory boil water order for residents, as the firefighting taxed the village's water supply system.

None of the plant's 200 employees or any of the firefighters were injured.

On its website, Chapman's describes itself as Canada's largest independent ice cream manufacturer, "but we'll never outgrow the community of Markdale, Ont. in which we live and work."

The current company's roots there go back to 1973, founded by David and Penny Chapman. They originally had four employees and two trucks. The company said it now has a fleet of more than 60 trucks and a 140,00-square-foot distribution centre.

Chapman's now markets its products across Canada. It built its own wastewater treatment centre to take the pressure off the municipal system.

Company vice-president Ashley Chapman said it appears a welder's spark began the fire on Friday morning. Crews were working on an expansion project at the old creamery building.

Chapman said the company will rebuild in Markdale, which has a population of about 1,400 and is about a two-hour drive from Toronto.

This is the latest blow to strike the community this summer.

On Aug. 20, an F2 tornado touched down in the community, having first struck near the village of Ayton and passing through Durham -- a damage track of about 36 kilometres. Such tornadoes have winds of between 180 and 250 kilometres per hour.

Environment Canada has estimated the twister would have been about 100 metres wide at its widest.

The violent storm led to an 11-year-old boy's death at a conservation area just north of Durham.

Damage in Markdale is estimated to be $2 million. On Wednesday, the Municipality of Grey Highlands declared the tornado strike to be a disaster. This will help the municipality get disaster relief from the province.

The overall tornado damage in West Grey is estimated to be at least $10 million.

With files from The Canadian Press