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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

     For the quarterly period ended June 30, 1997

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934



                          Commission File Number 0-7163


                          AMERICAN FILTRONA CORPORATION
--------------------------------------------------------------------------------
                                  (Registrant)



            Virginia                                      54-0574583
----------------------------------              -----------------------------
    (State of incorporation)                          (I.R.S. employer
                                                     identification no.)



  3951 WESTERRE PARKWAY, SUITE 300
  RICHMOND, VIRGINIA                                          23233
-------------------------------------            ----------------------------
        (Executive offices)                                 (Zip code)



Registrant's telephone number:  804-346-2400



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for at least the past 90 days.  Yes.  X   No.
                                                 -----    -----


Number of shares of common stock outstanding as of July 28, 1997:  3,817,629





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<PAGE>











                          AMERICAN FILTRONA CORPORATION




                                      INDEX



                                                                      Page No.
                                                                      --------

          Part I. Financial Information

            Condensed Consolidated Balance Sheet                          3

            Condensed Consolidated Statement of Income                    4

            Condensed Consolidated Statement of Cash Flows                5

            Notes to Condensed Consolidated Financial
              Statements                                                  5

            Management's Discussion and Analysis of
              Financial Statements                                        6


          Part II. Other Information                                      7

          Signatures                                                      7





















                                       -2-

<PAGE>

<TABLE>




                              PART I. FINANCIAL INFORMATION

                              AMERICAN FILTRONA CORPORATION

                          CONDENSED CONSOLIDATED BALANCE SHEET
                     June 30, 1997 (Unaudited) and December 31, 1996

<CAPTION>


                                                             1997              1996
                                                         ------------      ------------
                           ASSETS
<S> <C>
Current assets
   Cash and equivalents                                  $ 46,268,401      $ 43,267,438
   Accounts receivable                                     20,961,285        17,573,501
   Inventories                                             16,618,590        18,621,047
   Prepaid expenses and deferred income taxes               3,362,701         2,889,743
                                                         ------------      ------------
      Total current assets                                 87,210,977        82,351,729

Property, plant and equipment                              28,319,240        27,699,964

Other assets
   Excess cost over net assets of businesses acquired       4,484,336         4,692,821
   Notes receivable                                         2,434,843         2,434,843
   Other assets                                               211,136           374,536
                                                         ------------      ------------
                                                            7,130,315         7,502,200
                                                         ------------      ------------
                                                         $122,660,532      $117,553,893
                                                         ============      ============


               LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Accounts payable                                      $ 14,532,761      $ 15,342,954
   Accrued expenses                                         5,683,435         5,165,485
   Income taxes                                             1,301,451         1,367,795
                                                         ------------      ------------
      Total current liabilities                            21,517,647        21,876,234

Other liabilities
   Deferred income taxes                                    1,063,247           516,417
   Other liabilities                                          347,046         1,764,276
                                                         ------------      ------------
                                                            1,410,293         2,280,693

Shareholders' equity
   Common stock, $1 par value                               3,816,629         3,754,758
   Additional capital                                       2,542,910           926,673
   Retained earnings                                       94,473,915        89,703,400
   Cumulative translation adjustment                       (1,100,862)         (987,865)
                                                         ------------      ------------
                                                           99,732,592        93,396,966
                                                         ------------      ------------
                                                         $122,660,532      $117,553,893
                                                         ============      ============





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<PAGE>




                             AMERICAN FILTRONA CORPORATION

                      CONDENSED CONSOLIDATED STATEMENT OF INCOME
                         Periods Ended June 30, 1997 and 1996
                                      (Unaudited)

<CAPTION>

                                    Three Months                    Six Months
                              --------------------------   ---------------------------
                                 1997           1996           1997           1996
                              -----------    -----------   ------------    -----------
Revenues
   Net sales                  $51,155,184    $49,458,610   $104,121,912    $97,158,824
   Investment income              522,157        403,351        890,588        733,336
                              -----------    -----------   ------------    -----------
                               51,677,341     49,861,961    105,012,500     97,892,160

Costs and expenses
   Cost of products sold       40,649,961     39,893,626     82,434,948     78,353,288
   Selling, research,
      administrative and
      general                   5,872,958      5,298,553     11,769,719     10,486,029
                              -----------    -----------   ------------    -----------
                               46,522,919     45,192,179     94,204,667     88,839,317
                              -----------    -----------   ------------    -----------

Income before income taxes      5,154,422      4,669,782     10,807,833      9,052,843

Income taxes                    1,850,000      1,625,000      3,900,000      3,175,000
                              -----------    -----------   ------------    -----------

Net income                    $ 3,304,422    $ 3,044,782   $  6,907,833    $ 5,877,843
                              ===========    ===========   ============    ===========

Average shares outstanding      3,816,629      3,741,027      3,811,025      3,739,209

Earnings per share                   $.86          $ .81          $1.81          $1.57

Dividends per share                  $.28          $.265          $ .56          $ .53
























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<PAGE>







                             AMERICAN FILTRONA CORPORATION

                    CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                    Six-Month Periods Ended June 30, 1997 and 1996
                                      (Unaudited)

<CAPTION>

                                                             1997             1996
                                                          ----------       ----------
Operating
   Net income                                             $6,907,833       $5,877,843
   Reconciling items
      Depreciation and amortization                        3,023,754        3,062,058
      Deferred income taxes                                   98,112         (387,365)
      (Decrease) from noncash working capital             (1,768,153)        (419,045)
      Other - net                                         (1,319,261)          11,185
                                                          ----------       ----------
                                                           6,942,285        8,144,676

Investing
   Acquisitions of property, plant and equipment          (3,482,112)      (2,639,195)

Financing
   Decrease in notes payable                                       -         (650,000)
   Issuance of common stock                                1,678,108          135,335
   Dividends paid                                         (2,137,318)      (1,981,470)
                                                          ----------       ----------
                                                            (459,210)      (2,496,135)
                                                          ----------       ----------
Net increase in cash and equivalents                      $3,000,963       $3,009,346
                                                          ==========       ==========
</TABLE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A. BASIS OF PRESENTATION

The accompanying  unaudited condensed  consolidated financial statements include
all adjustments (consisting only of normal recurring accruals) which the Company
considers  necessary  to  present  fairly  the  financial  position,  results of
operations, and cash flows for the interim periods.

The results of operations  for the six-month  period ended June 30, 1997 are not
necessarily indicative of the results to be expected for the entire year.

The financial  statements have been prepared in accordance with  instructions to
Form 10-Q and, therefore, do not include all information and notes necessary for
a fair presentation in conformity with generally accepted accounting principles.
For additional  information regarding significant  accounting policies and other
financial data see the Company's December 31, 1996 Form 10-K.


NOTE B.  MERGER OF COMPANY

On July 1, 1997 the Company  entered into a letter of intent for the acquisition
by Bunzl plc of all outstanding shares of the Company for a per share cash price
of $46.52.  The  trustees of trusts for members of the family of the late Walter
Bunzl, trustees of trusts for certain members of the family of Rudolph H. Bunzl,

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<PAGE>


and Mr.  Bunzl  individually  have signed  letters of  commitment  to vote their
shares in favor of the  transaction.  Such  shareholders  have the right to vote
approximately 46% of the Company's outstanding shares.

Execution of a definitive  acquisition agreement is subject to final negotiation
of terms and  conditions  and  completion  of business  and  financial  reviews.
Consummation of this transaction would be subject to normal regulatory  filings,
Company shareholder approval, and other usual conditions.


NOTE C. INVENTORIES

At June 30, 1997 and December 31, 1996 inventories consisted of (in thousands):

                                                           1997        1996
                                                         -------     -------
FIFO
   Finished products                                     $10,288     $10,522
   Work in process                                         1,342       1,448
   Raw materials                                           7,617       9,098
                                                         -------     -------
                                                          19,247      21,068
Less excess of FIFO over LIFO
   inventory value                                         2,628       2,447
                                                         -------     -------
                                                         $16,619     $18,621
                                                         =======     =======


Inventories stated at LIFO approximated $7,771 (1996 - $9,103).


          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS

The Company has entered  into a letter of intent for the  acquisition  of all of
its outstanding  stock for a per share cash price of $46.52 (see Note B of Notes
to Condensed Consolidated Financial Statements).

BALANCE SHEET

The Company's  strong  financial  condition and liquidity were maintained in the
1997  first  half.  Cash  and  equivalents  represented  38% of total assets at 
June 30, 1997 compared to 37% at December 31, 1996.  The ratio of current assets
to current  liabilities was 4.0 at June 30, 1997 compared to 3.8 at December 31,
1996.  The accounts  receivable  increase from the  historically  lower year-end
amount  reflects  the higher level of business  activity in the first half.  The
change in other liabilities arose primarily from the January,  1997 distribution
of performance  shares for the three-year period ended December 31, 1996 and the
adjustment of related deferred income taxes.

INCOME STATEMENT

Comparison Between Three-Month and Six-Month Periods Ended 
June 30, 1997 and 1996

Net sales increased 3% between the second quarters and 7% between the six months
of each year.  The bonded fibers  segment had lower sales for the second quarter
as a decrease  in tobacco  filter  sales from the strong  1996  period more than
offset  increased  sales in other product lines.  The plastic  products  segment
sales growth resulted from a solid increase by the plastic  extrusion  companies
offsetting expected lower sales of the Canadian flexible packaging company.

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<PAGE>




Investment  income increased 30% between the second quarters and 21% between the
six  months  of  each  year  primarily  as a  result  of  the  higher  level  of
investments.

Costs and expenses  increased 3% between the second  quarters and 6% between the
six months of each year which were  generally in line with the sales  increases.
Cost of products sold  increased at lower rates than the sales  increases  while
selling,  research,  administrative  and general expenses  increased at somewhat
higher rates in the periods.

The bonded fibers segment second quarter operating  earnings  decreased from the
strong 1996 period because of the sales  decrease;  however,  for the six months
earnings  were well ahead of the prior  year's  six-month  period.  The  plastic
products segment posted substantially  increased earnings for the second quarter
and six months compared to the 1996 periods.  Overall performance of the plastic
extrusion  companies  was very good in both  periods and the  Canadian  flexible
packaging  company  recorded  profits compared to losses in last year's periods.
The combination of these factors produced pretax income increases of 10% between
the second quarters and 19% between the six months of each year.

Income taxes  increased 14% between the second  quarters and 23% between the six
months of each year  reflecting  the higher  level of income and estimate of the
effective  tax rate for 1997.  Therefore,  net income and related  earnings  per
share  increased  by 9% and 6% between  the second  quarters  and by 18% and 15%
between the six months of each year.



                           PART II. OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

     (b)          Reports on Form 8-K -- There were no reports on Form 8-K filed
                  for the three months ended June 30, 1997.




                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                    AMERICAN FILTRONA CORPORATION
                                            (Registrant)





Date      July 28, 1997             /s/ John D. Barlow, Jr.
                                    -------------------------------------------
                                    John D. Barlow, Jr., Vice President-Finance
                                    (Chief Financial Officer)

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