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                               SECURITIES AND EXCHANGE COMMISSION
                                     WASHINGTON, D.C. 20549

                                            FORM 10-K

  (Mark One)
      X                     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                               OF THE SECURITIES EXCHANGE ACT OF 1934
                             FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
                                                 OR
                          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                               OF THE SECURITIES EXCHANGE ACT OF 1934

                          For the transition period from         to
                                   Commission File Number 33-64824

                                    GENERAL CHEMICAL CORPORATION
                       (Exact name of Registrant as specified in its charter)

     DELAWARE                                      22-2689817
(State of other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                 Identification Number)

90 EAST HALSEY ROAD
PARSIPPANY, NEW JERSEY                               07054
(Address of principal executive offices)          (Zip Code)

       Registrant's telephone number, including area code: (201) 515-0900

        Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act: None

     THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I
     (1)(a) AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE
                           REDUCED DISCLOSURE FORMAT.

        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  periods  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

        Indicate by check mark if disclosure of  delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained herein,  and is not contained in the
definitive  information statement  incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

        There  was no  voting  stock  of the  Registrant  beneficially  held  by
non-affiliates of the Registrant as of March 20, 1997.

        The number of outstanding shares of the Registrant's  Common Stock as of
March 20, 1997 was 100 shares of Common Stock, $.01 par value per share.

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      None


<PAGE>
<PAGE>




                                     PART I

ITEM 1. BUSINESS

GENERAL

       General Chemical  Corporation  ("General Chemical"),  incorporated  under
the laws  of  the State of Delaware  is  a  diversified  chemical  manufacturing
company.  General  Chemical and its subsidiaries  (collectively,  the "Company")
have production  facilities in the United States and Canada that sell to a broad
range of industrial and municipal  customers.  The Company is a leading producer
of soda ash in North  America,  and a major North  American  supplier of calcium
chloride, sodium and ammonia salts, sulfites, nitrites,  aluminum-based chemical
products and refinery and chemical sulfuric acid regeneration services.  General
Chemical is a wholly owned subsidiary of New Hampshire Oak, Inc. ("New Hampshire
Oak") which is a wholly  owned  subsidiary  of The General  Chemical  Group Inc.
("GCG").

       For certain  information  concerning  the Company's  revenue,  income and
assets  attributable to the Company's  geographic areas and the amount of export
sales, See "Notes to the Consolidated Financial Statements,  Note 9 - Geographic
Information", which are incorporated by reference herein.

PRODUCT SALES

        The Company's  sales by product line (and the  percentage of total sales
represented by such sales) during the last three fiscal years are as follows:

<TABLE>
<CAPTION>
Product Line                                  1994              1995                1996
------------                            ------------------------------------------------------
                                                         (Dollars in thousands)
<S>                                     <C>          <C>  <C>          <C>     <C>         <C>
Industrial Chemicals................... $254,139     58%  $265,329     58%     $298,941    59%
Derivative Products and Services.......  191,251     43    196,287     43       215,084    42
Elimination and other (1) .............   (4,074)    (1)    (5,386)    (1)       (5,405)   (1)
                                       ---------   ----   --------   ----     ---------   ---
       Total........................... $441,316    100%  $456,230    100%     $508,620   100%
                                        ========   ====   ========    ===      ========   ===
</TABLE>

-------------
(1) Primarily comprised of the elimination of intracompany sales.

INDUSTRIAL CHEMICALS

       Soda ash and calcium chloride comprise the Company's  industrial chemical
product  lines.  The Company is the second  largest  producer of soda ash in the
U.S. and Canada and is the only producer of both  synthetic and natural soda ash
in North America.  General Chemical (Soda Ash) Partners ("GCSAP"), the Company's
51 percent-owned partnership,  produces natural soda ash by refining mined trona
deposits at its plant in Green River,  Wyoming. The Green River basin, where all
but one of the U.S.  producers  of natural  soda ash are  located,  contains the
largest known economically  recoverable trona deposits in the world. Soda ash is
also produced by the Company's Canadian subsidiary, General Chemical Canada Ltd.
("GC  Canada")  at its plant in  Amherstburg,  Ontario,  by using the  synthetic
process.  This  production  process,  which is energy  and labor  intensive,  is
considerably  more costly than refining natural soda ash. The Amherstburg  plant
remains  profitable  due to its operating  efficiency,  successful  marketing of
calcium  chloride,  a co-product,  and favorable freight rates to major Canadian
soda ash  markets.  GC Canada is the  largest  producer  of calcium  chloride in
Canada.

                                       -2-


<PAGE>
<PAGE>



       Soda Ash. The major use of soda ash is in the production of glass bottles
and other glass containers. Soda ash is also used in the manufacture of windows,
mirrors, fiberglass,  television tubes, lighting ware, tableware,  glassware and
laboratory ware. The chemical industry uses soda ash in the production of sodium
bicarbonate,  sodium  phosphates,  sodium  silicates and chrome  chemicals.  The
detergent  industry  often uses soda ash as the prime alkali to make  phosphates
and silicates for dry detergent applications. Soda ash is also used, to a lesser
extent, by the water treatment industry to control pH levels and by the pulp and
paper industries in the pulping of wood fiber.

       Due to the low-cost position of the U.S. natural soda ash producers,  the
export  market has grown  significantly  and now accounts for over  one-third of
U.S.  production.  The  Company,  along  with the other five U.S.  producers  of
natural  soda ash,  exports  soda ash  through  the  American  Natural  Soda Ash
Corporation  ("ANSAC"),  an  export  organization  organized  in 1984  under the
Webb-Pomerrene  Act.  ANSAC  ships to all parts of the world  except  Canada and
Western Europe.  Each individual member's allocation of ANSAC volume is based on
the member's total nameplate  capacity,  with any member's  expansion  phased in
over a multi-year period for allocation purposes.

       Calcium Chloride. Calcium chloride is used predominantly for dust control
and roadbed stabilization on unpaved roads in the summer, and for melting ice on
highways in the winter.  Although the summer road market is the dominant end use
in the Canadian  market,  the winter deicing market and industrial  applications
are the  major  end use  markets  in the U.S.  Industrial  applications  include
asphalt recycling, water treatment and concrete and drilling mud additives.

DERIVATIVE PRODUCTS AND SERVICES

       The Company's  derivative  products and services  product lines include a
wide  variety of products  such as  sulfuric  acid,  sodium and  ammonia  salts,
sulfites,  aluminum-based  chemical  products  and  nitrites  that  are  derived
principally  from the  production of soda ash and the  regeneration  of sulfuric
acid.  These  products are  categorized  into five major  product lines with end
markets  including  refinery  and chemical  sulfuric  acid  regeneration,  water
treatment,   photo   chemicals,   pulp  and  paper,   chemical   processing  and
semiconductor devices.

       Refinery and chemical regeneration services. Refineries use sulfuric acid
as an alkylation process catalyst in the production of high-quality, high-octane
and low-vapor-pressure gasoline. The alkylation process contaminates and dilutes
the  sulfuric  acid  catalyst,  generating  an 85 percent  to 90  percent  spent
sulfuric acid stream,  which is then removed from the refineries via pipeline or
tank truck. The Company thermally  decomposes the spent acid to regenerate fresh
sulfuric acid, which is then recycled back to the refinery. A similar service is
provided to the chemical  industry for the  manufacture of ion exchange  resins,
silicone polymers, liquid detergents and surfactants.

       Water Treatment.  The Company, through its broad geographic network of 28
strategically located plants, is the largest North American producer of aluminum
sulfate ("alum").  Municipalities,  which use alum as a flocculant and coagulant
in the treatment of water and waste water, are the predominant customers.  Other
products sold to the water treatment  market include sodium and ammonia salt and
sulfite products,  which are used in dechlorination and to inhibit the corrosion
of steel lines and equipment.

       Photo  Chemicals.  Sodium and ammonia  sulfites and bisulfites have major
applications as fixing and developing  solutions for conventional film and x-ray
processes. The Company has leading market share positions in these products.

       Pulp and Paper.  The pulp and paper  industry  utilizes alum and enhanced
coagulants  to  impart  water  resistance  ("sizing")  to paper and to treat the
substantial quantities of water required in the papermaking process. Paper mills
also use sulfuric  acid in the sulfur  dioxide  pulp  bleaching  process,  in pH
adjustments  and in water  treatment.  Other products used to a lesser extent by
the  pulp  and  paper  industry  include  sodium  sulfites,  which  are used for
digesting fibers in the  thermo-mechanical  pulping process,  reducing bleaching
agents such as chlorine and hydrogen  peroxide,  and as a raw material for other
bleaching agents.

                                       -3-


<PAGE>
<PAGE>



       Chemical Processing.  The chemical processing market utilizes a number of
the Company's  products.  Sodium  nitrite is primarily used as a reactant in the
manufacture of various  organics (i.e.  dyes and pigments and rubber  processing
chemicals), in applications as a heat transfer salt in high temperature chemical
reactions and as a cooling tower  corrosion  inhibitor.  Potassium  fluoride and
fluoborate  derivatives are low-volume,  higher priced chemicals used in brazing
fluxes,  agricultural chemicals,  surfactants and analytical reagants.  Sulfuric
acid is used in the  manufacture  of titanium  pigments,  fertilizer,  synthetic
fibers, steel, alum, paper and many other products.

       Semiconductor  Devices.  The Company supplies  high-purity  semiconductor
acids,  caustics and etchants to customers  throughout  North  America,  Western
Europe and the Pacific  Rim.  These  customers  manufacture  silicon  wafers and
convert the wafers to integrated circuits.  Fluoborate derivatives are also sold
to this market for use in electroplating.

ITEM 2. PROPERTIES

       In conducting its operations, the Company uses properties having offices,
storage  facilities or manufacturing  facilities at 76 locations  throughout the
United States, Canada and the Philippines.  Twenty eight of these properties are
leased while the remainder are owned by the Company.  The leased  properties are
occupied under rental agreements having terms ranging up to four years and under
month-to-month   tenancies.   The  two   properties   at  which  the   Company's
co-headquarters  are  located  are  Parsippany,  New Jersey,  and  Hampton,  New
Hampshire, which are leased by the Company and its parent, respectively.

       The locations and uses of certain major  properties of the Company are as
follows:

<TABLE>
<CAPTION>
                                     Location                            Use
      <S>                        <C>                              <C> 
      United States...........   Pittsburg, California            Manufacturing Facility
                                 Richmond, California             Manufacturing Facility
                                 North Claymont, Delaware         Manufacturing Facility,
                                                                   Offices and Warehouse
                                 East St. Louis, Illinois         Manufacturing Facility
                                 Solvay, New York                 Manufacturing Facility
                                 Marcus Hook, Pennsylvania        Manufacturing Facility,
                                                                   Offices and Warehouse
                                 Anacortes, Washington            Manufacturing Facility
                                 Green River, Wyoming             Trona Mine and
                                                                   Manufacturing Facility
      Canada..................   Amherstburg, Ontario             Manufacturing Facility
                                                                   and Undeveloped Lots
                             *   Mississauga, Ontario             Offices
                                 Valleyfield, Quebec              Manufacturing Facility
--------------
*  Leased.
</TABLE>



        Each of the Company's properties listed above under the caption, "United
States," (other than the properties located at Green River, Wyoming, and Solvay,
New York),  have been  pledged as  security  by  General  Chemical  for the U.S.
Revolving Credit Facility and Bank Term Loan.

       The Company's  Green River plant  currently  has a nameplate  capacity of
approximately  2.4  million  tons of soda ash per  year.  The  plant is owned by
GCSAP, a partnership  of which the Company is the managing  partner and in which
the Company has a 51 percent equity interest,  The Andover Group, Inc., which is
a wholly owned subsidiary of ACI International  Limited, has a 25 percent equity
interest and TOSOH Wyoming,  Inc.,  which is a wholly owned  subsidiary of TOSOH
America, Inc., has a 24 percent equity interest. Each partner is prohibited from
transferring  its interest in GCSAP or withdrawing  from GCSAP without the prior
written consent of the other partners.

                                      -4-


<PAGE>
<PAGE>



       In addition to such  restrictions  on the transfer of interests in GCSAP,
there are certain  restrictions  and obligations with respect to the transfer of
either the Company's  interest in GCSAP or the voting securities of the Company.
For further information,  see "Notes to the Consolidated  Financial  Statements,
Note 6 - Commitments and Contingencies."

       Reserves. The Company mines trona ore under leases with the United States
government,  the State of Wyoming and the Union Pacific  Resources  Corporation.
The Company's trona reserves and mines are located in the Green River,  Wyoming,
area.

       The  Company's  estimated  proven  reserves  within bed No. 17, which the
Company is  currently  mining,  consist of  approximately  92.5  million tons of
extractable  ore. At the 1996 operating rate of 2.2 million tons of soda ash per
year (4.1 million tons of trona ore),  there is  approximately a 23-year supply.
For the three years ended  December 31,  1996,  annual  production  of trona ore
averaged  approximately  4.0 million tons. In addition,  the Company's  reserves
contain  three other  major  minable  trona beds  containing  approximately  324
million  tons of  extractable  ore.  These beds,  which may require  significant
capital to access,  will provide more than 79 years of added  reserves  based on
current operating rates.

       At the  Company's  synthetic  soda  ash  plant in  Amherstburg,  Ontario,
Canada,  the Company  uses salt and  limestone  as its raw  materials.  Based on
current  production  levels,  the  Company  has  approximately  30 years of salt
reserves.  Limestone reserves owned by the Company total approximately 15 years,
with an option on an additional six years of reserves.  However,  the Company is
not currently  utilizing its limestone reserves and is instead purchasing all of
its limestone  requirements  under a long-term  contract with a major  limestone
producer due to the economic benefit of using purchased limestone.

ITEM 3.  LEGAL PROCEEDINGS

       Richmond  Works July 26,  1993  Incident.  On July 26,  1993,  a pressure
relief device on a railroad tank car containing oleum that was being unloaded at
the  Company's  Richmond,  California,  facility  ruptured  during the unloading
process,  causing  the  release  of a  significant  amount of  sulfur  trioxide.
Approximately  150 lawsuits  seeking  substantial  amounts of damages were filed
against the Company on behalf of in excess of 60,000  claimants in municipal and
superior courts of California  (Contra Costa and San Francisco  counties) and in
federal  court  (United  States  District  Court for the  Northern  District  of
California).  All state court cases were coordinated before a coordination trial
judge (In Re GCC  Richmond  Works Cases,  JCCP No.  2906) and the federal  court
cases were stayed until completion of the state court cases.

       After several months of negotiation under the supervision of a settlement
master,  the  Company  and a  court-approved  plaintiffs'  management  committee
executed a  comprehensive  settlement  agreement  which  resolved  the claims of
approximately  95 percent of the claimants who filed lawsuits arising out of the
July 26th incident,  including the federal court cases. After a final settlement
approval hearing on October 27, 1995, the coordination  trial judge approved the
settlement on November 22, 1995.

       Pursuant to the terms of the  settlement  agreement,  the  Company,  with
funds to be provided  by its  insurers  pursuant  to the terms of the  insurance
policies described below, has agreed to make available a maximum of $180 million
to implement the settlement.  Various "funds" and "pools" are established by the
settlement  agreement to compensate  claimants in different  subclasses who meet
certain  requirements.  Of this  amount,  $24  million  has been  allocated  for
punitive  damages,  notwithstanding  the  Company's  strong belief that punitive
damages are not warranted.  The settlement  also makes  available $23 million of
this $180  million for the payment of legal fees and  litigation  costs to class
counsel and the plaintiffs' management committee.

                                       -5-


<PAGE>
<PAGE>



       The  settlement  agreement  provides,  among  other  things,  that  while
claimants may "opt out" of the  compensatory  damages  portion of the settlement
and  pursue  their  own cases  separate  and  apart  from the  class  settlement
mechanism,  they have no right to opt out of the punitive damages portion of the
settlement.  Consequently,  under the terms of the settlement, no party may seek
punitive  damages from the Company  outside of those provided by the settlement.
Approximately  2,800  claimants,  which  constitutes  less than 5 percent of the
total number of  claimants,  have elected to so opt out.  Except with respect to
compensatory  damage  claims by claimants  electing to opt-out,  the  settlement
fully  releases  from all claims  arising out of the July 26, 1993  incident the
Company and all of its related entities,  shareholders,  directors, officers and
employees,  and all other  entities  who have been or could  have been sued as a
result of the July 26th  incident,  including all those who have sought or could
seek indemnity from the Company.

       Notices of appeal of all or  portions of the  settlement  approved by the
court have been filed by five law firms representing  approximately 2,750 of the
opt-outs,  with  2,700  of these  claimants  represented  by the same law  firm.
Virtually all of these  claimants  have not specified the amount of their claims
in court  documents,  although the Company  believes that their alleged injuries
are no  different  in  nature or  extent  than  those  alleged  by the  settling
claimants. On May 8, 1996, the California Court of Appeals dismissed each of the
appeals that had been filed  challenging the trial court's approval of the class
action  settlement.  The Court of Appeals  dismissed the appeal  relating to the
trial  court's  rulings on  plaintiffs'  attorneys'  fees on the ground that the
appealing  attorneys  lacked  standing  to  appeal.  The Court of  Appeals  also
dismissed  each of the other  grounds for appeal,  ruling that the trial court's
orders and rulings approving the settlement were not presently appealable, if at
all,  by the  appealing  claimants  since they had all elected to opt out of the
settlement.  The appealing attorneys and some of the appealing claimants filed a
petition for review with the California Supreme Court which, on August 15, 1996,
elected not to review the Court of Appeals' decision.

       The settlement  includes various terms and conditions designed to protect
the  Company  in the  event  that the  settlement  as  approved  by the court is
overturned or modified on appeal.  If such an overturn or  modification  occurs,
the  Company  has the right to  terminate  the  settlement  and make no  further
settlement payments, and any then unexpended portions of the settlement proceeds
(including,  without limitation,  the $24 million punitive damage fund) would be
available to address any expenses and liabilities that might arise from any such
an overturn or  modification.  In addition,  in the event that the settlement as
approved by the court is overturned or modified on appeal,  the release document
signed by settling  claimants contains language which fully releases the Company
from any further claims,  either for compensatory or punitive  damages,  arising
out of the July 26, 1993 incident.  The Company has presently  obtained releases
from over 94 percent of the settling  claimants  and believes  that it will have
obtained the majority of releases from the remaining settling claimants prior to
any such appeal being ruled on by an appellate court.

       It is  possible  that one or more of the  opt-out  claimants,  once their
opt-out cases are finally  litigated through trial, may attempt to refile all or
a portion of the appeals that were dismissed by the California Court of Appeals.
While there can be no assurances  regarding how an appellate court might rule in
the event of a refiling of an appeal of the  settlement,  the  Company  believes
that the  settlement  will be upheld on appeal.  In the event of a  reversal  or
modification  of the settlement on appeal,  with respect to lawsuits by any then
remaining  claimants  (opt-outs  and  settling  claimants  who have  not  signed
releases) the Company  believes that,  whether or not it elects to terminate the
settlement  in the event it is  overturned  or modified on appeal,  it will have
adequate  resources from its available  insurance  coverage to vigorously defend
these  lawsuits  through  their  ultimate   conclusion,   whether  by  trial  or
settlement.  However,  in the event the  settlement is overturned or modified on
appeal,  there  can  be no  assurance  that  the  Company's  ultimate  liability
resulting  from the July 26,  1993  incident  would  not  exceed  the  available
insurance  coverage  by an  amount  which  could be  material  to its  financial
condition  or results of  operations,  nor is the  Company  able to  estimate or
predict a range of what such ultimate liability might be, if any.

                                       -6-


<PAGE>
<PAGE>



       The Company has insurance coverage relating to this incident which totals
$200 million. The first two layers of coverage total $25 million with a sublimit
of $12 million  applicable to the July 26, 1993  incident,  and the Company also
has excess  insurance  policies of $175 million  over the first two layers.  The
Company  reached an agreement  with the carrier for the first two layers whereby
the carrier paid the Company $16 million in settlement of all claims the Company
had against that carrier.  In the third quarter of 1994, the Company  recorded a
$9 million  charge to earnings for costs which the Company  incurred  related to
this matter. The Company's excess insurance  policies,  which are written by two
Bermuda-based  insurers,  provide  coverage for compensatory as well as punitive
damages.  Both  insurers have executed  agreements  with the Company  confirming
their  respective  commitments  to fund  the  settlement  as  required  by their
insurance  policies  with  the  Company  and  as  described  in  the  settlement
agreement.  In  addition,  these same  insurers  currently  continue  to provide
substantially the same insurance coverage to the Company.

       Milwaukee  Litigation.  In March  1993,  an  outbreak  of  cryptosporidia
occurred in the public  water  supply of the City of  Milwaukee.  As a result of
that  incident,  several  lawsuits  have been  filed with the  Milwaukee  County
Circuit Court against one or more of the City of  Milwaukee,  its  Department of
Public Works,  Sara Lee  Corporation,  E.D. Wesley Co., Peck Foods  Corporation,
certain hotels,  numerous insurance  companies,  several  municipalities and the
Company.  The complaints generally allege, among other things, that the outbreak
was caused when certain  defendants other than the Company illegally disposed of
waste into the water supply,  and that the City of Milwaukee  failed to properly
operate  its water  treatment  plant in a manner that would have  prevented  the
outbreak.  The  principal  allegations  against  the  Company  are  that a water
treatment  chemical  sold to the City of  Milwaukee  by the Company  should have
removed the bacteria and failed to do so and that the Company consulted with the
City concerning the water purification.

       One of the suits (Markwiese, et al v. Peck Foods Corporation, et al filed
in 1993) had been  certified,  prior to the service of a  complaint  against the
Company,  as a class  action in favor of all persons who  sustained  damage as a
result of the wrongful acts of the various defendants. Subsequently, the Company
and  the  City  of  Milwaukee   challenged,   among  other  things,   the  class
certification,  and the Wisconsin  Court of Appeals  remanded this matter to the
trial court for a  determination  of how certain  issues  impact  whether  class
certification  was appropriate.  It is expected that these issues will be argued
later in 1997 before a new trial judge.

       In addition to the Markwiese  action,  several other  lawsuits have since
been filed by the same lead  attorneys in the Circuit Court of Milwaukee  County
against the same basic group of defendants,  including two multi-party  actions,
Quandt et al v. Northbrook Property and Casualty Insurance Co. filed in 1994 and
Winiarski  et al v. Peck  Foods et al filed in 1996,  on behalf of a total of 98
plaintiffs.  The  unspecified  damages  sought by these  various  complaints  is
alleged  to be "far in excess of $1.0  million  dollars"  for  personal  injury,
economic loss,  emotional  distress,  pain and suffering,  medical  expenses and
punitive damages.

       The Company has denied all material  allegations  of the  complaints  and
will continue to defend these lawsuits vigorously.  The Company further believes
that its  available  insurance  provides  adequate  coverage  in the event of an
adverse  result in this  matter,  and that this  matter will not have a material
adverse effect on its financial condition or results of operations.

                                       -7-


<PAGE>
<PAGE>





                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

       There is no stock owned by  non-affiliates  and  accordingly  there is no
established  trading market for General  Chemical's  Common Stock. The number of
holders of record of the Company's Common Stock as of March 25, 1997 was one.

       General  Chemical  declared and paid $16,900,000 in cash dividends to its
shareholder  for the year ended  December 31, 1995.  For the year ended December
31, 1996, no cash dividends were paid.

       General Chemical has covenanted in the indentures and agreements  related
to the  Senior  Subordinated  Notes,  the Bank Term Loan and the U.S.  Revolving
Credit Facility that it will not declare or pay any cash dividends unless at the
time of such payment  certain  conditions  are met,  including  that no event of
default  shall have  occurred and be  continuing,  that a certain  minimum fixed
charge ratio shall have been met and that the aggregate amount of all restricted
payments (as defined) under such  indentures and agreements not exceed a maximum
amount  determined  on the basis of certain  formulas.  At  December  31,  1996,
approximately $51 million was available for dividend payments in accordance with
these covenants.

                                       -8-


<PAGE>
<PAGE>





ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

       General Chemical Corporation, which has a history dating back to 1899, is
a diversified  manufacturing  company predominantly engaged in the production of
inorganic chemicals,  with manufacturing facilities located in the United States
and Canada. The Company is a leading producer of soda ash in North America,  and
a major North American supplier of calcium  chloride,  sodium and ammonia salts,
sulfites,  nitrites,  aluminum-based chemical products and refinery and chemical
regeneration services to a broad range of industrial and municipal customers.

       The industrial  chemical product lines consisting of soda ash and calcium
chloride  accounted for  approximately 59 percent of the Company's  consolidated
1996 net revenues.  The derivative products and services product lines accounted
for  approximately 41 percent of the Company's  consolidated  1996 net revenues.
The  derivative  products and services  product lines  encompass a wide range of
products that are principally derived from the Company's  production of soda ash
and regeneration of sulfuric acid.

       The higher sales recorded in 1996 were  attributable  to gains across all
product  lines. The industrial chemical product lines were led by strong pricing
gains in soda ash.  The  Company's  natural  soda ash  facility in Green  River,
Wyoming,  and the  synthetic  soda ash facility in  Amherstburg,  Ontario,  were
essentially sold out for the second  consecutive year.  During 1997,  additional
soda ash  capacity  from the recent  expansion  at the  Company's  Green  River,
Wyoming,  facility,  will allow the Company to continue to take advantage of the
growth  in  exports.  Although  pricing  is  expected  to be down in 1997 due to
expansions by several  producers that took place last year,  industry  operating
rates are expected to remain high.

       The derivative  products and services  product lines also posted a strong
performance  in 1996 due to volume gains in all product lines.  The  performance
was bolstered by the  expansion of the  Company's  two West Coast  sulfuric acid
regeneration  plants and good growth in products that serve the water  treatment
and semiconductor markets.

       This  discussion  should  be  read  in  conjunction  with  the  Company's
Consolidated  Financial  Statements and the respective notes thereto included in
Item 8. This report contains  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange  Act of 1934,  as  amended.  Actual  results  could  differ
materially  from those projected in such statements as a result of the following
risk factors:  risks and uncertainties in connection with business conditions in
the  markets the Company  serves and in the general  economy,  and the impact of
competitive products and pricing, in particular, the price of soda ash.

RESULTS OF OPERATIONS

       The following  table sets forth the results of operations  and percentage
of net revenues  represented by the  components of operating  profit and expense
for the years ended December 31, 1995 and 1996 (dollars in millions).

<TABLE>
<CAPTION>

                                                              YEARS ENDED DECEMBER 31,
                                                             1995                   1996
                                                       --------------         ---------------
<S>                                                    <C>        <C>         <C>        <C> 
     Net revenues...................................   $456.2     100%        $508.6     100%
     Cost of sales..................................    318.7      70          344.2      68
                                                        -----    ----          -----    ----
     Gross profit...................................    137.5      30          164.4      32
     Selling, general and administrative expense....     39.1       8           47.8       9
                                                       ------    ----         ------    ----
     Operating profit...............................   $ 98.4      22%        $116.6      23%
                                                       ======    ====         ======    ====
</TABLE>

                                       -9-


<PAGE>
<PAGE>



1996 Compared with 1995

        Net revenues for 1996 were $508.6  million or 11 percent higher than the
prior year. This increase is a result of favorable soda ash pricing and improved
volume across all product lines.

        Gross profit for 1996  increased 20 percent to $164.4  million  compared
with $137.5  million for the prior year.  Gross  profit as a  percentage  of net
revenues  increased  to 32 percent for 1996 from 30 percent for 1995.  Favorable
soda ash  pricing  and  higher  volume  offset in part by  higher  manufacturing
expenses, account for the above-mentioned increase.

        Selling,  general  and  administrative  expense  was 9  percent  of  net
revenues for 1996 versus 8 percent for 1995. This increase is due primarily to a
one-time charge of $8.3 million related to a Restricted Unit Plan created by the
Company's  parent  which  satisfied  the  Company's  liability  under its former
Phantom Equity Plan.

        Interest expense for 1996 was $23.1 million which was $1.7 million lower
than the 1995 level due to lower outstanding debt balances.

        Interest  income for 1996 was $1.2 million  which was  comparable to the
prior year.

        The foreign currency transaction gain for 1996 was $0.2 million compared
with a $1.4 million gain in 1995, principally due to the impact of exchange rate
fluctuations on a $52 million U.S.-  denominated loan of the Company's  Canadian
subsidiary.  The impact of these foreign currency transaction gains on this loan
was noncash.

        Minority interest for 1996 was $31.6 million compared with $19.5 million
for the same period of 1995,  reflecting  higher  earnings due to favorable soda
ash pricing for GCSAP.

        Net income for 1996 was $38.7 million versus $16.0 million for 1995, due
to the foregoing,  and the nonrecurring charge to income tax expense recorded in
1995.

ACCOUNTING PRONOUNCEMENTS

        In 1995, the Financial  Accounting  Standards Board issued  Statement of
Financial  Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of
Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed  Of" ("FAS  121"),
which the Company adopted in 1996. This statement requires the Company to review
and adjust the carrying amount of long-lived assets and certain  intangibles for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be recoverable.  The adoption of FAS 121 did
not have a material  effect on the Company's  results of operations or financial
condition.

                                      -10-


<PAGE>
<PAGE>




ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See "Item 14. Exhibits,  Financial  Statement Schedules and Reports on Form
8-K."

                                      -11-

<PAGE>
<PAGE>









INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholder of GENERAL CHEMICAL CORPORATION:

        We have audited the accompanying  consolidated balance sheets of General
Chemical  Corporation and subsidiaries as of December 31, 1995 and 1996, and the
related consolidated  statements of operations,  changes in equity (deficit) and
cash flows for each of the three years in the period  ended  December  31, 1996.
Our audits also included the financial  statement  schedule in the Index at Item
14.  These  financial  statements  and  financial  statement  schedule  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on the financial  statements and the financial  statement schedule based
on our audits.

        We conducted our audits in accordance with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

        In our opinion,  such consolidated  financial statements present fairly,
in all material respects, the financial position of General Chemical Corporation
and  subsidiaries  at  December  31,  1995 and 1996,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted  accounting  principles.
Also, in our opinion,  such financial  statement  schedule,  when  considered in
relation to the basic financial  statements  taken as whole,  presents fairly in
all material respects the information set forth therein.

Deloitte & Touche LLP

Parsippany, New Jersey
February 14, 1997

                                      -12-


<PAGE>
<PAGE>




                          GENERAL CHEMICAL CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                 YEARS ENDED DECEMBER 31,
                                                                ----------------------------
                                                                1994       1995        1996
                                                                ----       ----        ----
                                                                      (IN THOUSANDS)
<S>                                                        <C>         <C>        <C>       
Net revenues.............................................  $  441,316  $ 456,230  $  508,620
Cost of sales............................................     303,014    318,692     344,234
Selling, general and administrative expense..............      37,722     39,156      47,810
Richmond incident costs..................................       9,000       --         --
                                                           ----------  ---------   ---------
Operating profit.........................................      91,580     98,382     116,576
Interest expense.........................................      31,886     24,796      23,110
Interest income..........................................       1,000      1,163       1,233
Foreign currency transaction (gains) losses..............       4,004     (1,382)       (169)
Other expense (income), net..............................         (77)       759         598
                                                           ----------  ---------   ---------
Income before minority interest, income taxes
 and extraordinary item .................................      56,767     75,372      94,270
Minority interest........................................      16,957     19,458      31,635
                                                           ----------  ---------   ---------
Income before income taxes and extraordinary item .......      39,810     55,914      62,635
Income tax provision.....................................      15,589     39,885      23,902
                                                           ----------  ---------   ---------
Income before extraordinary item ........................      24,221     16,029      38,733
Extraordinary item - loss from extinguishment
 of debt (net of tax)....................................      (8,203)      --         --
                                                           ----------  ---------  ----------
        Net income ......................................  $   16,018  $  16,029  $   38,733
                                                           ==========  =========  ==========
</TABLE>


























      See the accompanying notes to the consolidated financial statements.

                                      -13-


<PAGE>
<PAGE>




                          GENERAL CHEMICAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>

                                                                          DECEMBER 31,
                                                                       ----------------
                                                                       1995            1996
                                                                       ----            ----
                                                                          (IN THOUSANDS)
<S>                                                                 <C>           <C> 
Current assets:
   Cash and cash equivalents....................................... $  13,279     $  32,742
   Receivables, net................................................    76,440        87,288
   Inventories.....................................................    35,427        34,444
   Deferred income taxes...........................................    12,559         9,323
   Other current assets............................................       916         1,318
                                                                    ---------     ---------
        Total current assets.......................................   138,621       165,115
Property, plant and equipment, net.................................   187,417       212,743
Other assets.......................................................    29,297        30,919
                                                                    ---------     ---------
        Total assets............................................... $ 355,335     $ 408,777
                                                                    =========     =========


                               LIABILITIES AND EQUITY (DEFICIT)

Current liabilities:
   Accounts payable................................................ $  44,388     $  46,208
   Accrued liabilities.............................................    71,280        59,900
   Income taxes payable............................................     1,083         3,033
   Current portion of long-term debt...............................    17,392        17,392
                                                                    ---------     ---------
        Total current liabilities..................................   134,143       126,533
Long-term debt.....................................................   255,608       217,217
Other liabilities..................................................   161,691       167,591
                                                                    ---------     ---------
        Total liabilities..........................................   551,442       511,341
                                                                    ---------     ---------
Minority interest..................................................    28,278        38,572
                                                                    ---------     ---------
Equity (deficit):
   Common stock, $.01 par value;
        authorized 1,000 shares;
        issued and outstanding:  100 shares........................       --           --
   Capital deficit.................................................  (232,241)     (187,652)
   Foreign currency translation adjustments........................    (1,362)       (1,435)
   Retained earnings...............................................     9,218        47,951
                                                                    ---------     ---------
      Total equity (deficit).......................................  (224,385)     (141,136)
                                                                    ---------     ---------
      Total liabilities and equity (deficit)....................... $ 355,335     $ 408,777
                                                                    =========     =========

</TABLE>









      See the accompanying notes to the consolidated financial statements.

                                      -14-


<PAGE>
<PAGE>




                                 GENERAL CHEMICAL CORPORATION
                             CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                     YEARS ENDED DECEMBER 31,
                                                                     ------------------------
                                                                  1994         1995         1996
                                                                  ----         ----         ----
                                                                         (IN THOUSANDS)
<S>                                                          <C>            <C>          <C>
Cash flows from operating activities:
   Net income .............................................   $  16,018      $ 16,029     $ 38,733
   Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation and amortization.........................      24,024       25,050       25,861
     Net loss on disposition of long-term assets...........         785          906        1,132
     Loss on extinguishment of debt........................      13,570          --          --
     Unrealized exchange (gain) loss.......................       3,101       (1,586)          31
     Restricted unit plan costs............................         --           --         8,989
     (Increase) decrease in receivables....................     (10,160)       1,614      (10,927)
     (Increase) decrease in inventories....................       1,193       (5,512)         967
     (Increase) decrease in other assets...................      (1,473)       3,819          150
     Increase in accounts payable..........................       2,732        1,420        1,849
     Increase (decrease) in accrued liabilities............      (3,740)       6,597      (11,425)
     Increase (decrease) in income taxes payable...........      (3,557)      (2,891)       1,967
     Increase in other liabilities.........................       6,868        5,048        5,897
     Increase (decrease) in minority interest..............      (2,179)         686       10,294
                                                              ---------     --------     --------
       Net cash provided by operating activities...........      47,182       51,180       73,518
                                                              ---------     --------     --------
Cash flows from investing activities:
   Capital expenditures....................................     (19,605)     (27,909)     (51,367)
   Proceeds from sales or disposals of long-term assets....         129          350           73
                                                              ---------     --------     --------
       Net cash used for investing activities..............     (19,476)     (27,559)     (51,294)
                                                              ---------     --------     --------
Cash flows from financing activities:
   Proceeds from long-term debt............................     223,240        2,000       20,000
   Repayment of long-term debt.............................    (251,764)     (14,000)     (58,391)
   Capital contributions from parent.......................         --           --        35,600
   Dividends...............................................     (12,900)     (16,900)        --
                                                              ---------     --------     --------
       Net cash used for financing activities..............     (41,424)     (28,900)      (2,791)
                                                              ---------     --------     --------
Effect of exchange rate changes on cash....................        (600)         274           30
                                                              ----------    --------     --------
Increase (decrease) in cash and cash equivalents...........     (14,318)      (5,005)      19,463
Cash and cash equivalents at beginning of period...........      32,602       18,284       13,279
                                                              ---------     --------     --------
Cash and cash equivalents at end of period.................   $  18,284     $ 13,279     $ 32,742
                                                              =========     ========     ========
Supplemental information:
   Cash paid for income taxes..............................   $  18,654     $ 20,315     $ 18,500
                                                              =========     ========     ========
   Cash paid for interest..................................   $  30,537     $ 23,573     $ 22,222
                                                              =========     ========     ========

</TABLE>





      See the accompanying notes to the consolidated financial statements.

                                      -15-


<PAGE>
<PAGE>




                          GENERAL CHEMICAL CORPORATION
             CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                           FOREIGN
                                                           CURRENCY
                                               CAPITAL    TRANSLATION   RETAINED
                                               DEFICIT    ADJUSTMENTS   EARNINGS     TOTAL
                                               -------    -----------   --------     -----
                                                              (IN THOUSANDS)
<S>                                           <C>         <C>         <C>          <C>
Balance at December 31, 1993                 $(232,241)  $ (1,332)    $  6,971    $(226,602)
    Net income............................                              16,018       16,018
    Foreign currency translation..........                    (82)                      (82)
    Dividends.............................                             (12,900)     (12,900)
                                             ---------   --------     --------    ---------
Balance at December 31, 1994..............    (232,241)    (1,414)      10,089     (223,566)
    Net income............................                              16,029       16,029
    Foreign currency translation..........                     52                        52
    Dividends.............................                             (16,900)     (16,900)
                                             ---------   --------     --------    ---------
Balance at December 31, 1995..............    (232,241)    (1,362)       9,218     (224,385)
    Net income............................                              38,733       38,733
    Foreign currency translation..........                    (73)                      (73)
    Capital transactions with parent......      44,589                               44,589
                                             ---------   --------     --------    ---------
Balance at December 31, 1996..............   $(187,652)  $ (1,435)    $ 47,951    $(141,136)
                                             =========   ========     ========    =========

</TABLE>
















      See the accompanying notes to the consolidated financial statements.

                                      -16-


<PAGE>
<PAGE>




                          GENERAL CHEMICAL CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

        General Chemical Corporation  ("General Chemical" or the "Company") is a
wholly owned  subsidiary of New Hampshire Oak, Inc. ("New  Hampshire Oak" or the
"Parent") which is a wholly owned  subsidiary of The General Chemical Group Inc.
("GCG"). General Chemical is a diversified  manufacturing company engaged in the
production of inorganic  chemicals,  with production  facilities  located in the
United States and Canada.  General Chemical is a leading producer of soda ash in
North America,  and a major North American supplier of calcium  chloride,  which
accounted  for  approximately  59 percent of the  Company's  1996 net  revenues.
General  Chemical is also a major North American  supplier of sodium and ammonia
salts,  sulfites,  nitrites,  aluminum-based  chemical products and refinery and
chemical regeneration  services.  The Company's products are supplied to a broad
range of industrial and municipal customers.

        The  preparation  of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts of assets and  liabilities at the
date of the  financial  statements  and the  reported  amounts of  revenues  and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

        The consolidated  financial  statements  include the accounts of General
Chemical  Corporation,  its wholly owned subsidiaries and General Chemical (Soda
Ash) Partners ("GCSAP"), of which it owns 51 percent.  Minority interests relate
solely  to  partnerships  in  which  the  Company  has  a  controlling interest.
Intercompany balances and transactions are eliminated in consolidation.

        The Company's  parent was acquired in January 1989.  The purchase  price
assigned  to the  Company  at  January  1989 was  $168,113  which was  offset by
pushdown parent company acquisition debt of $308,000,  intercompany transactions
with  the  parent  company  during  1989  of  $92,006  and  other  miscellaneous
adjustments  totalling  $348,  resulting in a capital  deficit of  $232,241,  at
December 31, 1995.

        Inventories  are  valued  at the  lower  of cost or  market,  using  the
last-in,  first-out ("LIFO") method for all domestic production  inventories and
the  first-in,   first-out  ("FIFO")  or  average  cost  method  for  all  other
inventories.  Production  inventory  costs include  material,  labor and factory
overhead.

        Property,  plant and equipment are carried at cost.  Mines and machinery
and equipment of the General Chemical (Soda Ash) Partners are depreciated  using
the  units-of-production  method.  All other plant and equipment are depreciated
principally  using the straight-line  method,  using estimated lives which range
from 3 to 35 years.

        The Company  recognizes  deferred  tax assets and  liabilities  based on
differences  between financial statement and tax bases of assets and liabilities
using presently enacted tax rates.  Taxes on income are generally computed as if
General  Chemical were a stand-alone  company.  (See Note 7 for a description of
the Tax Sharing  Agreement.)  General Chemical pays its current U.S. federal tax
liabilities to GCG in accordance with the Tax Sharing Agreement.

        Accruals for  environmental  liabilities  are recorded  based on current
interpretations of environmental laws and regulations when it is probable that a
liability has been  incurred and the amount of such  liability can be reasonably
estimated.  Liabilities  for  environmental  matters were $11,152 and $10,843 at
December 31, 1995 and 1996, respectively. These amounts do not include estimated
third-party recoveries nor have they been discounted.

                                      -17-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

        The Company  provides  for the  expected  costs to be  incurred  for the
eventual   reclamation  of  mining  properties   pursuant  to  local  law.  Land
reclamation  costs are being  provided for over the estimated  remaining life of
the reserves currently under lease.

        The Company  does not hold or issue  financial  instruments  for trading
purposes. Amounts to be paid or received under interest rate swap agreements are
recognized  as increases  or  reductions  in interest  expense in the periods in
which they accrue.

        The financial statements of the Company's foreign subsidiaries have been
translated  into  U.S.   dollars  in  accordance  with  Statement  of  Financial
Accounting Standards No. 52.

        The Financial  Accounting  Standards Board issued Statement of Financial
Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of Long-Lived
Assets and for  Long-Lived  Assets to be  Disposed  Of" ("FAS  121"),  which the
Company  adopted  in 1996.  The  Company  evaluates  the  carrying  value of its
long-lived assets whenever there is a significant  change in the use of an asset
and adjusts the carrying value, if necessary,  to reflect the amount recoverable
through  future  operations.  The  adoption  of FAS  121  had no  effect  on the
Company's results of operations or financial condition.

        All highly liquid instruments  purchased with a maturity of three months
or less are considered to be cash equivalents.

        Certain  prior-period amounts have been reclassified to conform with the
current presentation.

NOTE 2 - CAPITAL CONTRIBUTIONS

       On May 15, 1996, The General Chemical Group Inc. (the Company's  ultimate
parent)  completed  an  initial  public  offering  in which it  issued  and sold
2,500,000  shares of Common Stock. A portion of the net proceeds,  $35,600,  was
contributed  to  the  Company  and  was  recorded  as  a  capital  contribution.
Additionally,  $8,989 was recorded  as a  capital  contribution  by the  Company
related to The General  Chemical Group Inc.  Restricted Unit Plan. See "Note 8 -
Phantom Equity Plan."

NOTE 3 - INCOME TAXES

        Income before income taxes and extraordinary item is as follows:

<TABLE>
<CAPTION>

                                                                 YEARS ENDED DECEMBER 31,
                                                               --------------------------
                                                               1994      1995       1996
                                                               ----      ----       ----
<S>                                                         <C>       <C>        <C>     
          United States...................................  $ 25,860  $ 32,139   $ 44,186
          Foreign.........................................    13,950    23,775     18,449
                                                            --------  --------   --------
                    Total.................................  $ 39,810  $ 55,914   $ 62,635
                                                            ========  ========   ========
</TABLE>








                                      -18-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

        The components of the income tax provision are as follows:

<TABLE>
<CAPTION>

                                                                 YEARS ENDED DECEMBER 31,
                                                               -------------------------
                                                               1994      1995       1996
                                                               ----      ----       ----
<S>                                                         <C>       <C>        <C>     
         United States:
           Current........................................  $ 11,250  $ 25,591   $ 13,708
           Deferred.......................................    (2,166)    3,627        557
         Foreign:
           Current........................................     7,497     8,867      7,296
           Deferred.......................................    (2,765)     (601)      (791)
         State:
           Current........................................     2,238     1,516      3,118
           Deferred.......................................      (465)      885         14
                                                            --------  --------   --------
                    Total.................................  $ 15,589  $ 39,885   $ 23,902
                                                            ========  ========   ========
</TABLE>


        A summary of the components of deferred tax assets and liabilities is as
follows:

<TABLE>
<CAPTION>

                                                                       DECEMBER 31,
                                                                    ----------------
                                                                    1995        1996
                                                                    ----        ----
<S>                                                              <C>          <C>     
         Deferred tax assets:
            Postretirement benefits.......................       $  26,633    $ 27,029
            Nondeductible accruals........................          35,523      35,502
            Foreign operations............................          10,384        --
            Other ........................................             815         342
                                                                 ---------    --------
              Total deferred tax assets...................          73,355      62,873
              Valuation allowance.........................         (17,516)     (6,265)
                                                                 ---------    --------
              Net deferred tax asset......................          55,839      56,608
                                                                 ---------    --------
         Deferred tax liabilities:
            Foreign operations............................            --           867
            Property, plant and equipment.................          27,167      27,774
            Pensions......................................           7,448       7,437
            Inventory.....................................           3,017       2,846
            Other.........................................           1,398         657
                                                                 ---------    --------
               Total deferred tax liabilities.............          39,030      39,581
                                                                 ---------    --------
                 Total net deferred tax assets............       $  16,809    $ 17,027
                                                                 =========    ========
</TABLE>


            The Company has deferred  tax assets  related to foreign tax credits
of $17,516 and $6,265 at December 31, 1995 and 1996, respectively, against which
a full valuation  allowance has been recorded.  A valuation  allowance of $2,133
and $1,641 was provided  during 1994 and 1995,  respectively.  During 1996,  the
Company reversed $11,251 of previously recorded valuation allowances,  primarily
related to foreign tax credits that expired.

                                      -19-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

        The  difference  between  the  effective  income tax rate and the United
States statutory rate is reconciled below:

<TABLE>
<CAPTION>
                                                                 YEARS ENDED DECEMBER 31,
                                                               --------------------------
                                                               1994      1995       1996
                                                               ----      ----       ----
<S>                                                            <C>       <C>       <C>  
          U.S. federal statutory rate.....................     35.0%     35.0%     35.0%
          State income taxes, net of federal benefit......      3.0       2.8       3.2
          Tax effect of foreign operations................      3.3       7.6       5.9
          Provision for disputed items....................      --       30.6        --
          Depletion.......................................     (3.3)     (5.3)     (6.4)
          Other...........................................      1.1       0.6        .5
                                                              -----     -----      ----
               Total......................................     39.1%     71.3%     38.2%
                                                              =====     =====      ====
</TABLE>



        The Internal Revenue  Service (the "IRS")  examinations of the Company's
parent  corporation's  federal  tax  returns  resulted  in  the  issuance  of  a
deficiency notice during 1995. GCG has informed the Company that it has filed an
administrative  appeal  with  the  IRS  contesting  the  items  denoted  in  the
deficiency notice.  Notwithstanding  such appeal, in 1995 the Company recorded a
provision  for  disputed  items  of  $17,100  for  all  years  prior  to 1995 in
connection with the deficiency notice.  Management believes the amounts provided
at December 31, 1996 are adequate.

NOTE 4 - PENSION PLANS

        The Company  maintains  several  defined  benefit pension plans covering
substantially all employees.  A participating  employee's annual  postretirement
pension  benefit is determined by the employee's  credited  service and, in most
plans, final average annual earnings with the Company.  Vesting requirements are
five years in the U.S. and two years in Canada.  The Company's funding policy is
to annually  contribute the statutorily  required  minimum amount as actuarially
determined.

        The  net  periodic  pension  cost  for  U.S.  pension plans included the
following components:

<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                               -------------------------
                                                                1994     1995       1996
                                                                ----     ----       ----
<S>                                                         <C>      <C>        <C>     
          Service cost (benefits earned during the year)..  $  3,652  $  3,283   $  4,100
          Interest cost on projected benefit obligation...     9,810    11,059     11,737
          Actual return on assets.........................      (311)  (22,475)   (22,319)
          Net amortization and deferral...................    (8,092)   13,337     12,141
                                                             --------   ------   --------
               Net periodic pension cost..................   $ 5,059  $  5,204   $  5,659
                                                             =======  ========   ========
</TABLE>

        The net periodic  pension cost for Canadian  pension plans  included the
following components:

<TABLE>
<CAPTION>
                                                                 YEARS ENDED DECEMBER 31,
                                                                ------------------------
                                                                1994     1995      1996
                                                                ----     ----      ----
<S>                                                          <C>      <C>        <C>   
          Service cost (benefits earned during the year)..   $  1,245 $  1,140   $1,494
          Interest cost on projected benefit obligation...      3,664    3,527    3,727
          Actual return on assets.........................     (1,209)  (6,614)  (4,662)
          Net amortization and deferral...................     (3,399)   2,457      559
                                                             -------- --------   ------
            Net periodic pension cost ....................   $    301 $    510   $1,118
                                                             ======== ========   ======
</TABLE>



                                      -20-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

        The funded status and (accrued)  prepaid  pension cost for all plans are
as follows:

<TABLE>
<CAPTION>

                                                            UNITED STATES                 CANADA
                                                             DECEMBER 31,               DECEMBER 31,
                                                           -----------------          ---------------
                                                           1995       1996             1995      1996
                                                           ----       ----             ----      ----
<S>                                                    <C>          <C>           <C>         <C>     
          Actuarial present value of benefit obligations:
            Vested...........................          $ (131,290)  $(130,386)    $ (38,348)  $ (40,421)
            Nonvested........................              (7,345)    (10,897)         (194)       (205)
                                                       ----------   ---------     ---------   ---------
            Accumulated benefit obligation...          $ (138,635)  $(141,283)    $ (38,542)  $ (40,626)
                                                       ==========   =========     =========   =========
          Plan assets at fair value..........          $  131,208   $ 149,552     $  53,799   $  60,224
          Projected benefit obligation.......            (160,572)   (168,302       (48,178)    (50,783)
                                                       ----------   ---------     ---------   ---------
          Projected benefit obligation (in
           excess of) less than plan assets..             (29,364)    (18,750)        5,621       9,441
          Unrecognized prior service cost....               7,634       6,823         1,034         942
          Unrecognized net (gain) loss ......               3,136      (7,908)       12,690       8,761
                                                       ----------   ---------     ---------   ---------
          (Accrued) prepaid pension cost.....          $  (18,594)  $ (19,835)    $  19,345   $  19,144
                                                       ==========   =========     =========   =========
</TABLE>

        The  Canadian  prepaid  pension  cost is included in other assets on the
balance sheet.

        The  assumptions used in accounting for the plans in 1994, 1995 and 1996
were

<TABLE>
<CAPTION>
                                                           UNITED STATES                CANADA
                                                        -----------------------    --------------------
                                                        1994     1995     1996      1994    1995    1996
                                                        ----     ----     ----      ----    ----    ----
<S>                                                     <C>      <C>      <C>       <C>     <C>     <C>
          Estimated discount rate......................  8 1/2%  7 1/2%   7 1/2%    9%      8%      8%
          Estimated long-term rate of return on assets.  9%      9%       9%        9%      9%      9%
          Average rate of increase in employee
           compensation................................  5%      5%       5%        5 1/4%  5 1/4%  5 1/4%
</TABLE>

        On January 1, 1994,  GCSAP  initiated  a pension  plan  covering  hourly
employees at GCSAP's manufacturing facility. These employees ceased to be active
participants  under  the  GCC  hourly  pension  plan,   resulting  in  a  $1,200
curtailment gain.

        The dates used to measure plan assets and  liabilities  were October 31,
1995 and 1996 for all plans.  Plan  assets  are  invested  primarily  in stocks,
bonds, short-term securities and cash equivalents.

NOTE 5 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

        The Company  maintains several plans providing  postretirement  benefits
covering  substantially all hourly and the majority of salaried  employees.  The
long-term portion of accrued  postretirement benefit cost of $73,726 and $74,843
at December 31, 1995 and 1996, respectively, is included in other liabilities on
the balance sheet.

        The net  periodic  postretirement  benefit cost  included the  following
components:

<TABLE>
<CAPTION>
                                                               YEARS ENDED DECEMBER 31,
                                                              -------------------------
                                                               1994      1995       1996
                                                               ----      ----       ----
<S>                                                         <C>       <C>        <C>    
          Service cost (benefits earned during the year)..  $  1,350  $  1,384   $ 1,560
          Interest cost on projected postretirement benefit
           obligation.....................................     3,744     4,186     3,770
          Net amortization and deferral...................    (1,924)   (1,994)   (2,323)
                                                            --------  --------   -------
            Net periodic postretirement benefit cost......  $  3,170  $  3,576   $ 3,007
                                                            ========  ========   =======
</TABLE>

                                      -21-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

        The funded status and accrued  postretirement benefit obligations are as
follows:

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                                                   -------------------
                                                                    1995        1996
                                                                    ----        ----
<S>                                                             <C>          <C>   
          Accumulated postretirement benefit obligation:
               Retirees...................................      $  (35,664)  $ (35,844)
               Fully eligible plan participants...........          (9,570)    (10,620)
               Other active plan participants.............          (9,434)    (10,893)
                                                                ----------   ---------
          Accumulated postretirement benefit obligation...         (54,668)    (57,357)
          Plan assets at fair value.......................            --           --
                                                                ----------   --------
          Accumulated postretirement benefit obligation
           in excess of plan assets.......................         (54,668)    (57,357)
          Unrecognized net reduction in prior service costs        (14,241)    (12,632)
          Unrecognized net gain ..........................          (6,818)     (7,084)
                                                                ----------   ---------
          Accrued postretirement benefit cost.............      $  (75,727)  $ (77,073)
                                                                ==========   =========
</TABLE>

        The  assumptions  used in  accounting  for the  plans in 1995  were a 12
percent  health  care cost trend rate  (decreasing  to 7 1/2 percent in the year
2000 and beyond) and a 7 1/2 percent  discount rate for the U.S. plans and an 11
percent  health care cost trend rate  (decreasing  to 7 percent in the year 2000
and beyond), an 8 percent discount rate and a 5 1/4 percent salary scale for the
Canadian plans.

        The  assumptions  used in  accounting  for the  plans in 1996 were an 11
percent  health  care cost trend rate  (decreasing  to 7 1/2 percent in the year
2000 and beyond) and a 7 1/2 percent  discount rate for the U.S. plans and an 11
percent  health care cost trend rate  (decreasing  to 7 percent in the year 2000
and beyond), an 8 percent discount rate and a 5 1/4 percent salary scale for the
Canadian plans. A one percent  increase  in the  health  care  trend  rate would
increase the accumulated postretirement benefit obligation by $5,035 at year end
1996 and the net periodic cost by $457 for the year.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

        Future  minimum rental  payments for operating  leases having initial or
remaining  noncancellable  lease terms in excess of one year as of December  31,
1996 are as follows:

<TABLE>
<CAPTION>
              YEARS ENDING
              DECEMBER 31,
                 <S>                                           <C>     
                 1997.......................................   $ 12,226
                 1998.......................................      5,773
                 1999.......................................      3,701
                 2000.......................................      1,313
                 2001.......................................        226
                                                               --------
                                                               $ 23,239
</TABLE>

        Rental expense for the years ended December 31, 1994,  1995 and 1996 was
$13,088, $13,159 and $15,042, respectively.

                                      -22-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

        Parent Guaranty and Transfer  Agreement.  A restated parent guaranty and
transfer  agreement  between New Hampshire  Oak, ACI  International  Limited and
TOSOH  America,  Inc.  provides that in the event that either New Hampshire Oak,
ACI International  Limited or TOSOH America,  Inc. (such entities being referred
to as a  "transferring  parent"  or  "nontransferring  parent"  as  the  context
requires)  proposes  to  sell  or  otherwise  transfer  or  cause  to be sold or
transferred  the voting  securities of the Company,  the Andover Group,  Inc. or
TOSOH Wyoming,  Inc. (the respective  subsidiaries  constituting the partners of
GCSAP) as the case may be, the  nontransferring  parents will have the following
options:  (1) to purchase the  transferring  parent's  subsidiary's  interest in
GCSAP at fair market value; (2) to require the  transferring  parent to purchase
the  nontransferring  parents'  subsidiaries'  interest  in GCSAP at fair market
value; (3) to buy the voting securities to be sold by the transferring parent on
the same terms and conditions and at the same price as the  transferring  parent
proposes to sell or otherwise  transfer or cause to be sold or transferred  such
voting  securities;  or (4) to cause the  proposed  transferee  to purchase  the
nontransferring  parents' subsidiaries' interest in GCSAP for a price reflecting
the price to be paid by the proposed  transferee for such voting securities.  In
the event  that New  Hampshire  Oak ceases to own at least 51 percent of General
Chemical while General Chemical is a partner,  General Chemical shall pay to The
Andover Group, Inc. $2,833.

        Richmond Works July 26, 1993 Incident. On July 26,1993 a pressure relief
device on a railroad tank car  containing  oleum that was being  unloaded at the
Company's Richmond, California,  facility ruptured during the unloading process,
causing the release of a significant  amount of sulfur  trioxide.  Approximately
150  lawsuits  seeking  substantial  amounts of damages  were filed  against the
Company on behalf of in excess of 60,000  claimants  in  municipal  and superior
courts of California  (Contra  Costa and San Francisco  Counties) and in federal
court (United States  District Court for the Northern  District of  California).
All state court cases were coordinated  before a coordination trial judge (In Re
GCC Richmond Works Cases, JCCP No. 2906) and the federal court cases were stayed
until completion of the state court cases.

        After  several  months  of  negotiation   under  the  supervision  of  a
settlement  master,  the Company  and a  court-approved  plaintiffs'  management
committee  executed a  comprehensive  settlement  agreement  which  resolved the
claims of  approximately  95 percent of the claimants who filed lawsuits arising
out the July 26th  incident,  including the federal  court cases.  After a final
settlement  approval hearing on October 27, 1995, the  coordination  trial judge
approved  the  settlement  on November  22,  1995.  Pursuant to the terms of the
settlement  agreement,  the  Company,  with funds to be provided by its insurers
pursuant to the terms of its insurance policies,  has agreed to make available a
maximum of $180,000 to implement the  settlement.  In addition,  the  settlement
agreement  provides,  among other things,  that while claimants may "opt out" of
the  compensatory  damages  portion of the settlement and pursue their own cases
separate and apart from the class  settlement  mechanism,  they have no right to
opt out of the punitive damages portion of the settlement.  Consequently,  under
the terms of the settlement, no party may seek punitive damages from the Company
outside of those provided by the settlement.

        Notices of appeal of all or portions of the  settlement  approved by the
court were filed by five law firms representing  approximately  2,750 claimants,
with  approximately  2,700 of these claimants  represented by the same law firm.
Virtually all of these  claimants  have not specified the amount of their claims
in court  documents,  although the Company  believes that their alleged injuries
are no  different  in  nature or  extent  than  those  alleged  by the  settling
claimants. On May 8, 1996, the California Court of Appeals dismissed each of the
appeals that had been filed  challenging the trial court's approval of the class
action  settlement.  The Court of Appeals  dismissed the appeal  relating to the
trial  court's  rulings on  plaintiffs'  attorney's  fees on the ground that the
appealing  attorneys  lacked  standing  to  appeal.  The Court of  Appeals  also
dismissed  each of the other  pending  appeals,  ruling  that the trial  court's
orders and rulings approving the settlement were not presently appealable, if at
all, by the appealing claimants since

                                      -23-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

they had all elected to opt out of the settlement.  The appealing  attorneys and
some of the  appealing  claimants  then  filed a petition  for  review  with the
California  Supreme  Court  which on August 15,  1996  elected not to review the
Court of Appeals' decision.

        It is possible that one or more of the appealing  claimants,  once their
opt-out cases are finally  litigated through trial, may attempt to refile all or
a portion of the appeals  that were  dismissed  by the Court of  Appeals.  While
there can be no assurances  regarding  how an appellate  court might rule in the
event of such a  refiling,  the Company  believes  that the  settlement  will be
upheld on appeal.  If the settlement is upheld on appeal,  the Company  believes
that any further  liability  in excess of the amounts made  available  under the
settlement  agreement will not exceed the available  insurance  coverage,  if at
all, by an amount that could be material to its  financial  condition or results
of operations.  In the event of a reversal or  modification of the settlement on
appeal,  with respect to lawsuits by any then remaining  claimants (opt-outs and
settling  claimants  who have not signed  releases) the Company  believes  that,
whether or not it elects to terminate the settlement in the event it is reversed
or  modified  on appeal,  it will have  adequate  resources  from its  available
insurance  coverage to vigorously  defend these lawsuits  through their ultimate
conclusion, whether by trial or settlement. However, in the event the settlement
is  overturned  or  modified  on  appeal,  there  can be no  assurance  that the
Company's ultimate liability resulting from the July 26, 1993 incident would not
exceed the available  insurance coverage by an amount which could be material to
its  financial  condition or results of  operations,  nor is the Company able to
estimate or predict a range of what such ultimate liability might be, if any.

        The Company has  insurance  coverage  relating  to this  incident  which
totals $200,000.  The first two layers of coverage total $25,000 with a sublimit
of $12,000  applicable to the July 26, 1993  incident,  and the Company also has
excess  insurance  policies of $175,000  over the first two layers.  The Company
reached an  agreement  with the  carrier  for the first two layers  whereby  the
carrier  paid the Company  $16,000 in  settlement  of all claims the Company had
against  that  carrier.  In the third  quarter of 1994,  the Company  recorded a
$9,000 charge to earnings for costs which the Company  incurred  related to this
matter.  The  Company's  excess  insurance  policies,  which are  written by two
Bermuda-based  insurers,  provide  coverage for compensatory as well as punitive
damages.  Both  insurers have executed  agreements  with the Company  confirming
their  respective  commitments  to fund  the  settlement  as  required  by their
insurance  policies  with  the  Company  and  as  described  in  the  settlement
agreement.  In  addition,  these same  insurers  currently  continue  to provide
substantially the same insurance coverage to the Company.

        Environmental  Matters.   Accruals  for  environmental  liabilities  are
recorded based on current  interpretations of applicable  environmental laws and
regulations  when it is probable  that a  liability  has been  incurred  and the
amount of such liability can be reasonably estimated.  Estimates are established
based upon information available to management to date, the nature and extent of
the environmental  liability,  the Company's  experience with similar activities
undertaken,  estimates  obtained  from  outside  consultants  and the  legal and
regulatory  framework in the  jurisdiction  in which the  liability  arose.  The
potential costs related to  environmental  matters and their estimated impact on
future  operations are difficult to predict due to the  uncertainties  regarding
the extent of any required  remediation,  the complexity and  interpretation  of
applicable  laws and  regulations,  possible  modification  of existing laws and
regulations or the adoption of new laws or  regulations  in the future,  and the
numerous  alternative  remediation  methods and their related varying costs. The
material  components of the Company's  environmental  accruals include potential
costs, as applicable,  for  investigation,  monitoring,  remediation and ongoing
maintenance   activities  at  any  affected  site.   Accrued   liabilities   for
environmental  matters  were  $11,152 and $10,843 at December 31, 1995 and 1996,
respectively.  These amounts do not include estimated third-party recoveries nor
have they been discounted.

                                      -24-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

        By letter dated March 22, 1990 from the Environmental  Protection Agency
(the "EPA"),  the Company received a Notice of Potential  Liability  pursuant to
Section 107(a) of the  Comprehensive  Environmental  Response  Compensation  and
Liability Act of 1980 ("CERCLA"),  as amended, with respect to a site located in
Front  Royal,  Virginia,  owned at the time by Avtex  Fibers,  Inc.  (the "Avtex
Site"), which has since filed for bankruptcy.  A sulfuric acid plant adjacent to
the main Avtex Site was previously  owned and operated by the Company (the "acid
plant"). The letter requested that the Company perform certain activities at the
acid plant including  providing the security,  preventing  discharges,  removing
certain  specific  residue and sludges from two storage vessels and the transfer
line to the main Avtex facility and determining the extent of  contamination  at
the site,  if any. In April 1991,  the Company  submitted a draft work plan with
respect to the acid plant including each of the activities  requested by the EPA
discussed  above. The Company has provided for the estimated costs of $1,600 for
these activities in its accrual for environmental  liabilities.  The EPA has not
yet  responded  to  this  work  plan,  nor  has it  requested  that  an  initial
investigation  and  feasibility  study  for the acid  plant be  performed.  As a
result,  the extent of  remediation  required,  if any, is unknown.  The Company
believes that the acid plant is separate and divisible  from the main Avtex Site
and, as a result, is not subject to any liability for costs related thereto. The
Company will continue to vigorously assert this position with the EPA. There has
been very limited contact by the EPA with the Company over the past three years,
as it  appears  that the EPA is focused on  remediation  activities  at the main
Avtex Site.

        In addition to the matters  discussed  above, the Company is involved in
other claims,  litigation,  administrative  proceedings and  investigations  and
remediation  relative  to  environmental  matters.  Although  the  amount of any
ultimate  liability  which could arise with respect to these  matters  cannot be
accurately  predicted,  it is the opinion of  management,  based upon  currently
available information and the accruals established, that any such liability will
have no material adverse effect on the Company's financial condition.

NOTE 7 - RELATED PARTY TRANSACTIONS

TRANSITION AGREEMENT

        The  Company  is  party  to  an  agreement   (the  "Company   Transition
Agreement") providing for, among other things, the provision of certain services
to New Hampshire Oak by the Company,  the allocation between the Company and New
Hampshire  Oak of certain  ongoing  liabilities  incurred  when the  Company was
acquired by New  Hampshire  Oak and other  matters  governing  the  relationship
between the Company and New Hampshire Oak.

TAX SHARING AGREEMENT

        Under the terms of the Tax Sharing  Agreement between New Hampshire Oak,
GCG and General Chemical,  General Chemical will be responsible for its own U.S.
federal income tax liabilities for all periods beginning after May 26, 1986. For
this purpose,  General  Chemical will  generally be required,  during the period
that it is a consolidated subsidiary of New Hampshire Oak for federal income tax
purposes,  to pay GCG the amount of federal tax, if any, it would have  incurred
if it  filed  a  separate  consolidated  federal  income  tax  return  with  its
subsidiaries for such periods.  The Company is generally  responsible for all of
its own foreign, state and local income tax liabilities for all periods.

                                      -25-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

MANAGEMENT AGREEMENT

        The Company is party to the Management Agreement with New Hampshire Oak.
Pursuant to the Agreement, the Company was charged $2,906, $2,959 and $3,039 for
the years ended  December  31,  1994,  1995 and 1996,  respectively  for general
corporate  supervisory  services,  strategic  guidance  and  payments to Company
management  personnel in connection with incentive  compensation  programs.  The
Management Agreement expires in 1997 subject to extension.

NOTE 8 - PHANTOM EQUITY PLAN

        Key  employees  of General  Chemical  participated  in a phantom  equity
program (the "Plan")  established  by the Company.  Each equity unit  provided a
participant   with  the  opportunity  to  receive   payments,   based  upon  the
appreciation  in the value of the Company over a value  established in the Plan,
in the event of a sale, merger or public offering involving the Company.

       During the  second  quarter of 1996,  participants  in the Plan  received
rights in a  Restricted  Unit Plan  adopted by The General  Chemical  Group Inc.
replacing  their rights  earned  beginning in 1989 under the Plan;  the Plan was
then  terminated.  The Restricted  Unit Plan  authorizes the issuance of 850,000
units,  with each unit  representing  one share of Common  Stock of the  General
Chemical  Group to be issued to the  participant  upon the occurrence of certain
conditions. All awards are subject to a five year vesting schedule under which a
portion of each  participant's  award vests  annually.  Accordingly,  during the
second  quarter of 1996 the  Company  recorded an $8,309  charge  related to the
Restricted  Unit Plan for amounts earned pursuant to the terms of the Plan since
1989. The offsetting credit has been recorded as a capital contribution.

NOTE 9 - GEOGRAPHIC INFORMATION

        Geographic area information is summarized as follows:

<TABLE>
<CAPTION>

                                              UNITED STATES(1)  FOREIGN(2)  ELIMINATIONS(3)  TOTAL
<S>                                              <C>             <C>            <C>          <C>     
Net revenues:
        1994...................................  $361,693        $118,920       $(39,297)    $441,316
        1995...................................   372,706         122,659        (39,135)     456,230
        1996...................................   428,990         128,345        (48,715)     508,620

Income before extraordinary item:
        1994...................................  $ 12,980        $ 11,241       $    --      $ 24,221
        1995...................................       520          15,509            --        16,029
        1996...................................    26,790          11,943            --        38,733

Assets:
        1994...................................  $261,284        $ 94,898       $    --      $356,182
        1995...................................   255,247         100,088            --       355,335
        1996...................................   307,992         100,785            --       408,777
-----------------------------
(1)  Includes export sales amounting to $45,683, $57,669 and $71,413 for 1994, 1995 and 1996, respectively.
(2)  Principally of General Chemical Canada Holding Inc.
(3)  Sales between geographic areas are recorded at prices comparable to market prices charged to third party customers and
     are eliminated in consolidation.
</TABLE>

                                      -26-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

NOTE 10 - ADDITIONAL FINANCIAL INFORMATION

        The following are summaries of selected balance sheet items:

RECEIVABLES

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                                  ----------------------
                                                                  1995             1996
                                                                  ----             ----
<S>                                                            <C>              <C>     
               Trade.......................................    $ 78,497         $ 88,917
               Other.......................................       2,957            3,048
               Allowance for doubtful accounts.............      (5,014)          (4,677)
                                                               ---------        --------
                                                               $ 76,440         $ 87,288
                                                               ========         ========
</TABLE>

INVENTORIES


<TABLE>
<CAPTION>

                                                                        DECEMBER 31,
                                                                  ---------------------
                                                                  1995             1996
                                                                  ----             ----
<S>                                                            <C>              <C>     
               Raw materials...............................    $  9,053         $  9,567
               Work in process.............................       2,668            2,326
               Finished products...........................      15,927           14,506
               Supplies ...................................       7,779            8,045
                                                               --------         --------
                                                               $ 35,427         $ 34,444
                                                               ========         ========
</TABLE>

        Inventories valued at LIFO amounted to $17,019 and $15,328,  at December
31, 1995 and 1996,  respectively,  which was below estimated replacement cost by
$2,557 and $2,823.  The impact of LIFO  liquidations  in 1994, 1995 and 1996 was
not significant.

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                                                  -----------------------
                                                                  1995             1996
                                                                  ----             ----
<S>                                                            <C>              <C>      
PROPERTY, PLANT AND EQUIPMENT
               Land and improvements........................   $  22,298        $  26,367
               Machinery and equipment......................     250,336          288,636
               Buildings and leasehold improvements.........      25,262           26,497
               Construction in progress.....................      12,975           17,140
               Mines and quarries...........................      12,964           13,539
                                                               ---------        ---------
                                                                 323,835          372,179
               Less accumulated depreciation and
                amortization................................    (136,418)        (159,436)
                                                               ----------       ---------
                                                               $ 187,417        $ 212,743
                                                               ==========       =========
ACCRUED LIABILITIES

               Wages, salaries and benefits.................   $ 21,355         $  19,848
               Richmond incident............................     10,823               --
               Interest.....................................      6,092             5,752
               Taxes other than income taxes................     10,307            12,713
               Other........................................     22,703            21,587
                                                               --------         ---------
                                                               $ 71,280         $  59,900
                                                               ========         =========
</TABLE>



                                      -27-


<PAGE>
<PAGE>



                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

NOTE 11 - LONG-TERM DEBT

        Long-term debt consists of the following at December 31,
<TABLE>
<CAPTION>

                                                          MATURITIES      1995         1996
                                                          ----------      ----         ----
<S>                                                        <C>         <C>         <C>      
   Bank Term Loan - floating rate.......................   1996-2001   $ 100,000   $  82,609
   Senior Subordinated Notes - 9.25%....................     2003        100,000     100,000
   Canada Senior Notes - 9.09%..........................     1999         52,000      52,000
   $130,000 U.S. Revolving Credit Facility - floating rate   1999         21,000        --
                                                                          ------   ---------
   Total Debt...........................................                 273,000     234,609
   Less:  Current Portion...............................                  17,392      17,392
                                                                       ---------   ---------
   Net Long-Term Debt...................................               $ 255,608   $ 217,217
                                                                       =========   =========
</TABLE>

        Aggregate maturities of long-term debt for each of the years in the five
year period ending December 31, 2001 are $17,392,  $17,392, $69,392, $17,392 and
$13,041, respectively.

       The  U.S.  Revolving  Credit Facility allows  General Chemical to  borrow
up to  $130,000, including letters of credit of up to $30,000 through March  31,
1999.  The  unused letter of credit balance was $21,066 and $21,033  at December
31, 1995 and 1996, respectively. This facility bears interest at a rate equal to
a spread over a reference rate chosen by the Company from various  options.  The
rate in effect at December 31, 1995 was 6.8 percent.  At December 31, 1996 there
were no outstanding borrowings under this facility.

        General  Chemical  Canada  Limited  has  a  $15,000   (Canadian  Dollar)
Revolving Credit Facility maturing June 22, 1998, subject to one-year extensions
at the lender's  discretion.  This facility  bears interest at a rate equal to a
spread over a reference  rate chosen by General  Chemical  Canada  Limited  from
various  options.  At  December  31,  1995 and 1996,  there were no  outstanding
borrowings under this facility.

        Commitment  fees paid for all  facilities  were $354,  $350 and $414 for
1994, 1995 and 1996, respectively.

        The Bank Term Loan bears  interest  at a rate  equal to a spread  over a
reference rate chosen by the Company from various options. The rate in effect at
December 31, 1995 and 1996  including  effects of interest rate swap  agreements
(see Note 12) was 7.4 percent.

        The U.S. Revolving Credit Facility and the Bank Term Loan are secured by
(1) substantially  all of the assets of General Chemical,  (2) 65 percent of the
capital stock of General Chemical Canada Holding Inc., (3) General Chemical's 51
percent general  partnership  interest in GCSAP, and (4) all of the stock of the
other direct and indirect subsidiaries of General Chemical.

        While the U.S. and Canadian Revolving Credit Facilities,  Bank Term Loan
and the Canadian  Senior Notes are  outstanding,  the Company must meet specific
financial  tests,  on an ongoing  basis,  which are customary for these types of
facilities.

        During 1994, the Company recorded an  extraordinary  loss of $8,203 (net
of a tax benefit of $5,367) related to the retirement of certain indebtedness.

                                      -28-


<PAGE>
<PAGE>


                          GENERAL CHEMICAL CORPORATION
          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONCLUDED)
                             (DOLLARS IN THOUSANDS)

        General Chemical has covenanted in the indentures and agreements related
to the  Senior  Subordinated  Notes,  the Bank Term Loan and the U.S.  Revolving
Credit Facility that it will not declare or pay any cash dividends unless at the
time certain  conditions are met,  including that no event of default shall have
occurred and be continuing, that a certain minimum fixed charge ratio shall have
been met and that the aggregate  amount of all  restricted  payments  under such
indentures and agreements not exceed a maximum amount determined on the basis of
certain formulas. At December 31, 1996, the Company had available  approximately
$51,000 for dividend payments in accordance with these covenants.

NOTE 12 - FINANCIAL INSTRUMENTS

Interest Rate Swap Agreements

        The Company  periodically  enters into interest rate swap  agreements to
effectively  convert all or a portion of its  floating-rate  debt to  fixed-rate
debt in order to reduce the Company's risk to movements in interest rates.  Such
agreements  involve the exchange of fixed and floating  interest  rate  payments
over the life of the agreement without the exchange of the underlying  principal
amounts.  Accordingly,  the impact of  fluctuations  in interest  rates on these
interest  rate swap  agreements  is fully offset by the  opposite  impact on the
related debt.  Swap  agreements  are only entered into with strong  creditworthy
counterparties. The swap agreements in effect were as follows:

<TABLE>
<CAPTION>

                                      NOTIONAL                       INTEREST RATE
                DECEMBER 31,           AMOUNT      MATURITIES     RECEIVE(1)      PAY(2)
                ------------           ------      ----------     ----------      ----- 
<S>               <C>                 <C>           <C>              <C>           <C> 
                  1995.............   $ 75,000      1998-1999        5.9%          6.8%
                  1996.............   $ 75,000      1998-1999        5.5%          6.8%
</TABLE>

(1)     Three-month LIBOR.
(2)     Represents the weighted average rate.

        In  addition to the swap  agreements  described  above,  the Company has
entered  into a forward swap  agreement,  which will begin in 1998 and mature in
2002,  which has a notional  amount of $30,000 and a fixed  payment  rate of 6.6
percent.

Fair Value of Financial Instruments

        The estimated fair values of the Company's financial  instruments are as
follows:
<TABLE>
<CAPTION>
                                             DECEMBER 31, 1995            DECEMBER 31, 1996
                                          -----------------------      -----------------------
                                          CARRYING      FAIR           CARRYING      FAIR
                                           AMOUNT       VALUE           AMOUNT       VALUE
                                          --------      -----          --------      -----
<S>                                     <C>        <C>               <C>          <C>      
    Long-term debt....................  $ 273,000  $   277,000       $ 234,609    $ 238,967
    Unrealized loss on interest rate
     swap agreements..................  $    --    $    (3,600)       $   --       $ (1,200)
</TABLE>


        The fair values of cash and cash  equivalents,  receivables and payables
approximate   their  carrying  values  due  to  the  short-term  nature  of  the
instruments.

        The fair  value of the  Company's  long-term  debt was  based on  quoted
market prices for publicly traded notes and discounted cash flow analyses on its
nontraded debt. The fair value of the Company's interest rate swap agreements is
the  estimated  amount the Company would have to pay or receive to terminate the
swap  agreements  based upon  quoted  market  prices as  provided  by  financial
institutions which are counterparties to the swap agreements.

                                      -29-


<PAGE>
<PAGE>





ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
        WITH ACCOUNTANTS

       Not applicable.

                                      -30-


<PAGE>
<PAGE>




                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

<TABLE>
<CAPTION>

 EXHIBIT
 NUMBER                              DESCRIPTION OF INDEX

<S>     <C>                        
*        3(a)- Certificate  of  Incorporation  of the Company

*        3(b)- By-laws of the  Company

'D'      4(a)- Indenture, dated as of August 15,  1993, between  the Company and
               Continental Bank, National Association,  as trustee, with respect
               to the Senior Subordinated Notes

'D''D'   4(b)- Note  Agreement,  dated  as of  April 1,  1992,  among GC  Canada
               Limited ("GC Canada") and certain note  purchasers,  with respect
               to $52 million of 9.09% Senior Notes due 1999

'D'      4(c)- Credit  Agreement,  dated as of June 22, 1992,  between GC Canada
               and The  Toronto-  Dominion  Bank,  with respect to a $15 million
               revolving credit facility (the "GC Revolver")

'D''D'   4(d)- First Amendment to the GC Revolver

'D''D'   4(e)- Amended and Restated Credit Agreement and Revolving Credit Notes,
               dated as of September 15, 1993,  between the Company and Chemical
               Bank, as Administrative  Agent and NationsBank of North Carolina,
               National Association,  as Co-Agent,  with respect to $130 million
               revolving credit facility (the "Chemical Revolver")

'D''D'   4(f)- First  Amendment to Chemical  Revolver,  dated as of December 11,
               1995

'D''D'   4(g)- Term  Loan  Agreement  dated as of August  4,  1994  between  the
               Company and Chemical Bank, As Administrative  Agent,  NationsBank
               of North Carolina,  and National Association,  as Co-Agent,  with
               respect to a $100 million term loan (the "Term Loan")

*       10(a)- Transition Agreement  dated as of November  1, 1989,  between the
               Company and New Hampshire Oak, Inc.

'D'     10(b)- Amendment  to  the  Transition  Agreement  dated  as of  July  1,
               1991

'D'     10(c)- Amendment to the Transition Agreement dated as of January 1, 1992

</TABLE>




                                      -31-


<PAGE>
<PAGE>




<TABLE>

<S>     <C>                          
*       10(d)- Tax Sharing  Agreement,  dated as of September 30, 1989,  between
               the Company and New Hampshire Oak, Inc.

*       10(e)- Management  Agreement, dated  as of November 1, 1989, between the
               Company and New Hampshire Oak, Inc.

'D''D'  10(f)- Settlement  Agreement relating to July 26, 1993 Richmond incident
               litigation.

*       10(g)- The Company's Equity Program

*       10(h)- The Company's Salaried Employees' Pension Plan.

*       10(i)- New Hampshire Oak, Inc. Savings and Profit Sharing Plan

'D'     10(j)- Second  Amended and  Restated  Partnership  Agreement  of General
               Chemical  (Soda Ash)  Partners  ("GCSAP"),  dated June 30,  1992,
               among the Company,  The Andover  Group,  Inc., and TOSOH Wyoming,
               Inc.

'D'     10(k)- Amended and Restated  Parent  Guaranty  and  Transfer  Agreement,
               dated  June  30,  1992,   among  New  Hampshire  Oak,  Inc.,  ACI
               International Limited and TOSOH America, Inc.

'D'     10(l)- Amended and Restated Services Agreement,  dated June 30, 1992, by
               and between the Company and GCSAP.

'D'     10(m)- Employee Transfer Agreement,  dated June 30, 1992, by and between
               the Company and GCSAP.

'D'     10(n)- Guaranty dated as of June 30, 1992, from New Hampshire Oak, Inc.,
               for the benefit of GCSAP.

*       10(o)- First  Amendment  General  Chemical  Corporation  Equity  Program
               effective October 1, 1993

'D''D'  10(p)- The  General  Chemical  Group Inc.  Dividend  Award  Program,  as
               amended October 15, 1995, effective October 1, 1993

        27-    Financial Data Schedule

*       Incorporated  by  reference  to the  relevant  exhibit to the  Company's
        Registration Statement filed with the Securities and Exchange Commission
        (the "SEC") on August 23, 1989, File No. 33-30664.

'D'     Incorporated  by  reference  to the  relevant  exhibit to the  Company's
        Registration Statement  filed with the SEC on August  11,  1993 File No.
        33-64824.

'D''D'  Incorporated  by  reference  to the  relevant  exhibit  to  The  General
        Chemical Group Inc.'s  Registration  Statement filed with the SEC on May
        3, 1996, File No. 33-83766.

</TABLE>

FINANCIAL STATEMENTS

       See Item 8, begining on page 11.

FINANCIAL STATEMENT SCHEDULES

        See Index to Financial Statement Schedules on page 34.

REPORTS ON FORM 8-K

        No  report on Form 8-K has been  filed by the  Company  during  the last
quarter of the period covered by this report.

                                      -32-

<PAGE>
<PAGE>




                                   SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) 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,  in the  City of
Parsippany, State of New Jersey on the 26th of March 1997.

                                              GENERAL CHEMICAL CORPORATION

                                              By /s/ RICHARD R. RUSSELL
                                                 -------------------------------
                                                       RICHARD R. RUSSELL
                                                           PRESIDENT
                                                         March 25, 1997

        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

      NAME                               TITLE                           DATE
      ----                               -----                           ----
<S>                                 <C>                                  <C>
/s/ RICHARD R. RUSSELL              President (Principal Executive
--------------------------           Officer) and Director                 March 25, 1997
RICHARD R. RUSSELL        

/s/ RALPH M. PASSINO                 Chief Financial Officer,
--------------------------           Vice President of Administration
RALPH M. PASSINO                     (Principal Financial Officer)
                                     and Director                          March 25, 1997

/s/ KEVIN J. O'CONNOR               Controller (Principal Accounting
--------------------------           Officer)                              March 25, 1997 
KEVIN J. O'CONNOR                    

</TABLE>


                                      -33-


<PAGE>
<PAGE>





                                 GENERAL CHEMICAL CORPORATION
                            INDEX TO FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>

                                                                                         PAGE
                                                                                         ----
<S>                                                                                       <C>
   Schedule II - Valuation and Qualifying Accounts....................................... 35
</TABLE>

       Schedules  required  by Article 12 of  Regulation  S-X,  other than those
listed above,  are omitted because of the absence of the conditions  under which
they are  required  or because  the  required  information  is  included  in the
consolidated financial statements or the notes thereto.

                                      -34-


<PAGE>
<PAGE>




                                                                     SCHEDULE II

                          GENERAL CHEMICAL CORPORATION
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                 TRANSLATION
                                       BALANCE AT    ADDITIONS     DEDUCTIONS     ADJUSTMENT    BALANCE AT
                                        BEGINNING    CHARGED TO      FROM           DURING        END OF
                                        OF PERIOD      INCOME       RESERVES        PERIOD        PERIOD
                                       -----------   ----------    ----------    -----------   -----------
<S>                                      <C>         <C>            <C>          <C>           <C> 
Year ended December 31, 1994:
  Allowance for doubtful accounts.....    $5,242        $ 51         $ (56)         $(45)       $5,192

Year ended December 31, 1995:
  Allowance for doubtful accounts.....    $5,192        $193         $(351)         $(20)       $5,014

Year ended December 31, 1996:
  Allowance for doubtful accounts.....    $5,014        $119         $(456)        $  --        $4,677
</TABLE>

                                      -35-


<PAGE>
<PAGE>




                                     PART IV
                                  EXHIBIT INDEX
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                              DESCRIPTION OF INDEX                                 PAGE
-------                              --------------------                                 ----
<S>  <C>                                                                                  <C> 
*        3(a)- Certificate of Incorporation of the Company                                  --

*        3(b)- By-laws of the Company                                                       --

'D'      4(a)- Indenture,  dated as of August 15, 1993,  between the Company and
               Continental Bank, National Association,  as trustee, with respect
               to the Senior Subordinated Notes                                             --

'D''D'   4(b)- Note  Agreement,  dated  as of  April 1,  1992,  among GC  Canada
               Limited ("GC Canada") and certain note  purchasers,  with respect
               to $52 million of 9.09% Senior Notes due 1999.                               --

'D'      4(c)- Credit  Agreement,  dated as of June 22, 1992,  between GC Canada
               and The  Toronto-  Dominion  Bank,  with respect to a $15 million
               revolving credit facility (the "GC Revolver").                               --

'D''D'   4(d)- First Amendment to the GC Revolver.                                          --

'D''D'   4(e)- Amended and Restated Credit  Agreement and Revolving Credit Notes
               dated as of  September  15, 1993 between the Company and Chemical
               Bank, as Administrative  Agent and NationsBank of North Carolina,
               National Association,  as Co-Agent,  with respect to $130 million
               revolving credit facility (the "Chemical Revolver").                         --

'D''D'   4(f)- First  Amendment to Chemical  Revolver,  dated as of December 31,
               1995                                                                         --

'D''D'   4(g)- Term  Loan  Agreement  dated as of August  4,  1994  between  the
               Company and Chemical Bank, As Administrative  Agent,  NationsBank
               of North Carolina,  and National Association,  as Co-Agent,  with
               respect to a $100 million term loan (the "Term Loan").                       --

*       10(a)- Transition  Agreement  dated as of November 1, 1989,  between the
               Company and New Hampshire Oak, Inc.                                          --

'D'     10(b)- Amendment to the Transition Agreement dated as of July 1, 1991.              --

'D'     10(c)- Amendment to the Transition Agreement dated as of January 1, 1992.           --

</TABLE>

                                      -36-

<PAGE>
<PAGE>




<TABLE>

<S>     <C>                                                                               <C>
*       10(d)- Tax Sharing  Agreement,  dated as of September 30, 1989,  between
               the Company and New Hampshire Oak, Inc                                      --

*       10(e)- Management  Agreement,  dated as of November 1, 1989, between the
               Company and New Hampshire Oak, Inc                                          --

'D''D'  10(f)- Settlement  Agreement relating to July 26, 1993 Richmond incident
               litigation.                                                                 --

*       10(g)- The Company's Equity Program                                                --

*       10(h)- The Company's Salaried Employees' Pension Plan                              --

*       10(i)- New Hampshire Oak, Inc. Savings and Profit Sharing Plan                     --

'D'     10(j)- Second  Amended and  Restated  Partnership  Agreement  of General
               Chemical  (Soda Ash)  Partners  ("GCSAP"),  dated June 30,  1992,
               among the Company,  The Andover  Group,  Inc., and TOSOH Wyoming,
               Inc.                                                                        --

'D'     10(k)- Amended and Restated Parent Guaranty and Transfer Agreement dated
               June 30, 1992,  among New Hampshire Oak, Inc., ACI  International
               Limited and TOSOH America, Inc                                              --

'D'     10(l)- Amended and Restated  Services  Agreement dated June 30, 1992, by
               and between the Company and GCSAP                                           --

'D'     10(m)- Employee  Transfer  Agreement dated June 30, 1992, by and between
               the Company and GCSAP                                                       --

'D'     10(n)- Guaranty dated as of June 30, 1992, from New Hampshire Oak, Inc.,
               for the benefit of GCSAP                                                    --

*       10(o)- First  Amendment  General  Chemical  Corporation  Equity  Program
               effective October 1, 1993                                                   --

'D''D'  10(p)- The  General  Chemical  Group Inc.  Dividend  Award  Program,  as
               amended October 15, 1995, effective October 1, 1993                         --

        27   - Financial Data Schedule                                                     --

*       Incorporated  by  reference  to the  relevant  exhibit to the  Company's
        Registration Statement filed with the Securities and Exchange Commission
        (the "SEC") on August 23, 1989, File No. 33-30664.

'D'     Incorporated  by  reference  to the  relevant  exhibit to the  Company's
        Registration  Statement  filed with the SEC on August 11,  1993 File No.
        33-64824.

'D''D'  Incorporated  by  reference  to the  relevant  exhibit  to  The  General
        Chemical Group Inc.'s  Registration  Statement filed with the SEC on May
        3, 1996, File No. 33-83766.

</TABLE>

                                      -37-


                 STATEMENT OF DIFFERENCES

The dagger symbol shall be expressed as ................   'D'

<PAGE>