<PAGE>
 
<PAGE>


--------------------------------------------------------------------------------

--------------------------------------------------------------------------------



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q



(Mark One)
     X             QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
-----------
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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 1-13404

                         THE GENERAL CHEMICAL GROUP INC.

             (Exact name of Registrant as specified in its charter)

             DELAWARE                                        02-0423437
  (State of other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                      Identification Number)

           LIBERTY LANE
      HAMPTON, NEW HAMPSHIRE                                   03842
(Address of principal executive offices)                    (Zip Code)

       Registrant's telephone number, including area code: (603) 929-2606

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

The  number of shares of Common  Stock  outstanding  at  November  12,  1996 was
22,236,842.

--------------------------------------------------------------------------------


--------------------------------------------------------------------------------



<PAGE>
 
<PAGE>



                         THE GENERAL CHEMICAL GROUP INC.

                                    FORM 10-Q

                    QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996

                                      INDEX

<TABLE>
<CAPTION>
                                                                              PAGE NO.
                                                                              --------
<S>                                                                        <C>
PART I.   FINANCIAL INFORMATION:

    Item 1. Financial Statements

      Consolidated Statements of Operations - Three Months and

       Nine Months Ended September 30, 1995 and 1996.........................      1

      Consolidated Balance Sheets - December 31, 1995 and

       September 30, 1996....................................................      2

      Consolidated Statements of Cash Flows - Nine Months

       Ended September 30, 1995 and 1996.....................................      3

      Notes to the Consolidated Financial Statements.........................     4-8

    Item 2.  Management's Discussion and Analysis of Financial

                Condition and Results of Operations..........................    9-10

PART II. OTHER INFORMATION:

    Item 1.  Legal Proceedings...............................................     11

    Item 6.  Exhibits and Reports on Form 8-K................................     12

    SIGNATURES...............................................................     13

    EXHIBIT INDEX............................................................     14

    EXHIBITS.................................................................    15-16
</TABLE>


<PAGE>
 
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                         THE GENERAL CHEMICAL GROUP INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                        (IN THOUSANDS, EXCEPT SHARE DATA)

                                   (UNAUDITED)


<TABLE>
<CAPTION>


                                                  THREE MONTHS ENDED        NINE MONTHS ENDED
                                                     SEPTEMBER 30,            SEPTEMBER 30,
                                                 ---------------------   ----------------------
                                                   1995        1996        1995        1996
                                                   ----        ----        ----        ----
<S>                                           <C>         <C>           <C>       <C>
Net revenues...................................  $ 142,457   $ 161,967    $414,180   $ 466,668
Cost of sales..................................     97,270     110,237     288,363     320,360
Selling, general and administrative expense....     14,446      14,646      41,505      56,178
                                                 ---------   ---------    --------   ---------
Operating profit...............................     30,741      37,084      84,312      90,130
Interest expense...............................      6,637       5,640      20,097      18,349
Interest income................................        700         486       2,196       1,758
Foreign currency transaction (gains) losses....       (793)         26      (1,549)       (113)
Other (income) expense, net....................       (151)       (174)       (167)        234
                                                 ---------   ---------    --------   ---------
Income before income taxes and minority interest    25,748      32,078      68,127      73,418
Minority interest..............................      5,725       8,265      14,928      23,034
                                                 ---------   ---------    --------   ---------
Income before income taxes ....................     20,023      23,813      53,199      50,384
Income tax provision...........................      7,397       9,179      19,919      19,392
                                                 ---------   ---------    --------   ---------
         Net income ...........................  $  12,626   $  14,634    $ 33,280   $  30,992
                                                 =========   =========    ========   =========

Earnings per common and common
 equivalent share..............................  $     .64   $     .63    $   1.69   $    1.44
                                                 =========   =========    ========   =========

Dividends declared per share...................  $     .28   $     .05    $    .72   $    .075
                                                 =========   =========    ========   =========

Weighted average common and common
 equivalent shares outstanding................. 19,736,842  23,165,745   19,736,842 21,476,637
                                                ==========  ==========   ========== ==========
</TABLE>







        See the accompanying notes to consolidated financial statements.

                                       -1-


<PAGE>
 
<PAGE>



                         THE GENERAL CHEMICAL GROUP INC.

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                    DECEMBER 31,   SEPTEMBER 30
                                                                    ------------   ------------
                                                                         1995         1996
                                                                         ----         ----
                                                                                   (UNAUDITED)
<S>                                                               <C>            <C>
Current Assets:
     Cash and cash equivalents.....................................  $  19,025      $  48,018
     Receivables, net..............................................     93,231        108,914
     Inventories...................................................     41,970         37,527
     Deferred income taxes.........................................     14,041         13,432
     Other current assets..........................................      1,485          1,665
                                                                     ---------      ---------
         Total current assets......................................    169,752        209,556
Property, plant and equipment, net.................................    215,557        228,992
Other assets   ....................................................     46,016         38,216
                                                                     ---------      ---------
         Total assets..............................................  $ 431,325      $ 476,764
                                                                     =========      =========


                        LIABILITIES AND EQUITY (DEFICIT)

Current Liabilities:

     Accounts payable..............................................  $  50,987      $  52,512
     Accrued liabilities...........................................     83,018         77,775
     Income taxes payable..........................................      4,238          6,872
     Current portion of long-term debt.............................     21,892         17,392
                                                                     ---------      ---------
         Total current liabilities.................................    160,135        154,551
Long-term debt.....................................................    269,603        221,565
Other liabilities..................................................    188,645        194,628
                                                                     ---------      ---------
         Total liabilities.........................................    618,383        570,744
                                                                     ---------      ---------
Minority interest..................................................     28,278         40,516
                                                                     ---------      ---------
Equity (deficit):
     Preferred Stock, $.01 par value; authorized:
      10,000,000 shares; none issued or outstanding................        --             --
     Common Stock, $.01 par value; authorized:
      50,000,000 and 100,000,000 shares at December 31, 1995
      and September 30, 1996; issued and outstanding:
      19,736,842 and 7,925,375 shares at December 31, 1995
      and September 30, 1996.......................................        197             79
     Class B Convertible Common Stock, $.01 par value;
      authorized 40,000,000 shares; issued and outstanding:
      14,311,467 shares at September 30, 1996......................         --            143
     Capital deficit...............................................   (237,140)      (185,632)
     Foreign currency translation adjustments......................     (1,362)        (1,379)
     Retained earnings ............................................     22,969         52,293
                                                                     ---------      ---------
         Total equity (deficit)....................................   (215,336)      (134,496)
                                                                     ---------      ---------
         Total liabilities and equity (deficit)....................  $ 431,325      $ 476,764
                                                                     =========      =========
</TABLE>




      See the accompanying notes to the consolidated financial statements.

                                       -2-


<PAGE>
 
<PAGE>




                         THE GENERAL CHEMICAL GROUP INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          NINE MONTHS ENDED
                                                                             SEPTEMBER 30,
                                                                         ------------------
                                                                         1995          1996
                                                                         ----          ----
<S>                                                              <C>            <C>
Cash flows from operating activities:
   Net income ..................................................    $  33,280      $  30,992
   Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation and amortization...............................      21,584         22,393
     Net (gain) loss on disposition of long-term assets..........        (203)           379
     Unrealized exchange (gain) loss.............................      (2,085)             3
     Restricted unit plan costs..................................         --          10,932
     (Increase) in receivables...................................      (8,115)       (18,504)
     Decrease in inventories.....................................          66          4,430
     Increase (decrease) in accounts payable.....................      (1,909)         1,536
     (Decrease) in accrued liabilities...........................      (2,979)        (6,359)
     Increase in income taxes payable............................       1,456          2,646
     Increase (decrease) in other assets and liabilities.........      (1,669)         2,071
     Increase in minority interest...............................       3,211         12,238
                                                                    ---------      ---------
       Net cash provided by operating activities.................      42,637         62,757
                                                                    ---------      ---------
Cash flows from investing activities:
     Capital expenditures........................................     (22,564)       (35,580)
     Repayment of related party loans ...........................         --          14,000
     Proceeds from sales or disposals of long-term assets.......          351            312
                                                                    ---------      ---------
       Net cash (used for) investing activities.................      (22,213)       (21,268)
                                                                    ---------      ---------
Cash flows from financing activities:
     Net proceeds from initial public offering...................         --          40,600
     Proceeds from long-term debt................................       6,200         20,000
     Repayment of long-term debt.................................     (15,305)       (72,538)
     Dividends...................................................     (14,250)          (556)
                                                                    ---------      ---------
       Net cash (used for) financing activities..................     (23,355)       (12,494)
                                                                    ---------      ---------
Effect of exchange rate changes on cash..........................         485             (2)
                                                                    ---------      ---------
Increase (decrease) in cash and cash equivalents................       (2,446)        28,993
Cash and cash equivalents at beginning of period.................      28,701         19,025
                                                                    ---------      ---------
Cash and cash equivalents at end of period.......................   $  26,255      $  48,018
                                                                    =========      =========
Supplemental information:
     Cash paid for income taxes..................................   $  16,437      $  14,729
                                                                    =========      =========
     Cash paid for interest......................................   $  20,451      $  18,464
                                                                    =========      =========
</TABLE>



      See the accompanying notes to the consolidated financial statements.

                                       -3-


<PAGE>
 
<PAGE>



                         THE GENERAL CHEMICAL GROUP INC.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

             FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

       The accompanying  consolidated  financial statements include the accounts
of The General Chemical Group Inc. and its subsidiaries (the "Company").  On May
13, 1996 the Company authorized  40,000,000 shares of Class B Common Stock, $.01
par value, which has ten votes per share, is subject to significant restrictions
on  transfer   and  is   convertible   at  any  time  into  Common  Stock  on  a
share-for-share  basis.  The Company  also  increased  the amount of  authorized
Common Stock to 100,000,000 shares. Upon the filing of the Company's Amended and
Restated Certificate of Incorporation with the Secretary of State of Delaware on
such date, all of the then outstanding 19,736,842 shares of Common Stock held by
the Company's  existing  stockholders were  automatically  converted into a like
number of shares of the newly created Class B Common Stock. The Common Stock and
Class B Common Stock are  substantially  identical,  except for the disparity in
voting power, restriction on transfer and conversion provisions.

       The accompanying  unaudited  consolidated  financial statements have been
prepared by the Company  pursuant to the rules and regulations of the Securities
and  Exchange  Commission.  The  financial  statements  do not  include  certain
information and footnotes required by generally accepted accounting  principles.
In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments)  considered  necessary for a fair  presentation have been included.
Operating  results  for  the  nine  months  ended  September  30,  1996  are not
necessarily  indicative  of the results that may be expected for the year ending
December  31,  1996.  The  Company's  financial  statements  should  be  read in
conjunction with the financial  statements and the notes thereto included in The
Company's Final  Prospectus  dated May 15, 1996 as filed with the Securities and
Exchange Commission.

EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE

       The  computation  of primary  earnings  per common and common  equivalent
share for the three and nine months ended  September  30, 1995 and 1996 is based
on the weighted  average number of common shares  outstanding  during the period
and assumes the  exercise of all stock  options and  restricted  units using the
treasury stock method.  Fully diluted earnings per common and common  equivalent
share does not differ from  primary  earnings  per common and common  equivalent
share and is therefore not presented.

NOTE 2 - INITIAL PUBLIC OFFERING

       On May 21, 1996,  the Company and a principal  stockholder  (the "Selling
Stockholder") completed an initial public offering (the "Offering") of 7,925,375
shares of Common  Stock at $17.50 per share.  Of the shares  offered,  2,500,000
were issued and sold by the  Company.  The net  proceeds to the Company from the
Offering,  after deducting underwriter's discount and related fees and expenses,
were approximately $40,600.

       Contemporaneous  with the  Offering,  the Selling  Stockholder  converted
5,425,375  shares of Class B Common Stock to 5,425,375  shares of Common  Stock,
which were then sold in the  Offering.  The  Company  did not receive any of the
proceeds from the sale of such shares by the Selling Stockholder.

                                       -4-


<PAGE>
 
<PAGE>


                         THE GENERAL CHEMICAL GROUP INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

                FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

       The  Company  has  adopted a  Restricted  Unit Plan that  authorizes  the
issuance of 850,000 units, with each unit representing one share of Common Stock
to be  issued to the  participant  upon the  occurrence  of  certain  conditions
("vesting") unless the participant  elects to defer receipt thereof.  All awards
are subject to a five year tiered vesting schedule under which a portion of each
participant's award vests annually over a five year period. Dividend equivalents
on outstanding  units will accrue to the benefit of the participants and will be
paid at the time  dividends are paid to Common Stock  shareholders.  These units
were awarded  during the second  quarter of 1996  replacing the rights earned by
participants  beginning in 1989 under the Phantom  Equity Plan and certain other
prior equity  programs of the  Company.  These plans were then  terminated.  The
Company  recorded a charge to income of $10,530 with a contra  credit to capital
deficit, representing the amounts earned under the prior equity programs.

       The Company has also  adopted the 1996 Stock  Option and  Incentive  Plan
which provides for the grant of awards covering a maximum of 2,200,000 shares of
Common Stock.  During the second quarter of 1996, the Company granted  1,080,000
stock  options which vest and are  exercisable  at the initial  public  offering
price of $17.50 per share on dates ranging from May 1997 through May 2006.

NOTE 3 - RELATED PARTY TRANSACTIONS

Management Agreement

       The Company is party to a  management  agreement  with Latona  Associates
Inc. (a management and advisory  company which is controlled by a stockholder of
the  Company).  Pursuant to the  agreement,  the Company was charged  $4,125 and
$4,217 for the nine months ended September 30, 1995 and 1996, respectively,  for
corporate  supervisory  and  administrative  services and  strategic  advice and
guidance. The management agreement expires on December 31, 2004.

Notes Receivable

       In 1994,  the  Company  advanced  $5,000 and $9,000,  respectively,  to a
stockholder  and a former  stockholder  of the Company in the form of promissory
notes. During 1996 the promissory notes were prepaid in full.

NOTE 4 - ADDITIONAL FINANCIAL INFORMATION

       The components of inventories were as follows:


<TABLE>
<CAPTION>

                                                               DECEMBER 31,   SEPTEMBER 30,
                                                               ------------   -------------
                                                                   1995           1996
                                                                   ----           ----
                                                                               (unaudited)
<S>                                                          <C>            <C>

           Raw materials.......................................  $ 10,447       $  9,269
           Work in process.....................................     4,602          6,024
           Finished products...................................    19,061         14,444
           Supplies and containers.............................     7,860          7,790
                                                                  -------       --------
                                                                  $41,970       $ 37,527
                                                                  =======       ========
</TABLE>


                                       -5-


<PAGE>
 
<PAGE>


                         THE GENERAL CHEMICAL GROUP INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

             FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

NOTE 5 - LONG-TERM DEBT

        Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                         MATURITIES  DECEMBER 31, SEPTEMBER 30,
                                                         ----------  ------------ -------------
                                                                         1995         1996
                                                                         ----         ----
                                                                                   (unaudited)
<S>                                                    <C>         <C>           <C>
        GCC Debt:
          Bank Term Loan - floating rate............      1996-2001   $100,000     $  86,957
          Senior Subordinated Notes - 9.25%.........        2003       100,000       100,000
          Canada Senior Notes - 9.09%...............        1999        52,000        52,000
          U.S. Revolving Credit Facility
           - floating rate..........................        1999        21,000           --
        Toledo Debt:
          Bank Term Loan - floating rate............      1996-1998      8,250           --
          Revolving Credit Facility - floating rate.        1998         3,300           --
        PDI Debt:
          Bank Term Loan - floating rate............      1996-1998      6,945           --
                                                                      --------     --------
          Total Debt................................                   291,495       238,957
          Less:  Current Portion....................                    21,892        17,392
                                                                      --------     ---------
          Net Long-Term Debt........................                  $269,603     $ 221,565
                                                                      ========     =========
</TABLE>

NOTE 6 - DIVIDENDS

       On  September  18, 1996,  the  Company's  Board of  Directors  declared a
quarterly  cash  dividend  of $.05 per  share,  payable  October  17,  1996,  to
shareholders of record on October 3, 1996.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

       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  and  in  federal  court.  All  state  court  cases  were
coordinated  before a coordination  trial judge in Contra Costa County  Superior
Court.  The federal court cases were stayed until  completion of the state court
cases.

       On November  22,  1995,  the court  approved a  comprehensive  settlement
agreement  pursuant  to which the  Company,  with  funds to be  provided  by its
insurers  pursuant to the terms of the Company's  insurance  policies  agreed to
make available a maximum of $180,000 to implement the settlement.

                                       -6-


<PAGE>
 
<PAGE>


                         THE GENERAL CHEMICAL GROUP INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

             FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

       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  case  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.
The  deadline  for  claimants  electing to opt out of the  compensatory  damages
portion of the settlement was October 5, 1995. Fewer than 3,000 claimants, which
constitutes  approximately  5 percent  of the total  number of  claimants,  have
elected to so opt out.

       Under the  terms of the  settlement  agreement,  settling  claimants  may
receive  payment of their  claims prior to the  resolution  of any appeal of the
settlement  upon  providing,  among  other  things,  a signed  release  document
containing  language which fully  releases the Company from any further  claims,
either for  compensatory or punitive  damages,  arising out of the July 26, 1993
incident. Plaintiffs' liaison counsel are currently undertaking to obtain signed
releases  from the  approximately  95 percent of  claimants  who have elected to
participate in 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.
Based on papers filed by the appellants in the California Court of Appeals,  the
primary grounds for the appeal were that the settlement is not "fair, reasonable
and adequate"  under  California law, that the trial court erred in certifying a
class action for purposes of settlement  and in certifying a mandatory  punitive
damage class,  that the trial court  awarded  excessive  attorneys'  fees to the
plaintiffs'  management committee and plaintiffs' class counsel,  that the trial
court  exceeded its authority in reducing  contingent  fees payable to attorneys
for  representing  individual  claimants,  and that the trial court  erroneously
applied a state statute that governs  unclaimed  residuals  remaining from class
action settlements.

       On May 8, 1996,  the  California  Court of Appeals  dismissed each of the
appeals that have 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  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.  Notwithstanding
this decision, it is possible that one or more of the appealing claimants,  once
their cases are finally  litigated through trial, may attempt to refile all or a
portion of the appeals that have now been dismissed.

                                       -7-


<PAGE>
 
<PAGE>


                         THE GENERAL CHEMICAL GROUP INC.

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONCLUDED)

             FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

       While there can be no  assurances  regarding how the  California  Supreme
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  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 reversed 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.

                                       -8-


<PAGE>
 
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

September 30, 1996 Compared with December 31, 1995

Financial Condition

       Cash and cash  equivalents  were $48.0  million at September  30, 1996 as
compared with $19.0  million at December 31, 1995.  During the first nine months
of 1996 the  Company  generated  cash flow from  operating  activities  of $62.8
million,  received  proceeds from the initial public  offering of $40.6 million,
received  $14.0  million from the repayment of related party loans and used cash
of $52.5  million for net  repayment  of  long-term  debt and $35.6  million for
capital expenditures.

        The Company had working  capital of $55.0  million at September 30, 1996
as compared  with $9.6 million at December 31,  1995.  This  increase in working
capital reflects higher cash and accounts  receivable coupled with lower accrued
liabilities and current portion of long-term  debt,  partially  offset by higher
income taxes payable and lower inventory balances.

Results of Operations

       Net revenues for the three and nine month  periods  ended  September  30,
1996 increased 14 percent and 13 percent to $162.0  million and $466.7  million,
respectively,  from $142.5 million and $414.2 million for the comparable periods
in 1995.  The  increase in both  periods is the result of  increases in both the
Chemical and  Manufacturing  Segments.  The increase in the Chemical Segment for
both  periods  is  primarily  due to  favorable  soda  ash  pricing,  as well as
continued performance  improvements in all other product lines. The increase for
both periods in the  Manufacturing  Segment  reflects higher volumes and product
mix improvements.

       Gross profit for the three and nine month  periods  ended  September  30,
1996  increased 14 percent and 16 percent to $51.7  million and $146.3  million,
respectively,  from $45.2 million and $125.8  million for the  comparable  prior
year periods.

       Gross profit as a percentage of sales remained constant at 32 percent for
the three  months  ended  September  30, 1995 and 1996 with  favorable  soda ash
pricing  being  offset  by  higher  manufacturing  expenses.  Gross  profit as a
percentage of sales for the nine months ended September 30, 1996 increased to 31
percent from 30 percent for the same period in 1995.  Favorable soda ash pricing
and product mix improvement,  partially offset by higher manufacturing expenses,
account for this improvement.

       Selling,  general  and  administrative  expense  as a  percentage  of net
revenues was 9 percent and 12 percent for the three and nine month periods ended
September 30, 1996,  respectively,  versus 10 percent for both comparable  prior
year periods.  The increase over the prior year for the nine month period is due
to the recording of a one-time  charge of $12.5 million  related  primarily to a
new  Restricted  Unit Plan created by the Company which  replaces  certain prior
equity  programs.  The decrease for the three month period ended  September  30,
1996 was due to the higher sales level.

       Interest expense for the three and nine month periods ended September 30,
1996 was $5.6 million and $18.3  million,  respectively,  which was $1.0 million
and $1.7 million lower, respectively, than the comparable prior year levels as a
result of lower outstanding debt balances.

       Interest  income for the three and nine month periods ended September 30,
1996 was $1.8  million and $.5 million,  respectively,  which  approximated  the
prior year levels.

                                       -9-


<PAGE>
 
<PAGE>


       The foreign  currency  transaction  (gains) losses for the three and nine
month  periods  ended  September  30, 1996 were $.03 million and $(.1)  million,
respectively,  versus  gains  of  $(.8)  million  and  $(1.6)  million  for  the
comparable  periods  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
is noncash.

       Minority  interest for the three and nine month periods  ended  September
30, 1996 was $8.3 million and $23.0 million,  respectively,  versus $5.7 million
and $14.9  million  for the  comparable  periods in 1995.  The  increase in both
periods reflect the higher earnings of General Chemical (Soda Ash) Partners.

       Net income was $14.6  million  and $31.0  million  for the three and nine
month periods ended September 30, 1996,  respectively,  versus $12.6 million and
$33.3 million for the comparable  periods in 1995, for the foregoing reasons and
in particular,  the one-time  charge related to the Restricted Unit Plan for the
nine months ended September 30, 1996.

                                      -10-


<PAGE>
 
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

       The  following  developments  have  occurred  with respect to this matter
since the filing of the Company's  Quarterly  Report on Form 10-Q for the period
ended June 30, 1996:

       Richmond  Works July 26, 1993  Incident.  In  connection  with efforts by
plaintiffs'  liaison counsel to obtain signed releases from the approximately 95
percent of claimants who have elected to  participate in the  settlement,  as of
September 30, 1996 the Company had already received releases from  approximately
94  percent  of the  settling  claimants.  Final  payments  to  the  plaintiffs'
management  committee on behalf of these settling  claimants have been made with
funds provided  principally by the Company's  insurers  pursuant to the terms of
the insurance policies described in the Company's Final Prospectus,  and further
payments will be made as additional releases are received and reviewed.

       With  respect  to  the  notices  of  appeal  of all  or  portions  of the
settlement  approved  by the  court  which  have  been  filed by five law  firms
representing  approximately  2,750 claimants (2,700  represented by the same law
firm),  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.
Based on papers filed by the appellants  with the  California  Court of Appeals,
the primary grounds for appeal were that the settlement is not "fair, reasonable
and adequate"  under  California law, that the trial court erred in certifying a
class action for purposes of settlement  and in certifying a mandatory  punitive
damage class,  that the trial court  awarded  excessive  attorneys'  fees to the
plaintiffs'  management committee and plaintiffs' class counsel,  that the trial
court  exceeded its authority in reducing  contingent  fees payable to attorneys
for  representing  individual  claimants,  and that the trial court  erroneously
applied a state statute that governs  unclaimed  residuals  remaining from class
action settlements.

       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 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  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.  Notwithstanding  this
decision,  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 have now been dismissed.

       For additional information, refer to the Company's Final Prospectus dated
May 15, 1996 and  Quarterly  Report on Form 10-Q for the quarter  ended June 30,
1996 as filed with the Securities and Exchange Commission.

                                      -11-


<PAGE>
 
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       a)  Exhibits:

           (11)  Computation of Earnings per Common and Common Equivalent Share.

           (27)  Financial Data Schedule

       b)  No  report  on  Form  8-K has been filed during the period covered by
           this report.

                                      -12-


<PAGE>
 
<PAGE>


                                   SIGNATURES

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

                                          THE GENERAL CHEMICAL GROUP INC.
                                          -------------------------------
                                                   (Registrant)

Date    November 11, 1996          /s/Richard R. Russell
     -----------------------          ---------------------------------
                                      RICHARD R. RUSSELL
                                      Director, President and Chief Executive
                                       Officer (Principal Executive Officer)

Date    November 11, 1996          /s/Ralph M. Passino
     -----------------------          ---------------------------------
                                      RALPH M. PASSINO
                                      Vice President and Chief Financial Officer
                                       (Principal Financial Officer)

                                      -13-


<PAGE>
 
<PAGE>



                                  EXHIBIT INDEX

<TABLE>
<CAPTION>


EXHIBIT NO.                       DESCRIPTION                             PAGE
-----------                       -----------                             ----
<S>              <C>                                                   <C>
   11              Computation  of  Net  Earnings  per  Common  and        15
                   common equivalents shares for the three and nine
                   months ended September 30, 1995 and 1996

  27               Financial Date Schedule (EDGAR filings only)            16

</TABLE>

                                      -14-


<PAGE>
 
<PAGE>