<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q

                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 1997
                                        
                          COMMISSION FILE NO. 1-9699




                         BORDEN CHEMICALS AND PLASTICS
                              LIMITED PARTNERSHIP

                 DELAWARE                            31-1269627
          (STATE OF ORGANIZATION)       (I.R.S. EMPLOYER IDENTIFICATION NO.)

  HIGHWAY 73, GEISMAR, LOUISIANA 70734               614-225-4482
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)    (REGISTRANT'S TELEPHONE NUMBER)



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

     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 ___.
                                              ---        

                                 -------------
     Number of Common Units outstanding as of the close of business on May 9,
1997: 36,750,000.

================================================================================

                                       1
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER UNIT DATA)

<TABLE>
<CAPTION>
 
 
                                           THREE MONTHS ENDED
                                          ---------------------
<S>                                       <C>         <C>
 
 
                                          MARCH 31,   MARCH 31,
                                               1997        1996
                                           --------    --------
 
REVENUES
Net trade sales ........................   $162,917    $144,973
Net sales to related parties ...........     31,765      25,612
                                           --------    --------
                             
Total revenues .........................    194,682     170,585
                                           --------    --------
               
EXPENSES
Cost of goods sold
  Trade ................................    157,942     139,580
  Related Parties ......................     30,095      25,239
Marketing, general & administrative                             
 expense ...............................      5,441       5,635 
Interest expense .......................      5,250       5,350 
Other expense, including minority       
interest................................        361         878
                                           --------    --------
     Total expenses ....................    199,089     176,682
                                           --------    --------
                         
                                         
Net (loss) .............................     (4,407)     (6,097)
Less 1% General Partner                  
   interest.............................         44          61
                                           --------    --------
Net (loss) applicable to Limited          
Partners' interest .....................   $( 4,363)   $ (6,036)
                                           ========    ========
                                  
                                  
 
 
PER UNIT DATA, NET OF 1% GENERAL
PARTNER INTEREST:                                               
Net (loss) per Unit ....................    $( 0.12)     $(0.16)
                                           ========    ======== 
 
Average number of Units outstanding                             
during the year ........................     36,750      36,750 
                                           ========    ======== 
Cash distribution declared per Unit ....      $0.10       $0.10 
                                           ========    ========  
</TABLE>                                                         

                                       2
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
 
                                                 THREE MONTHS
                                          -------------------------
 
                                            MARCH 31,    MARCH 31,
                                              1997          1996
                                          -------------  ----------
 
CASH FLOWS FROM OPERATIONS
<S>                                       <C>            <C>
 
Net (loss) ..............................      ($4,407)    ($6,097)
 
Adjustments to reconcile net (loss) to
  net cash provided by operating
  activities:                                   
Depreciation ............................       12,410      12,192 
Increase (decrease) in cash from changes
  in certain assets and liabilities:
  Receivables ...........................      (14,449)     (2,888)
  Inventories ...........................        6,160       8,527 
  Payables ..............................        1,103     (15,168)
  Incentive distribution                                            
    payable .............................            0      (1,910) 
  Accrued interest ......................        4,750       4,744  
Other, net ..............................       (5,806)     (8,425) 
                                              --------    --------   
                                               (   239)     (9,025) 
                                              --------    --------   
 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures ...................        (1,567)     (3,115)
                                              --------    --------   

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings,                                
  (net).................................             0      10,000  
Cash distributions paid.................        (3,712)    (21,179) 
                                              --------    -------- 
                                                (3,712)    (11,179)
                                              --------    -------- 
 
(Decrease) increase in cash and                                     
  equivalents.............................      (5,518)    (23,319) 
Cash and equivalents at beginning of                               
  period..................................      10,867      32,421 
                                              --------    --------

Cash and equivalents at end of period.....    $  5,349    $  9,102 
                                              ========    ========
SUPPLEMENT DISCLOSURES OF CASH FLOW
  INFORMATION                                                        
Interest paid during the                                           
  period..................................    $    500    $    606
                                              ========    ======== 
</TABLE>

                                       3
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
 
 
ASSETS                                    MARCH  31, 1997   DECEMBER 31, 1996
----------------------------------------  ----------------  ------------------
<S>                                       <C>               <C>
 
Cash and equivalents....................        $   5,349           $  10,867
Accounts receivable (less allowance for
 doubtful accounts of $642 an $589
 respectively)                                      
 Trade..................................           88,206              72,908
Related Parties ........................           21,298              22,147
Inventories                              
 Finished and in process goods..........           30,020              36,174
 Raw materials and supplies.............            7,782               7,788 
Other current assets....................            2,152               2,579
                                                ---------           ---------
 Total current assets...................          154,807             152,463
                                                ---------           ---------
Investments in and advances to            
 affiliated companies....................           4,410               4,366
Other assets............................           53,395              49,405
                                                ---------           ---------
                                                   57,805              53,771
                                                ---------           ---------
 
Plant, property and equipment                                                 
 Land....................................          14,970              14,970
 Buildings...............................          44,597              44,597
 Machinery and equipment.................         646,186             644,619
                                                ---------           --------- 
                                                  705,753             704,186
Less accumulated depreciation............        (397,125)           (384,715)
                                                ---------           ---------
     Net plant, property and equipment            308,628             319,471
                                                ---------           ---------
             
          Total assets                          $ 521,240           $ 525,705
                                                =========           =========
 
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
 
Accounts and drafts payable .............       $  62,915           $  61,812
Cash distributions payable ..............           3,712               3,712
Short-term borrowings ...................          25,000              25,000
Accrued interest ........................           7,935               3,185
Other accrued liabilities ...............          14,526              16,516
                                                ---------           ---------
  Total current liabilities .............         114,088             110,225
                                           
Long-term debt ..........................         200,000             200,000
Other liabilities .......................           5,483               5,609
Minority interest in consolidated 
 subsidiary .............................           1,488               1,571
                                                ---------           ---------

        Total liabilities                         321,059             317,405
                                                ---------           ---------
 
Commitments and contingencies
Partners' capital
 Limited Partners .......................         199,642             207,680
 General Partner ........................             539                 620
                                                ---------           ---------
   Total Partners' capital ..............         200,181             208,300
                                                ---------           ---------
                                                                              
        Total liabilities and Partners'
          capital .......................       $ 521,240           $ 525,705 
                                                =========           =========
</TABLE>

                                       4
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

            CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                                  (UNAUDITED)
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                              GENERAL
                                              PARTNERS         PARTNER        TOTAL
                                          -----------------  ------------  --------------
<S>                                       <C>                <C>           <C>
                                                                              
Balance at December 31, 1995                 $  215,762      $      702      $  216,464  
  Net (loss)..............................       (6,036)            (61)         (6,097)
  Cash distributions declared.............       (3,675)           ( 37)     $   (3,712)
                                             -----------     ----------      ----------     
Balances at March 31, 1996 ...............   $  206,051      $      604      $  206,655
                                             ==========      ==========      ==========
                                               
Balance at December 31, 1996                 $  207,680      $      620      $  208,300 
 Net (loss) ............................         (4,363)            (44)         (4,407)
 Cash distributions declared ...........         (3,675)            (37)         (3,712)
                                             ----------      ----------      ----------
Balances at March 31, 1997 .............     $  199,642      $      539      $  200,181
                                             ==========      ==========      ==========
</TABLE>

                                       5
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                  (IN THOUSANDS EXCEPT UNIT AND PER UNIT DATA)


1. INTERIM FINANCIAL STATEMENTS


The accompanying unaudited interim consolidated condensed financial statements 
contain all adjustments, consisting only of normal recurring adjustments, which 
in the opinion of BCP Management, Inc. (the "General Partner") are necessary for
a fair statement of the results for the interim periods.  Results for the 
interim periods are not necessarily indicative of the results for the 
full year.

Per Unit data in the accompanying financial statements is derived by 
subtracting the General Partner 1% interest from the income captions and 
dividing the results by the Average Units Outstanding.

In February 1997, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share." SFAS No. 
128 establishes new standards for computing and presenting earnings per share. 
The Partnership is required to adopt the provisions of SFAS No. 128 for its 
consolidated financial statements for the year ended December 31, 1997 and 
subsequent interim periods. Upon adoption, the standard also requires the 
restatement of all prior period earnings per Unit information presented. The 
adoption of SFAS No. 128 is not expected to have a material effect on the 
Partnership's earnings per Unit computations or disclosures.

2. ENVIRONMENTAL AND LEGAL PROCEEDINGS

On October 27, 1994, the U.S. Department of Justice ("DOJ"), at the request of
the U.S. Environmental Protection Agency (the "EPA"), filed an action against
the Partnership and the General Partner in the U.S. District Court for the
Middle District of Louisiana. The complaint seeks facility-wide corrective
action and civil penalties for alleged violations of the federal Resource,
Conservation and Recovery Act ("RCRA"), the federal Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), and the Clean Air Act at
the Geismar complex. If the Partnership is unsuccessful in this proceeding, or
otherwise subject to RCRA permit requirements, it may be subject to three types
of costs: (i) corrective action; (ii) penalties; and (iii) costs needed to
obtain a RCRA permit, portions of each which could be subject to the
Environmental Indemnity Agreement ("EIA") discussed below. As to penalties,
although the maximum statutory penalties that would apply in a successful
enforcement action by the United States would be in excess of $150,000,
management believes that, assuming the Partnership is unsuccessful, based on
information currently available, and an analysis of relevant case law and
administrative decisions, the more likely amount of any liability for civil
penalties would not exceed several million dollars.

The Partnership is subject to extensive federal, state and local environmental
laws and regulations which impose limitations on the discharge of pollutants
into the air and water, establish standards for the treatment, storage,
transportation and disposal of solid and hazardous wastes, and impose
obligations to investigate and remediate contamination in certain circumstances.
The Partnership has expended substantial resources, both financial and
managerial, and it anticipates that it will continue to do so in the future.
Failure to comply with the extensive federal, state and local environmental laws
and regulations could result in significant civil or criminal penalties, and
remedation costs.

Under the EIA, Borden, Inc. ("Borden") has agreed, subject to certain specified
limitations, to indemnify the Partnership in respect of environmental
liabilities arising from facts or circumstances that existed and requirements in
effect prior to November 30, 1987, the date of the initial sale of the Geismar
and Illiopolis plants to the Partnership. The Partnership is responsible for
environmental liabilities arising from facts or circumstances that existed and
requirements that become effective on or after such date. With respect to
certain environmental liabilities that may arise from facts or circumstances
that existed and requirements in effect both prior to and after such date,
Borden and the Partnership will share liabilities on an equitable basis
considering all of the facts and circumstances including, but not limited to,
the relative contribution of each to the matter and the amount of time each has
operated the assets in question (to the extent relevant).  No claims can be made
under the EIA after November 30, 2002, and no claim can, with certain
exceptions, be made with respect to the first $500 of liabilities which Borden
would otherwise be responsible for thereunder in any year, but such excluded
amounts shall not exceed $3,500 in the aggregate.  Excluded amounts under the
EIA have aggregated approximately $3,500 through March 31, 1997.

In connection with potential environmental matters, a $4,000 provision was
included in the Partnership's third quarter 1994 operating results.  Because of
various factors (including the nature of any settlement with appropriate
regulatory authorities or the outcome of any proceeding, actual environmental
conditions, the scope of the application of the EIA and the timing of actions,
if any, required to be taken by the Partnership), the Partnership cannot
reasonably estimate 

                                       6
<PAGE>
 
the full range of costs it might incur with respect to the environmental matters
discussed herein. The costs incurred in any quarter or year could be material to
the Partnership's results of operations for such quarter or year, although, on
the basis of the relevant facts and circumstances, management believes this to
be unlikely. However, management believes that such costs should not have a
material adverse effect on the Partnership's financial position.

The Partnership is subject to legal proceedings and claims which arise in the
ordinary course of business.  In the opinion of the management of the
Partnership, the amount of the ultimate liability, taking into account its risk
retention program and EIA with Borden, would not materially affect the financial
position or results of operations of the Partnership.

                                       7
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------------------------------------------------------------------------------
OF OPERATIONS
-------------

RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1997 COMPARED TO QUARTER ENDED MARCH 31, 1996

Revenues

Total revenues during the first quarter of 1997 increased $24.1 million or 14%
to $194.7 million from $170.6 million in the first quarter of 1996.  This
increase was the result of a $19.6 million increase in PVC Polymers Products
revenues and a $9.7 million increase in Methanol and Derivatives revenues,
partially offset by a $5.2 million decrease in Nitrogen Products revenues.

Total revenues for PVC Polymers Products increased $19.6 million as a result of
a 5% increase in sales volumes and a 12% increase in selling prices. The selling
price increase was due to strong PVC resin demand and partially successful
efforts to pass through raw material cost increases.

Total revenues for Methanol and Derivatives increased $9.7 million as a result
of a 32% increase in selling prices, partially offset by a 3% decrease in sales
volumes. The high raw material natural gas costs of 1996 that continued into
1997 have caused industry pricing to increase significantly, as have several
recent production disruptions other producers have experienced.

Total revenues for Nitrogen Products decreased $5.2 million as a result of a 6%
decrease in selling prices along with a 15% decrease in sales volumes.  Prices
and volumes in 1997 have been negatively affected by reduced demand, in part
caused by the flooding of the midwestern United States river systems.

Cost of Goods Sold

Total cost of goods sold increased 14% to $188.0 million in the current period
from $164.8 million in the year-ago period. Raw material costs are a significant
component of cost of goods sold. Natural gas, the Partnership's largest raw
material, increased slightly from last year's very high costs, further
depressing margins. The Partnership's other major raw materials - ethylene,
chlorine and VCM - all posted significant increases from the 1996 period. The
increase was also the result of the increased PVC volume discussed above,
partially offset by decreased volumes in Methanol and Derivatives and Nitrogen
Products. Expressed as a percentage of total revenues, cost of goods sold
remained constant at 97% of total revenues in 1997, a depressed gross margin
level, and was the primary factor in the Partnership's net loss for the
quarter.

Gross margins for PVC Polymers Products remained in a slight negative position
as raw material ethylene, chlorine and VCM cost increases offset improved
selling prices and volumes. Gross margins for Methanol and Deriv atives improved
to moderate profitability from a slight negative position as a result of the
improved selling prices discussed above. Margins continued to be depressed due
to very high raw material natural gas costs.

Gross margins for Nitrogen Products declined significantly to near breakeven due
to the selling price and volume declines discussed above. As with Methanol and
Derivatives, the raw material natural gas costs depressed margins for the first
quarter of 1997 and the year-ago period.

Net (Loss)

Net (loss) was  $4.4 million compared to $6.1 million in 1996.  As discussed
above, the primary reasons for the depressed operating performance were high raw
material costs and declines in Nitrogen Products selling prices and volumes,
offset by improved Methanol and  Derivatives and PVC selling prices.

                                       8
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES

Cash Flows from Operations.  Cash flows from operations remained slightly
--------------------------
negative in 1997, primarily due to the net (loss) and the increase in
receivables, partially offset by non-cash depreciation expense and reduced
inventory levels.

Cash Flows from Investing Activities.  First quarter 1997 capital expenditures
------------------------------------
totaled $1.6 million. Capital expenditures for the first quarter 1996 were $3.1
million.

Cash Flows from Financing Activities.  The Partnership makes quarterly
------------------------------------
distributions to Unitholders and the General Partner of 100% of its Available
Cash.  Available Cash means generally, with respect to any quarter, the sum of
all cash receipts of the Partnership plus net reductions to reserves established
in prior quarters, less all of its cash disbursements and net additions to
reserves in such quarter.  The General Partner may establish reserves to provide
for the proper conduct of the Partnership's business, to stabilize distributions
of cash to Unitholders and the General Partner and as necessary to comply with
the terms of any agreement or obligation of the Partnership.

Cash distributions of $3.7 million were made during the first quarter 1997
compared to $21.2 million in the year-ago period.  These amounts reflect the
payment of cash distributions declared for the immediately proceeding quarters.
Cash distributions with respect to interim periods are not necessarily
indicative of cash distributions with respect to a full year. Moreover, due to
the cyclical nature of the Partnership's business, past cash distributions are
not necessarily indicative of future cash distributions.

There are various seasonality factors affecting results of operations and,
therefore, cash distributions. In addition, the amount of Available Cash
constituting Cash from Operations for any period does not necessarily correlate
directly with net income for such period because various items and transactions
affect net income and Available Cash constituting Cash from Operations
differently. For example, depreciation reduces net income but does not affect
Available Cash constituting Cash from Operations, while changes in working
capital items (including receivables, inventories, accounts payable and other
items) generally do not affect net income but do affect such Available Cash.
Moreover, as provided for in the Partnership Agreements with respect to the
Partnership and the Operating Partnership, certain reserves may be established
which affect Available Cash constituting Cash from Operations but do not affect
cash balances in financial statements. Such reserves have generally been used to
set cash aside for debt service, capital expenditures and other accrued items.

Liquidity

The Partnership expects to satisfy its cash requirements through internally
generated cash and borrowings.  During 1995, the Partnership entered into a
Revolving Credit Facility which provided a $100.0 million line of credit for
capital expenditures, working capital and general partnership purposes.  The
amount available under the facility reduced to $75.0 million on January 1, 1996,
and to $50.0 million on January 1, 1997 and terminates December 31, 1997. The
facility may be extended for one year with the consent of the lenders.
Borrowing under this facility was $25 million at March 31, 1997.

                                       9
<PAGE>
 
                           PART II OTHER INFORMATION


Item 1. Legal Proceedings
-------------------------

There is incorporated by reference herein the information regarding legal
proceedings in Item 3 of Part I of the Partnership's 1996 Annual Report on Form
10-K and Note 2 to the consolidated condensed financial statements in Part I
hereof.



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

On April 8, 1997, the Partnership filed a Form 8-K under Item 5 to disclose its
Agreement and Plan of Conversion to corporate status and the Partnership's newly
adopted Rights Agreement.

                                       10
<PAGE>
 
SIGNATURE

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.

                                    BORDEN CHEMICALS AND PLASTICS
                                    LIMITED PARTNERSHIP
                                     By BCP Management, Inc.,
                                     General Partner


                               By        /s/ James O. Stevning
                                  ---------------------------------------
                                             James O. Stevning
                                Vice President, Chief Financial Officer and
                                  Treasurer 
                                Principal Accounting Officer


May 12, 1997

                                       11