<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 June 30, 1997
                                        
                          COMMISSION FILE NO. 1-9699




                         BORDEN CHEMICALS AND PLASTICS
                              LIMITED PARTNERSHIP

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

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

     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 August 8,
1997: 36,750,000.

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

                                       1
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

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

<TABLE>
<CAPTION>
 
                                          THREE MONTHS ENDED
                                          -------------------
<S>                                       <C>        <C>

                                          JUNE 30,   JUNE 30,
                                            1997       1996
                                          --------   --------
REVENUES                                 
  Net trade sales  .....................  $152,558   $152,675
  Net sales to related parties .........    37,218     26,552
                                          --------   --------

            Total revenues..............   189,776    179,227
                                          --------   --------
                           
                      
EXPENSES              
  Cost of goods sold  
        Trade............................  125,926    140,023
        Related parties..................   29,704     25,202
  Marketing, general & administrative    
   expense ..............................    6,338      6,370
  Interest expense.......................    5,243      5,556
  General Partner incentive..............      794          0
  Other expense, including minority
      interest...........................      525        571
                                          --------   --------

            Total expenses...............  168,530    177,722
                                          --------   --------
 
  Net income.............................   21,246      1,505
      Less 1% General Partner interest...     (212)       (15)
                                          --------   --------
  Net income applicable to Limited                              
   Partners' interest.................... $ 21,034   $  1,490
                                          ========   ========
 
 
PER UNIT DATA, NET OF 1% GENERAL 
 PARTNER INTEREST:                        

  Net income per Unit....................    $0.57      $0.04
                                          ========   ========
 
  Average number of Units outstanding                         
   during the period.....................   36,750     36,750 
                                          ========   ======== 

  Cash distribution declared per Unit...     $0.45      $0.00
                                          ========   ======== 
</TABLE>

                                       2
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER UNIT DATA)
<TABLE>
<CAPTION>
 
                                            SIX MONTHS ENDED
                                          ---------------------
<S>                                       <C>         <C>
                                          JUNE 30,    JUNE 30,
                                            1997        1996
                                           --------   --------
 
REVENUES
  Net trade sales.......................   $315,475   $297,648
  Net sales to related parties..........     68,983     52,164
                                           --------   --------
 
            Total revenue...............    384,458    349,812
                                           --------   --------
 
 
EXPENSES
  Cost of goods sold
        Trade...........................    283,868    279,603
        Related parties.................     59,799     50,441
  Marketing, general & administrative     
   expense..............................     11,779     12,005
  Interest expense......................     10,493     10,906
  General Partner incentive.............        794          0
  Other expense, including minority                            
      interest..........................        886      1,449 
                                           --------   -------- 

              Total expenses                367,619    354,404
                                           --------   --------
 
 Net income (loss)......................     16,839     (4,592)
      Less 1% General Partner interest..       (168)        46
                                           --------   --------
  Net income (loss) applicable to
   Limited Partners' interest...........   $ 16,671   $ (4,546)
                                           ========   ========


PER UNIT DATA, NET OF 1% GENERAL                                
 PARTNER INTEREST:                                  
  Net (loss) income per Unit............      $0.45     $(0.12)
 
  Average number of Units outstanding                          
   during the period......................   36,750     36,750 
                                           ========   ========  

  Cash distribution declared per Unit...      $0.55      $0.10
                                           ========   ========  
</TABLE>
 

                                       3
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                      SIX MONTHS
                                          ---------------------------------
                                          JUNE 30,                 JUNE 30,
                                            1997                     1996
                                          ---------               ----------

CASH FLOWS FROM OPERATIONS
<S>                                       <C>                 <C>
Net income (loss).......................  $ 16,839              $  (4,592)
                                                          
Adjustments to reconcile net income                       
 (loss) to net cash provided by                           
 operating activities:                                                     
 Depreciation............................   24,949                 24,415  
 (Increase) in receivables..............   (10,494)               (10,404) 
 (Increase) decrease in inventories.....    (7,762)                 7,343  
 Increase in payables...................       181                  4,397  
 Increase (decrease) in incentive                                           
  distribution payable..................       794                 (1,910)  
 (Decrease) in accrued interest.........    (   18)                (   55)  
 Other, net.............................    (3,030)                (8,561)  
                                          --------              ---------
                                            21,459                 10,633   
                                          --------              ---------


CASH FLOWS FROM INVESTING ACTIVITIES                      
Capital expenditures....................    (4,178)                (6,852)
                                          --------              ---------
 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings,                                       
 (net)..................................         0                (10,000) 
Cash distributions paid.................    (7,424)               (24,891) 
                                          --------              ---------  
                                            (7,424)               (14,891) 
                                          --------              ---------
Increase (decrease) in cash and                     
 equivalents............................     9,857                (11,110)

Cash and equivalents at                                                   
beginning of period                         10,867                 32,421       
                                          --------              ---------   
                                          $ 20,724              $  21,311   
Cash and equivalents at end of period     ========              =========    
                                        

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION

Interest paid during the period.........  $ 10,511              $ 10,961 
                                          ========              ======== 
</TABLE>

                                       4
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                     CONSOLIDATED CONDENSED BALANCE SHEETS
                                  (UNAUDITED)
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
                ASSETS                                   JUNE 30, 1997       DECEMBER 31, 1996
                ------                                   -------------       -----------------      
<S>                                                     <C>                   <C>
Cash and equivalents...............................      $    20,724           $  10,867
Accounts receivable (less allowance for
 doubtful accounts of $622 and $589
 respectively)
   Trade  .........................................           80,570              72,908
   Related Parties.................................           24,979              22,147
Inventories
   Finished and in process goods...................           42,208              36,174
   Raw materials and supplies......................            9,516               7,788
Other current assets...............................            2,560               2,579
                                                         -----------           ---------
      Total current assets.........................          180,557             152,463
                                                         -----------           ---------

Investments in and advances to
 affiliated companies..............................            4,353               4,366
Other assets.......................................           52,891              49,405
                                                         -----------           ---------
                                                              57,244              53,771
                                                         -----------           ---------
Plant, property and equipment                            
  Land.............................................           15,028              14,970
  Buildings........................................           44,611              44,597
  Machinery and equipment..........................          648,395             644,619
                                                         -----------           ---------
                                                             708,034             704,186
Less accumulated depreciation......................         (409,396)           (384,715)
                                                         -----------           ---------
   Net plant, property and equipment...............          298,638             319,471
                                                         -----------           ---------

                 Total assets......................      $   536,439           $ 525,705
                                                         ===========           =========

Accounts and drafts payable........................      $    61,993           $  61,812
Cash distributions payable.........................           16,713               3,712
Short-term borrowing...............................           25,000              25,000
Incentive to General Partner.......................              794                   0
Accrued interest  .................................            3,167               3,185
Other accrued liabilities..........................           16,972              16,516
                                                         -----------           ---------

      Total current liabilities....................          124,639             110,225

Long-term debt.....................................          200,000             200,000
Other liabilities..................................            5,551               5,609
Minority interest in consolidated
 subsidiary........................................            1,535               1,571
                                                         -----------          ----------

                 Total liabilities.................          331,725             317,405
                                                         -----------          ----------
Partners' capital
  Limited Partners ................................          204,138             207,680
  General Partner..................................              576                 620
                                                         -----------          ----------
  Total partners' capital..........................          204,714             208,300
                                                         -----------          ----------

       Total liabilities and partners' capital.....      $   536,439           $ 525,705
                                                         ===========          ==========
</TABLE>

                                       5
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

       CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                                  (UNAUDITED)
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
                                 LIMITED    GENERAL
                                 PARTNERS   PARTNER     TOTAL
                                ---------   -------   --------
<S>                             <C>         <C>       <C>
Balance at December 31, 1995     $215,762    $  702    $216,464
Net loss......................     (4,546)      (46)     (4,592)
Cash distributions declared...     (3,675)      (37)    ( 3,712)
                                 --------    ------    --------
Balances at June 30, 1996.....   $207,541    $  619    $208,160
                                 ========    ======    ========
 
Balance at December 31, 1996     $207,680    $  620    $208,300
Net income....................     16,671       168      16,839
Cash distributions declared...    (20,213)   (  212)    (20,425)
                                 --------    ------    --------
Balances at June 30, 1997.....   $204,138    $  576    $204,714
                                 ========    ======    ========
</TABLE>

                                       6
<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 

                                       7
<PAGE>
 
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 June 30, 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 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.

                                       8
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------------------------------------------------------------------------------
OF OPERATIONS
-------------

RESULTS OF OPERATIONS
QUARTER ENDED JUNE 30, 1997 COMPARED TO QUARTER ENDED JUNE 30, 1996

Revenues

Total revenues during the second quarter of 1997 increased $10.6  million or 6%
to $189.8 million from $179.2  million in the second quarter of 1996.  This
increase was the result of a $5.7 million increase in PVC Polymers Products
revenues and a $9.4 million increase in Methanol and Derivatives revenues,
partially offset by a $4.5 million decrease in Nitrogen Products revenues.

Total revenues for PVC Polymers Products increased $5.7 million as a result of 
an 11% increase in selling prices, partially offset by a 6% decrease in sales
volumes. Pricing for PVC improved as the PVC industry realized increases caused
by raw material cost increases over the past several quarters.

Total revenues for Methanol and Derivatives increased $9.4 million as a result
of a 33% increase in selling prices, partially offset by a 4% decrease in sales
volumes. The improved methanol selling prices reflect the effect of supply
disruptions due to operating disruptions at other producers.

Total revenues for Nitrogen Products decreased $4.5 million as a result of a 15%
decrease in sales volumes, and a 3% decrease in selling prices. Pricing for
ammonia was comparable to 1996, but urea prices dropped, reflecting depressed
pricing to the fertilizer industry.

Cost of Goods Sold

Total cost of goods sold decreased 6%  to $155.6 million in the current period
from $165.2 million in the year-ago period.  The decrease was primarily due to
the reduced volumes discussed above, combined with slightly lower raw material
costs. Natural gas and ethylene costs moderated, but were partially offset by
chlorine and VCM cost increases. Expressed as a percentage of total revenues,
cost of goods sold decreased to 82% of total revenues in 1997 from 92% in 1996,
resulting in improved gross margins and net income for the Partnership.

Gross margins for PVC Polymers Products increased 112% as a result of the
increased selling prices discussed above.

Gross margins for Methanol and Derivatives increased 382% as a result of the
increased selling prices combined with the decreased natural gas costs discussed
above.

Gross margins for Nitrogen Products decreased 11% as a result of the decreased
selling prices, partially offset by the decrease in natural gas costs.

Incentive Distribution to General Partner

An incentive distribution to the General Partner of $0.8 million was generated
in the second quarter of 1997 a result of cash distributions to Unitholders of
$0.45 per unit, exceeding $0.3647 (the "Target Distribution").

There was no incentive distribution to the General Partner generated in the
second quarter of 1996 as there was no cash distribution declared to the
unitholders.

Net Income

Net income was $21.2 million compared to $1.5 million in 1996.  As discussed
above, the primary reasons for the improved operating performance were
significant higher selling prices in PVC and methanol combined with a slight
decline in raw material costs.

                                       9
<PAGE>
 
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

Revenues

Total revenues for the first six months of 1997 increased $34.7 million or 10%
to $384.5 million from $349.8 million for the comparable period a year ago.
Total revenues for PVC Polymers Products increased $25.3 million as a result of
an 11% increase in selling prices on comparable volumes. Total revenues for
Methanol and Derivatives increased $19.1 million as a result of a 33% decrease
in selling prices on comparable volumes. Total revenues for Nitrogen Products
decreased $9.7 million as a result of a 4% decrease in selling prices combined
with a 15% decrease in sales volumes.

Cost of Goods Sold

Total cost of goods sold increased 4% to $343.7 million for the first six months
of 1997 from $330.0 million in the year-ago period. The increase was primarily
the result of increased raw material cost due to chlorine and VCM price
increases, partially offset by decreased natural gas and ethylene cost.
Expressed as a percentage of total revenues, cost of goods sold decreased to 89%
of total revenues for the first half of 1997 from 94% in the first half of 1996,
resulting in improved gross margins and net income for the Partnership.

Gross margins for PVC Products increased 117% as a result of the improved
selling prices discussed above.

Gross margins for Methanol and Derivatives improved almost ten-fold as a result
of the increased selling prices combined with the lower natural gas costs
discussed above.

Gross margins for Nitrogen Products decreased 63% as a result of decreased
selling prices and volumes.

Incentive Distribution to General Partner

An incentive distribution to the General Partner of $0.8 million was generated
during the second quarter of 1997 as a result of cash distributions to
Unitholders exceeding the Target Distribution.

There was no incentive distribution to the General Partner generated during
either the first or second quarter of 1996.

Interest Expense

The decrease in interest expense during the first half of 1997 compared to the
year-ago period was due to the reduction of short-term bank borrowings.

Net Income (Loss)

Net income for the first half was $16.8 million compared to a loss of $4.6
million in 1996. As discussed above, the primary reason for the improved  in
operating performance was significantly  higher selling prices for PVC resins
and methanol, combined with lower net raw material costs.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows from Operations.  Cash flows from operations increased $10.8 million
for the first two quarters of 1997 from the comparable period a year ago. The
increase was primarily attributable to the increase in net income during this
period compared to 1996, partially offset by increased receivable and inventory
levels.

                                       10
<PAGE>
 
Cash Flows from Investing Activities. Capital expenditures for the first two
quarters of 1997 totaled $4.2 million compared to $6.9 million during the year
ago period.

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 $7.4 million were made during the first half of 1997
compared to $24.9 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,
reduced 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 June 30, 1997.

                                       11
<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.

                                       12
<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


August 13, 1997

                                       13