GREAT LAKES CHEMICAL CORP, 10-K, 1994-03-30

GREAT LAKES CHEMICAL CORP
10-K, 1994-03-30
CHEMICALS & ALLIED PRODUCTS

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<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
________________________
FORM 10-K

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

For the fiscal year ended December 31, 1993
Commission file number 1-6450

GREAT LAKES CHEMICAL CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 95-1765035
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

ONE GREAT LAKES BOULEVARD
P. O. BOX 2200
WEST LAFAYETTE, INDIANA 47906
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code 317-497-6100
__________________________________________

Securities registered pursuant to Section 12 (b) of the Act:

Name of each exchange on
Title of each class which registered
________________________ _______________________
Common stock, $1.00 par value New York Stock Exchange
Pacific Stock Exchange
______________________________

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

______________________________

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, and (2) has been subject to the filing
requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
________________________________

As of March 7, 1994, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $5,420,940,160.

As of March 7, 1994, 71,328,160 shares of the registrants' stock were
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 1993 Annual Report to Stockholders are incorporated by
reference into Parts I, II and IV.

Portions of the annual proxy statement dated March 29, 1994 are
incorporated by reference into Part III.
<PAGE> 2

PART I
------

Item 1. BUSINESS

GENERAL

Great Lakes Chemical Corporation is a Delaware corporation incorporated in
1933, having its principal executive offices in West Lafayette, Indiana. The
Company's operations consist of one dominant industry segment - chemicals and
allied products. Within this segment the Company is well diversified focusing
on performance chemicals, water treatment chemicals, petroleum additives and
specialized services and manufacturing. The Corporate profile on page 3 and
the Review of Operations on pages 14 through 19 of the 1993 Annual Report to
Stockholders is incorporated herein by reference.

The term "Great Lakes" as used herein means Great Lakes Chemical Corporation
and Subsidiaries unless the context indicates otherwise.

Net sales by product group are set forth in the following table (dollars in
millions):

<TABLE>
<CAPTION>
Year ended December 31 1993 1992 1991
------ ------ -------

<S> <C> <C> <C>
Performance Chemicals $ 603 $ 534 $ 488
Water Treatment Chemicals 364 259 252
Petroleum Additives 551 542 477
Specialized Services and Manufacturing 274 161 91
------ ------ -------
$1,792 $1,496 $ 1,308
------ ------ -------
------ ------ -------
</TABLE>

1
<PAGE> 3
<TABLE>
<CAPTION>

PRODUCTS AND SERVICES

The following is a list of principal and certain other products and services
provided by Great Lakes:

PERFORMANCE CHEMICALS

Plants & Major Raw
Products & Services Principal Markets Facilities Materials
- ------------------- ----------------- ---------- ----------
<S> <C> <C> <C>
POLYMER ADDITIVES
Brominated and intumescent Computer and Business ElDorado, AR Bromine,
flame retardants; Antioxidants, Equipment, Consumer Newport, TN Bisphenol A,
UV absorbers or Light Electronics, Textiles, Persan, France Diphenyl
Stabilizers, Plasticizers Building and Construction, Catenoy, France Oxide
Transportation Waldkraiburg,
Germany

FUNCTIONAL INTERMEDIATES
AND FINE CHEMICALS
Bromine-based specialty Foundry Industry, Lube Oil ElDorado, AR Bromine,
chemicals, including Furfural Refining, Pharmaceutical Memphis, TN Agricultural
and furfural-based specialty Industry, Agrochemical Omaha, NE By-Products
chemicals, including furfuryl Industry, Electronics Belle Glade, FL
alcohol and POLYMEG(R) Polyols Geel, Belgium
Organofluorine compounds Widnes, U.K.

INDUSTRIAL SPECIALTY CHEMICALS
Bromine, sodium, chlorine, Telecommunications, Military, Marysville, AR Chlorine,
furfural and their derivatives, Soil, Crop and Structural ElDorado, AR Salt, Electricity
Methyl bromide, Fire extin- Pest Control, Producers of Ellesmere Port, U.K. Sulfur
guishing agent FM-200(TM), Photographic Papers and Amlwch, U.K.
Halon recycling services Film and Rubber
Compounds

<CAPTION>
WATER TREATMENT CHEMICALS

<S> <C> <C> <C>
RECREATIONAL
Water sanitizers - Pool and Spa Dealers, Conyers, GA Bromine,
BioGuard(R), OMNI(R), Distributors, Mass Market Munich, Germany Chlorinated
Hydrotech(R), Guardex(R), Retailers, Builders 33 U.S. Distribution Isocynurates
Pool Time(R) Distributors, Mass Market locations
Algicides, oxidizers, pH
balancers, mineral balancers
and specialty chemicals
Key operating equipment

INDUSTRIAL
BromiCide(R) and LiquiBrom(TM) Industrial Cooling Water Adrian, MI Bromine
SpecialtyBiocides Treatment, Industrial and ElDorado, AR
Biocide dispensing Municipal Wastewater Treat-
equipment ment, Pulp and Paper and
Food Processing
</TABLE>

2
<PAGE> 4
<TABLE>
<CAPTION>

PETROLEUM ADDITIVES

Plants & Major Raw
Products & Services Principal Markets Facilities Materials
- ------------------- ----------------- ---------- ----------
<S> <C> <C> <C>
Antiknock boosters for Major Oil Refineries and Fuel Ellesmere Port, U.K. Sodium,
leaded gasoline, Cetane Blenders Worldwide Paimbouef, France Ethylene,
number improvers, Multi- Bussi, Italy Lead,
functional gasoline and diesel Methyl Chloride
fuel additives, Gasoline and
diesel detergents, Petroleum
oxidants, stabilizers and
corrosion inhibitors

<CAPTION>
SPECIALIZED SERVICES AND MANUFACTURING
<S> <C> <C> <C>
CUSTOM MANUFACTURING
Contract research, Process Pharmaceuticals, Agro- Konstanz, Germany
development, Custom manu- chemicals, Industrial Newport, TN
facturing of fine Specialties Widnes, U.K.
and specialty chemicals

ENVIRO-ENERGY PERFORMANCE
GROUP
Completion fluids, Sand Worldwide Oil and Gas Lafayette, LA Bromine,
control and filtration, Industry Zinc, Sodium,
Reservoir analysis, Calcium
Down-hole tools

Waste Management, Petrochemical Companies, Greensboro, NC
Contamination assessment Waste Management Firms,
and remediation, Oil Refineries, Forest
Geotechnical engineering, Product Companies,
Resource recovery and Government Agencies
material handling

TOXICOLOGICAL SERVICES
All phases of nonclinical Pharmaceutical, Chemical, Ashland, OH
toxicological testing and Veterinary, Medical, Agri-
bioanalytical services, cultural, Food, Consumer
Design of specialized Products Industries
toxicological, metabolic and
analytical chemistry programs

ENGINEERED SURFACE TREATMENTS
Dry film lubrication corrosion Aerospace, Automotive, North Hollywood, Molysulfide,
and abrasion-resistant, chip- Railroad, Machine Tool, CA Various solvents
and scuff-proof coatings, All Manufacturing Fort Worth, TX and resins
Electrically conductive Industries
coatings

INTERNATIONAL TRADING
Organic and inorganic Central and Eastern Budapest, Hungary
chemicals, Plastic resins, European Chemical
Finished agrochemicals and Industry
fertilizers
</TABLE>

<PAGE> 5
1993 Developments

In June 1993, the Company augmented its polymer additives business with the
acquisition of Chemische Werke LOWI GmbH & Co. (Lowi), a leading manufacturer
of antioxidants, and hindered amine light stabilizers (HALS). This acquisition
also expanded the polymer additives business into the rubber and adhesives
markets.

In the Functional Intermediates and Fine Chemicals Group, the Company increased
bromine capacity and other derivative production to meet incremental market
demands for bromine-based specialty derivatives. Also, the Company expanded
production facilities in El Dorado, AR, to meet increased demand for
tetrabromobisphenol-A.

Octel Chemicals Limited (OCL) doubled its sales, performing a wide range of
custom synthesis activities, enhancing Great Lakes' presence in the European
specialty and fine chemicals industry.

A new industrial specialty chemicals plant was commissioned to produce high
purity bromide salts used in photographic materials, catalysts, pharmaceutical
intermediates and other fine chemicals. Also, FM-200(TM), a clean gaseous fire
extinguishing agent that replaces halon-based products, received U.S. EPA
approval and the Underwriters Laboratories (UL) listing mark, and passed
testing for U.S. Military and Factory Mutual insured facilities applications.

The Water Treatment Chemicals Group completed two acquisitions during 1993 that
strengthened its presence in the recreational market. In January 1993, Bayrol
Chemische Fabrik GmbH was acquired which extended the Company's presence in the
European market. In May 1993, Aqua Chem was acquired which provides an
important foothold in mass merchandising, the fastest growing sector of the
pool and spa products market.

In the Petroleum Additives Group, Octel supplied additional quantities of
antiknock compound for the Mexican market through the extension of an earlier
marketing and distribution agreement with DuPont. Also, a long-term agreement
to supply Ethyl Corporation's requirements for alkyl lead antiknock compound
will take effect in the middle of 1994.

The Specialized Services and Manufacturing Group expanded its environmental
services business with the January 1993 acquisition of Four Seasons Industrial
Services, Inc. and two associated companies.

Raw Materials

The sources of essential raw materials for bromine are the brine from
company-owned wells in Arkansas, sea water extraction plants in Europe and
bromine purchased from an affiliated company. The Arkansas properties are
located atop the Smackover lime deposits, which constitute a vast underground
sea of bromine-rich brine. The area between ElDorado and Magnolia, Arkansas,
(located about 35 miles west of ElDorado) provides the best geological location
for bromine production and both major domestic bromine manufacturers are
located there. Based on projected production rates, the Company's brine
reserves are conservatively estimated to be adequate for the foreseeable
future.

Furfural is extracted from agricultural by-products and waste
materials such as corncobs, sugar cane bagasse, rice hulls and oat hulls for
which there are few alternative uses. These raw material sources for furfural
production are expected to remain abundant and relatively inexpensive. Other
materials used in the chemical processes are obtained from outside suppliers
through purchase contracts. Supplies of these materials are believed to be
adequate for the Company's future operations.

4
<PAGE> 6
International Operations

Great Lakes has a substantial presence in foreign markets. The Company's
investment in foreign countries is principally in Western Europe and represents
$793 million or 42 percent of total assets.

Sales to customers in foreign countries (primarily Europe and the Far East)
amount to 62, 61 and 58 percent of total sales for the years ended December 31,
1993, 1992, and 1991, respectively. Approximately 15, 19, and 21 percent of
these foreign sales, respectively for the three years shown, are products
exported from the U.S., with the balance primarily being products manufactured
and sold by the Company's European subsidiaries and branches. The
profitability on foreign sales (including U.S. exports and foreign manufactured
products, except Octel) approximates those for domestic operations. Because of
value-added pricing, Octel's alkyl lead products have a higher profitability
than do most of the Company's other products.

The geographic segment data contained in the note "Industry Segments and
Foreign Operations" of Notes to Consolidated Financial Statements on page 36 of
the 1993 Annual Report to Stockholders is incorporated herein by reference.

Customers and Distribution

During the last three years, no single customer accounted for more than 10
percent of Great Lakes' total consolidated sales. The Company has no material
contract or subcontract with the government. A major portion of the Company's
sales are sold to industrial or commercial users for use in the production of
other products. Some products such as recreational water treatment chemicals
and supplies are sold to a large number of users or distributors. Some export
sales are marketed through distributors and brokers.

The Company's business does not normally reflect any material backlog of orders
at year-end.

Competition

Great Lakes is in competition with businesses producing the same or similar
products as well as businesses producing products intended for similar use.
There is one other major bromine and alkyl lead producer in the United States
who competes with the Company in varying degrees, depending on the product
involved. There is also one major overseas bromine competitor. In addition,
there are several small producers in the U.S. and overseas who are competitors
in several individual products. The Company is the only U.S. producer of
furfural and furfuryl alcohol, and it enjoys a strong market share in every
major geographic and product market in which it competes. The Company competes
with several manufacturers and distributors of swimming pool and spa chemicals
and equipment. Through its Bio-Lab subsidiary, the Company operates 33 branch
distribution outlets for chemicals and pool and spa equipment in the U.S.
Products are differentiated by brand names to the retail, wholesale and mass
merchandising markets.

Principal methods of competition are price, product quality and purity,
technical services and ability to deliver promptly. The Company is able to
move quickly in providing new products to meet identified market demands, and
believes its production costs are among the lowest in the world. These
factors, combined with high technical skills, allow the Company to compete
effectively. One negative factor in its ability to compete with the major
overseas producer of bromine is the fact that this producer receives
significant subsidies from its government, and enjoys favorable duty advantages
on its exports to certain markets.

Seasonality and Working Capital

The products, which the Company sells to the agricultural and swimming pool
markets, do exhibit some seasonality; however, the effect on overall Company
sales and profits is not material. Seasonality results

5
<PAGE> 7

in the need to build inventories for rapid delivery at certain times
of the year. The pool product season is strongest during the first six
months, requiring a build-up of inventory at the beginning of the year. Except
for certain arrangements with distributors and dealers of swimming pool and spa
products, customers are not permitted to return unsold material at the end of a
season. Extended credit terms are granted only in cases where the Company
chooses to do so to meet competition.

The alkyl lead products have somewhat larger working capital requirements than
do the Company's other major products, because of extended distribution lines
and credit terms for large volume refinery customers.

The effect of the above items on working capital requirements is not material.

Research and Development and Patents

Research and development expenditures are included in the note "Research and
Development Expense" of the Notes to Consolidated Financial Statements on page
36 of the 1993 Annual Report to Stockholders and is incorporated herein by
reference. The Company holds no patents, licenses, franchises or concessions
which are essential to its operations.

Environmental and Toxic Substances Control

Due to the hazardous nature of certain of its products, the Company is keenly
aware of the potential damage that could be done to the environment if
effective pollution controls were not maintained. Therefore, the Company has
made a commitment as one of its business objectives to install, maintain and
improve pollution control facilities wherever they are needed.

The Company meets or exceeds all presently known governmental requirements for
protection of the environment. In addition, all new facilities include
provisions for any necessary pollution controls as a normal part of their
projected costs.

Employees

The Company has approximately 7,000 employees.

Item 2. PROPERTIES

Great Lakes has plants at 32 locations in 14 states and 14 plants in 8 foreign
countries. Most principal plants are owned. Listed under Item 1 above in a
table captioned Products and Services are the principal locations at which
products are manufactured, distributed or marketed.

The Company leases warehouses, distribution centers and space for offices
throughout the world. All of the Company's facilities are in good repair,
suitable for the Company's businesses, and have sufficient space to meet
present marketing demands at an efficient operating level.

Item 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings involving the Company, its
subsidiaries or any of its properties. Furthermore, no director, officer or
affiliate of the Company, or any associate of any director or officer is
involved, or has a material interest in, any proceeding which would have a
material adverse effect on the Company.

Item 103 of Regulation S-K requires disclosure of administrative or judicial
proceedings arising under any federal, state or local provisions dealing with
protection of the environment, if the monetary sanctions might

6
<PAGE> 8
exceed $100,000. The following proceedings may result in sanctions exceeding
$100,000.

In 1993, the Company and the United States Environmental Protection Agency
agreed in principle to settle an action brought by the EPA under Section
15(1)(c) of TOSCA for a payment of $125,000 and the performance of $2,000,000
of environmentally beneficial capital projects at the Company's ElDorado,
Arkansas, site. The proposed consent decree states that the Company does not
admit the allegations made by the EPA.

The United States Environmental Protection Agency and the Company have agreed
in principle to a payment by the Company of a civil penalty in the amount of
$190,000 in full satisfaction of claims by the EPA that the Company violated
the Clean Water Act based on allegations of discharges from its ElDorado,
Arkansas, facility. No complaint has been filed and no formal action has been
commenced. The proposed consent decree states that the Company does not admit
the allegations made by the EPA.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the quarter ended
December 31, 1993.

PART II
-------

Item 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

As of March 7, 1994, there were approximately 4,850 registered holders of Great
Lakes Common Stock. Additional information is contained in the 1993 Annual
Report to Stockholders, under the captions "Stock Price Data" and "Cash
Dividends Paid" on pages 1 and 26, respectively, all of which are incorporated
herein by reference.

Item 6. SELECTED FINANCIAL DATA

This information is contained in the 1993 Annual Report to Stockholders, under
the caption "Financial Review" on pages 20 and 21, and is incorporated herein
by reference.

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

"Management's Discussion and Analysis of Results of Operations and Financial
Condition" on pages 14 through 19 and pages 22 through 26 of the 1993 Annual
Report to Stockholders, is incorporated herein by reference.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements together with the report thereon of Ernst
& Young dated January 31, 1994, appearing on pages 27 through 38 and the
"Quarterly Results of Operations" on page 39 of the 1993 Annual Report to
Stockholders, are incorporated herein by reference.

Item 9. DISAGREEMENT OF ACCOUNTING AND FINANCIAL DISCLOSURE

No change of auditors or disagreements on accounting methods have occurred
which would require disclosure hereunder.

7
<PAGE> 9
PART III
--------

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Executive Officers
<TABLE>
<CAPTION>

Served as
Name and Age Office Officer Since
- ------------ ------ -------------
<S> <C> <C>
Emerson Kampen, 65 Chairman, President and Chief Executive Officer 1962
Robert T. Jeffares, 58 Senior Vice President and Chief Financial Officer 1983
Robert B. McDonald, 57 Senior Vice President 1981
David R. Bouchard, 50 Vice President, International 1990
David A. Hall, 49 Vice President, Development 1987
Robert L. Hollier, 51 Vice President 1991
Lowell C. Horwedel, 61 Vice President 1984
L. Donald Simpson, 58 Vice President 1992
John B. Talpas, 50 Vice President 1988
Rudolph J. H. Voorhoeve, 55 Vice President, Technology 1990
Charles T. Ludwig, 46 Associate Vice President, Flame Retardants
and Specialties 1991
David C. Sanders, 50 Associate Vice President, Research and Development 1990
Richard R. Ferguson, 42 Treasurer and Corporate Secretary 1991
Robert J. Smith, 47 Corporate Controller 1993
</TABLE>

Information with respect to directors of the Company is contained under the
heading "Proposal One: Election of Directors" in the Great Lakes' Proxy
Statement relating to the 1994 Annual Meeting of Shareholders dated March 29,
1994, which is incorporated herein by reference.

Item 11. EXECUTIVE COMPENSATION

The information under the heading "Executive Compensation and Other
Information" in the 1994 Proxy Statement is incorporated by reference in this
report.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information under the heading "Security Ownership of Certain Beneficial
Owners and Management" in the 1994 Proxy Statement is included by reference in
this report.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information under the heading "Compensation Committee Interlocks and
Insider Participation" in the 1994 Proxy Statement is included by reference in
this report.

PART IV
-------

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

(a) 1. Financial Statements

The following Consolidated financial statements of Great Lakes Chemical
Corporation and Subsidiaries and related notes thereto, together with the
report thereon of Ernst & Young dated January 31, 1994, appearing on pages 27
through 38 of the 1993 Annual Report to Stockholders, are incorporated by

8
<PAGE> 10
reference in Item 8:

Consolidated Balance Sheets -- December 31, 1993 and 1992
Consolidated Statements of Income and Retained Earnings --
Years ended December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows --
Years ended December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements

2. Financial Statement Schedules

The following additional information is filed as part of this report and should
be read in conjunction with the 1993 financial statements.

Schedule VIII -- Valuation and Qualifying accounts

All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.

3. Exhibits

11. Computation of Per Share Earnings
13. 1993 Annual Report to Stockholders
21. Subsidiaries -- Incorporated herein by reference is the list of
subsidiaries appearing on page 40 of the 1993 Annual Report to
Stockholders.
23. Consents of Independent Auditors

(b) Reports on Form 8-K

There were no Form 8-K's filed during the quarter ended December 31, 1993.

The response to this section of Item 14 is submitted as a separate section of
this report.

(d) Financial Statement Schedules

The response to this section of Item 14 is submitted as a separate section of
this report.

9
<PAGE> 11
<TABLE>
<CAPTION>
SCHEDULE VIII

GREAT LAKES CHEMICAL CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED DECEMBER 31, 1993

Additions
Balance at ---------------------------------
Beginning Charges to Costs Charged to Balance at End
Description of Period and Expenses Other Accounts Deductions of Period
- ----------- ----------- --------------- -------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
1993:

Reserve deducted from asset:
Allowance for doubtful accounts
receivable $ 4,317,000 $ 2,833,000 $ 2,005,000(A) $ 2,067,000(B) $ 7,088,000
----------- --------------- ---------------- --------------- -------------

Accumulated amortization of
excess of investment over
net assets of subsidiaries
acquired $ 25,272,000 $ 17,970,000 $ -0- $ -0- $ 43,242,000
----------- --------------- -------------- -------------- ---------------

1992:

Reserve deducted from asset:
Allowance for doubtful
accounts receivable $ 4,710,000 $ 9,428,000 $ -0- $ 9,821,000(B) $ 4,317,000
----------- --------------- -------------- -------------- --------------

Accumulated amortization of
excess of investment over
net assets of subsidiaries
acquired $ 17,624,000 $ 7,648,000 $ -0- $ -0- $ 25,272,000
----------- --------------- -------------- ------------- ---------------

1991:

Reserve deducted from asset:
Allowance for doubtful
accounts receivable $ 5,491,000 $ 2,393,000 $ -0- $ 3,174,000(B) $ 4,710,000
----------- --------------- -------------- ------------- --------------

Accumulated amortization of
excess of investment over
net assets of subsidiaries
acquired $ 11,225,000 $ 6,399,000 $ -0- $ -0- $ 17,624,000
----------- --------------- -------------- ------------- --------------

</TABLE>

(A) Reserve balance of Bayrol and Lowi at date of acquisition.
(B) Uncollectible accounts receivable written off, net of recoveries and
foreign currency translation.

10
<PAGE> 12
SIGNATURES
- ----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

<TABLE>
<S> <C>
GREAT LAKES CHEMICAL CORPORATION
- --------------------------------
(Registrant)

Date March 1, 1994 /s/ Emerson Kampen
- -------------------------------- -----------------------------------
Emerson Kampen, Chairman, President
and Chief Executive Officer
</TABLE>

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

<TABLE>
<S> <C>
Date March 1, 1994 /s/ Robert T. Jeffares
- ------------------ -----------------------------------
Robert T. Jeffares
Senior Vice President and
Chief Financial Officer

Date March 1, 1994 /s/ Robert J. Smith
- ------------------ -----------------------------------
Robert J. Smith, Controller
(Principal Accounting Officer)

Date March 1, 1994 /s/ William H. Congleton
- ------------------ -----------------------------------
William H. Congleton, Director

Date March 1, 1994 /s/ John S. Day
- ------------------ -----------------------------------
John S. Day, Director

Date March 1, 1994 /s/ Herschel H. Friday
- ------------------ -----------------------------------
Herschel H. Friday, Director

Date March 1, 1994 /s/ Martin M. Hale
- ------------------ -----------------------------------
Martin M. Hale, Director

Date March 1, 1994 /s/ Leo H. Johnstone
- ------------------ -----------------------------------
Leo H. Johnstone, Director

Date March 1, 1994 /s/ Emerson Kampen
- ------------------ -----------------------------------
Emerson Kampen, Director
</TABLE>

11
<PAGE> 13
INDEPENDENT AUDITORS' REPORT

To the Stockholders of Arkansas Chemicals, Inc.:

We have audited the balance sheets of Arkansas Chemicals, Inc. as of December
31, 1993 and 1992, and the related statements of income and retained earnings
and of cash flows for each of the three years in the period ended December 31,
1993 (not presented separately herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 1993 and 1992,
and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1993 in conformity with generally
accepted accounting principles.

Deloitte & Touche

Pittsburgh, Pennsylvania
January 31, 1994

12
<PAGE> 14
INDEPENDENT AUDITORS' REPORT

To the Board of Directors
and Shareholders of
Huntsman Chemical Corporation:

We have audited the consolidated balance sheets of Huntsman Chemical
Corporation and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, stockholders' equity, and cash flows for the
years then ended (not presented separately herein). These financial statements
are the responsibilities of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Huntsman Chemical Corporation and
subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.

Deloitte & Touche

Salt Lake City, Utah
January 26, 1994
(March 18, 1994 as to note 5)

<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 11
GREAT LAKES CHEMICAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS

Year Ended December 31
----------------------------------------------------------------------
1993 1992 1991
------------------ ---------------- ------------------
Primary
- -------
<S> <C> <C> <C>
Net income $272,784,000 $232,735,000 $157,473,000
Average number of
shares outstanding 71,329,145 71,164,010 70,700,332
Net income per share $ 3.82 $ 3.27 $ 2.23

Fully diluted - Assuming the exercise of all outstanding stock options using the treasury stock method.
- -------------
<S> <C> <C> <C>
Average number of
shares outstanding 71,329,145 71,164,010 70,700,332
Dilutive shares 1,060,166 1,217,205 1,495,110
---------- ---------- ----------
72,389,311 72,381,215 72,195,442
Net income per share $ 3.77 $ 3.22 $ 2.18
</TABLE>

<PAGE> 1
1993 Financial Highlights Exhibit 13

Great Lakes Chemical Corporation and Subsidiaries

<TABLE>
<CAPTION>
(in thousands of dollars, except per share data) Percentage Growth
Current Five Ten
1993 1992 Year Years Years

<S> <C> <C> <C> <C> <C>
Revenues....................... $1,827,796 $1,538,169 +18.8 +24.3 +23.1

Income Before Taxes and
Minority Interest...... $ 415,023 $ 361,022 +15.0 +23.7 +26.6
Percent of revenues.... 22.7 23.5

Net Income..................... $ 272,784 $ 232,735 +17.2 +21.4 +27.6
Per share.............. $ 3.82 $ 3.27 +16.8 +20.9 +25.0
Percent of revenues........ 14.9 15.1
Percent of stockholders'
average equity........ 23.6 23.8

Cash Dividends Declared per Share.. $ .35 $ .31 +12.9 +14.2 +15.9

Capital Expenditures............... $ 79,270 $ 69,368

Stockholders' Equity............... $1,256,563 $1,052,851 +19.3 +21.1 +24.4
Per share................. $ 17.50 $ 14.71
</TABLE>
<PAGE> 2

REVIEW OF OPERATIONS

PERFORMANCE CHEMICALS GROUP

AS A RESULT OF STRONG WORLDWIDE DEMAND FOR MANY OF THE COMPANY'S BROMINE-BASED
SPECIALTY CHEMICALS, AND THE INTRODUCTION OF NEW PRODUCTS, REVENUES FOR THE
PERFORMANCE CHEMICALS GROUP INCREASED TO $603.4 MILLION.

{GRAPH -- PERFORMANCE CHEMICALS GROUP (in millions of dollars)}

The Performance Chemicals Group continued to advance in 1993, reflecting a
strong demand for most brominated derivatives. Great Lakes' high value-added
products serve an ever-growing range of applications in specialty markets the
world over. This diverse group is composed of three discrete sectors: polymer
additives, functional intermediates and fine chemicals, and industrial
specialty chemicals.

POLYMER ADDITIVES
By offering the most comprehensive line of bromine-based flame retardant
compounds in the world, Great Lakes benefits from market driven, geographic
diversification. While demand in the United States remained strong, business
conditions in the Pacific Rim also improved despite the fact that Japan, one
of the region's largest markets, remained mired in recession. Likewise in
Europe, the Company's Great Lakes Chemical (Europe), Ltd., subsidiary reported
increased volumes from the prior year while contending with the well-documented
economic woes in that part of the world.
In order to meet its commitment to supplying customer requirements,
Great Lakes increased production capacities of elemental bromine and a number
of derivatives. Demand for two of the Company's primary flame retardant
products, tetrabromobisphenol-A and decabromodiphenyl oxide, dictated
additional expansion. Other debottlenecking and manufacturing improvements
will come on-stream this year. These actions promise to keep Great Lakes at
the forefront of the brominated polymer additive business.
Building on this base, the Company expanded its worldwide plastics
additives business through the acquisition of Chemische Werke LOWI GmbH & Co.
(Lowi), a leading manufacturer of antioxidants and UV absorbers. This
acquisition produced an immediate bottom-line impact and positioned the Company
to extend its base in two existing world market areas. Lowi's technology base
includes hindered amine light stabilizers (HALS), an important class of UV
absorbers. Additionally, Lowi expands our polymer additives business into
rubber and adhesives applications.
Two other initiatives expanded our presence in key markets. The
Company further developed reactive brominated flame retardant products by
creating new dibromostyrene derivatives for resins, fibers and textile
backcoating applications. Secondly, full registration of NH-1197(R), a
proprietary char forming flame retardant, enables the Company to meet specific
market requirements on a global basis.

FUNCTIONAL INTERMEDIATES AND FINE CHEMICALS
The largest contributor in this sector, the Company's furfural and furfural
derivatives business, mitigated severe market conditions with reduced
manufacturing costs and increased sales of higher margin products. A lingering
recession in the world foundry industry continues to restrict demand,
compounded by excess inventories and manufacturing capacity. The combined

[PHOTO]

THE ADDITION OF ANTIOXIDANTS AND HINDERED AMINE LIGHT STABILIZERS (HALS) TO
GREAT LAKES' LINE OF POLYMER ADDITIVES ALLOWS ITS GLOBAL CUSTOMERS TO PROTECT
POLYMERS FROM THERMAL DEGRADATION, OUTDOOR DISCOLORATION, AS WELL AS MEET
TOUGH FLAME RETARDANT CODES IN SUCH APPLICATIONS AS TEXTILE FIBERS, UPHOLSTERY,
WALL COVERINGS AND CARPETS.

14
<PAGE> 3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION

PERFORMANCE CHEMICALS GROUP

effect has created severe competition and significantly reduced selling prices.
Several cost reductions and engineering improvements implemented by the Company
have improved productivity. At the same time, process improvements have
enhanced the profitability of the Company's POLYMEG(R) polyols product line.
During the year, the Company took a number of steps for the future.
The manufacturing facilities in Memphis, Tennessee, and Geel, Belgium, received
ISO 9002 certification. This designation represents our commitment to
stringent quality standards.
Octel Chemicals Limited (OCL) performed a wide range of complex
manufacturing activities, which doubled their business. This increased
activity enhanced Great Lakes' presence in the European specialty and fine
chemicals industry while augmenting the Company's manufacturing know-how in a
wide range of high value-added specialty chemicals.

INDUSTRIAL SPECIALTY CHEMICALS
This sector also took steps to secure long-term growth for a number of
important products. FM-200(TM), Great Lakes' breakthrough environmentally
friendly fire extinguishant, received U.S. EPA approval for replacing Halon
1301. FM-200 combines excellent fire extinguishing properties with zero ozone
depletion potential and sound toxicological properties.
In an unrelated area, the Company commissioned a new plant to
manufacture high purity bromide sales for a wide variety of applications in
photographic materials, catalysts, pharmaceutical intermediates and other fine
chemicals. This facility offers another value-added extension of bromine
technology.

OUTLOOK
The Performance Chemicals Group offers the means for significant growth in 1994
and beyond. Just as in the past, the Company will benefit from a new product
pipeline as fertile as ever, selective acquisitions, new market penetrations
and expansion of its existing businesses. This strategy enabled the Company to
not only grow during economic recessions in several major markets, but it will
accelerate our progress in 1994 as these conditions improve.

WATER TREATMENT CHEMICALS GROUP

REGISTERING SOME OF THE CORPORATION'S SHARPEST GAINS, THE WATER TREATMENT
CHEMICALS GROUP POSTED REVENUES NEARLY 40 PERCENT HIGHER THAN 1992. KEY
ACQUISITIONS AND THE CONTINUED PENETRATION INTO U.S. AND INTERNATIONAL MARKETS
CONTRIBUTED TO THIS SUCCESS.

{GRAPH -- WATER TREATMENT CHEMICALS GROUP (in millions of dollars)}

Sales for the Water Treatment Chemicals Group surpassed all previous levels in
1993. This business benefited from market penetrations around the world, new
product introductions, and overall improved efficiencies in the manufacture and
marketing of the Company's products. A return to normal weather conditions in
important regions of the United States extended the pool season and contributed
meaningfully to the year's success.

RECREATIONAL
As a premier full-line supplier of both chemicals and equipment for pools and
spas, Great Lakes' wholly-owned subsidiary Bio-Lab, Inc., continued to open new
doors to vast new markets. The early 1993 acquisition of Bayrol Chemische
Fabrik GmbH, Europe's leading supplier to recreational markets, enabled Great
Lakes to immediately access important markets in Mediterranean countries, as
well as throughout the continent. Added to Bio-Lab's established presence in
Canada, Australia, and New Zealand, Great Lakes is positioned to serve the
profitable recreational water treatment business in the world's key markets.
Bio-Lab took another key step in its growth strategy with the
acquisition of Aqua Chem. This move brought with it a number of benefits such
as increased U.S. market share and a well-established line of products. Most
importantly, Aqua Chem provided direct access to the fastest growing sector of
the pool and spa products distribution market, mass merchandisers such as
retail powerhouses Home Depot, K-Mart and Sam's Wholesale Club.
Bio-Lab achieved its premier position by delivering comprehensive
customer support and innovative product development. It offers the most
sophisticated computerized pool water analysis in the industry today. A
consumer may go to any of Bio-Lab's over 5,000 outlets and receive applications
support designed to keep all the elements of pool water balanced at the proper
levels.
Again in 1993, Bio-Lab introduced new products and launched a patented
program to penetrate a new market sector.

<PAGE> 4
REVIEW OF OPERATIONS

WATER TREATMENT CHEMICALS GROUP

The new BioGuard(R) SoftSwim(TM) system offers pool owners an effective
non-chlorine system for treating pool water. For pool owners who prefer a
more conventional approach, Bio-Lab offers the BioGuard(R) Smart Sticks(TM) that
allow a convenient, once-a-week application. Bio-Lab also unveiled the
Vantage(TM) Commercial System, which utilizes patented bromine-based technology,
for municipal pools, water parks, resort or specialty pools, and other large
commercial pools.

INDUSTRIAL
Around the world, countries are striving to implement more stringent standards
to protect water as a vital natural resource. Great Lakes is meeting this
global demand for new water treatment technology with its high-performance,
bromine-based biocides.
For some time now, we have documented the factors driving the advent
of bromine technology in industrial applications. Great Lakes' proprietary
products offer the ability to replace traditional biocides with environmentally
suitable alternatives; address safety and handling problems encountered with
conventional products; and meet the growing need for products that will comply
with increasingly stringent toxicological and regulatory standards.
Given these attributes, the Company's products are penetrating markets
not only in the United States, but around the world as well. A new consumer
application recently approved in Japan promises to increase dramatically the
demand for bromine-based products throughout the Pacific Rim. At the same
time, our wholly-owned subsidiary Great Lakes Chemical (Europe), Ltd., is
actively meeting market needs in Western Europe.
One of the most significant accomplishments during the year occurred
when GLC(E) secured product approvals for BromiCide(R) in Sweden. This country
is widely considered to have the most stringent environmental requirements in
Europe. With this certification in hand, Great Lakes is gaining access in
other markets. In Germany, for example, regulatory authorities have qualified
BromiCide(R) for pulp and paper applications. Having demonstrated its
viability, the product is currently under review for similar uses in the United
States and Canada, where these markets await alternatives to current products.

[PHOTO]

EXTENDING ITS MARKET PRESENCE, BIO-LAB RECENTLY ACQUIRED THE AQUA CHEM(R)
SWIMMING POOL CHEMICALS DIVISION, WHICH PROVIDES AN ESTABLISHED FOOTHOLD IN
MAJOR RETAIL OUTLETS ACROSS THE COUNTRY.

OUTLOOK
The future of Great Lakes' Water Treatment Chemicals Group remains bright. The
Company is one of this country's top suppliers of pool and spa chemicals and
equipment in the $1 billion-plus U.S. market. And through its extensive
international presence, the Company is advancing on a global scale. At the
same time, demand is increasing for its bromine-based industrial water
treatment products that have excellent biocidal characteristics and meet
important environmental considerations. New, emerging opportunities in this
country range from broader penetration in wastewater treatment to potable
water treatment applications in home and municipal markets.

16
<PAGE> 5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION

PETROLEUM ADDITIVES GROUP

A NUMBER OF INITIATIVES, RANGING FROM AN AGGRESSIVE DIVERSIFICATION STRATEGY TO
FORTIFYING ITS LEADERSHIP POSITION IN WORLD MARKETS, CONTRIBUTED TO THE ONGOING
EXPANSION OF THE COMPANY'S PETROLEUM ADDITIVES GROUP, WHICH REGISTERED REVENUES
OF $551.2 MILLION.

{GRAPH - PETROLEUM ADDITIVES GROUP (in millions of dollars)}

Like its other major groups, Great Lakes' Petroleum Additives operations posted
impressive gains in earnings and revenues by improving the fundamentals of its
existing business, increasing its manufacturing efficiencies and penetrating
new markets with innovative product development. At the heart of this business
is Octel Associates, the world's leading producer of certain antiknock
compounds and a leading developer and manufacturer of other fuel additives and
specialty chemical products.
Octel completed two initiatives to enhance the future of its primary
business. Earlier in the year, Octel began supplying additional quantities of
antiknock compound to Du Pont for the Mexican market through an extension of
its earlier supply agreement with Du Pont. An in January 1994, Octel announced
it had reached a long-term agreement to supply Ethyl Corporation's antiknock
compound requirements. Ethyl, in turn, will shut down its only remaining
facility for this product on March 31, 1994. This will enable Octel to
maintain its high manufacturing rates, its low unit costs, and will extend the
manufacturing viability of its plants. Octel stands today better positioned to
lead this market through the challenges that lie ahead.
Another key element of Octel's strategy for future growth entails
improving manufacturing efficiency. Working in cooperation with Great Lakes
engineers, Octel improved its bromine extraction technology to increase
production by about one-third. This move not only impacts antiknock compound
economics, but also provides a lower cost source of European-based bromine for
future product line expansion in that area of the world.
As the world's largest producer of bromine from seawater, and the
world's second largest producer of sodium, Octel offers the Company an abundant
supply of low-cost raw materials for use in specialty chemicals. Combined with
its European manufacturing base and international marketing and distribution
network, Octel is fully equipped to emerge as a major producer of specialty
chemicals.
Aggressive research and development efforts have generated several new
intermediates, plus a number of organic products developed for existing
markets. Three agrochemicals with definite market potential have advanced to
the commercialization stage.
Octel's primary diversification efforts, however, focus on other fuel
additives, including cetane enhancers, gasoline and

[PHOTO]

WELL KNOWN AS A WORLD LEADER IN FUEL ADDITIVES TECHNOLOGY, OCTEL ASSOCIATES IS
ALSO ACTIVELY ENGAGED IN INNOVATIVE RESEARCH INTO NEW SPECIALTY CHEMICALS SUCH
AS WORK IN CHIRAL CHEMISTRY DESIGNED TO DEVELOP THIN LAYER COATINGS FOR USE IN
THE ELECTRONICS INDUSTRY.

17
<PAGE> 6

REVIEW OF OPERATIONS

PETROLEUM ADDITIVES GROUP

diesel detergents, combustion and cold flow improves for diesel fuel, and a
variety of corrosion inhibitors. At the forefront of our fuel additives
research is Octel's Milton Keynes Engine Laboratory, a world-class fuel and
development facility.
Once Octel launches a new product for specific market requirements, it
is fully equipped to introduce these products on a global basis. The joint
marketing agreement with Du Pont will open North American markets for Octel's
fuel additives. During the year, Octel restructured its sales force to place
increasing emphasis on market opportunities outside of the antiknock area. As
a result, sales of its growing range of fuel additives increased substantially,
not only in its traditional markets, but also in North America.

OUTLOOK
The Company's Petroleum Additives business promises to meet our expectations
for years to come. Today, the prospects for Octel's primary business have
never been brighter, nor its competitive position stronger. By implementing a
well-defined strategy, Octel has secured its prominent position. It is
prepared to serve current markets, as well as new demands in growth markets
such as Russia, China, and Eastern Europe.
While meeting its stewardship responsibilities in its main product
line, Octel will advance its diversification efforts across many technologies.
Its new fuel additives and specialty chemical products will accelerate the
transformation of this company to serve more diverse markets and plan an even
more integral role in Great lakes' future.

SPECIALIZED SERVICES AND MANUFACTURING GROUP

GREAT LAKES' SPECIALIZED SERVICES AND MANUFACTURING GROUP DELIVERED A RECORD
PERFORMANCE IN 1993, POSTING REVENUES 69 PERCENT HIGHER THAN THE PREVIOUS YEAR.
OUTSTANDING PERFORMANCES BY THE COMPANY'S SUBSIDIARIES--EIM CORPORATION, WTL
RESEARCH LABORATORIES, AND THE NEWLY-FORMED ENVIRA-ENERGY PERFORMANCE
GROUP--ADDED TO THE EXCELLENT GAINS.

{GRAPH -- SPECIALIZED SERVICES AND MANUFACTURING GROUP (in millions of
dollars)}

No matter how large it grows, Great Lakes remains an entrepreneurial company
committed to developing and acquiring technologies that serve fast-growing
markets. By selectively targeting emerging technologies, the Company accesses
businesses that produce high margins and high returns on equity.

CUSTOM MANUFACTURING
Great Lakes extends its engineering and manufacturing expertise by working on
single customer projects to develop and manufacture custom compounds and
intermediates that meet complex performance, environmental and quality
requirements. This sophisticated work is conducted primarily at the Company's
manufacturing facilities in Memphis and Newport, Tennessee; Konstranz, Germany;
and Manchester, England. These plants maintain a total quality management
system that offers customers worldwide assurance of the very highest of quality
standards.
In 1993, Great Lakes added to its track record by obtaining a
multi-year contract to manufacture an intermediate used in the production of
pesticide products and animal health products. Secrecy agreements prevent
further disclosure of this and other new opportunities that build upon the
Company's highly regarded ability for speedy scale-up from basic chemistry to
full-production manufacture.

ENVIRO-ENERGY PERFORMANCE GROUP
Reorganized in 1993 to reflect its broadened capabilities, this group consists
of OSCA, Inc., and three subsidiaries: Four Seasons Environmental, Aquaterra
and IES which all perform environmental services.
In 1993, OSCA posted record results as a leading producer and supplier
of bromine-based clear completion fluids, as well as a variety of ancillary
services used in the production of oil and natural gas. This record
performance reflected a marked increase in activity in the oil and gas
industry along the Gulf of Mexico. OSCA also benefitted from the penetration
of new international markets, both in the North Sea production fields and in
Central and South America.
OSCA's 1993 acquisitions, which extended its presence in the
environmental services sector, rounded its diversification objectives. The
success of this initiative is marked by new contracts which could generate
revenues in excess of $90 million over the next four years. This work
represents both public and private sector commitments for environmental
remediation services.

<PAGE> 7

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION

SPECIALIZED SERVICES AND MANUFACTURING GROUP

TOXICOLOGICAL TESTING
Great Lakes' WIL Research Laboratories, Inc., subsidiary is one of a select few
fully integrated toxicological testing facilities in the U.S. It performs an
integral role in the development and approval processes for new products. WIL
set new financial highs for a sixth consecutive year in 1993. WIL conducts
sophisticated testing for major pharmaceutical and chemical companies around
the world. Together with newly expanded capabilities for toxicological
reviews, WIL is well-positioned to continue along this growth curve for years
to come.

[PHOTO]

GREAT LAKES' ENVIRO-ENERGY PERFORMANCE GROUP OFFERS A COMPREHENSIVE
LINE OF ENVIRONMENTAL CONSULTING AND REMEDIATION SERVICES, INCLUDING FOUR
SEASONS' INNOVATIVE MOBILE THERMAL TREATMENT SYSTEM WHICH IS A COST-EFFECTIVE
METHOD FOR TREATING CONTAMINATED SOILS.

ENGINEERED SURFACE TREATMENTS
E/M Corporation, a wholly-owned Great Lakes subsidiary, is a leading developer
and applicator of engineered surface coatings and finishes that impart a
variety of value-added properties to surfaces, including corrosion control,
electromagnetic shielding or conductivity, lubricity, texture and color.
Extending its leadership position in engineered surface treatment technology
across a myriad of markets, E/M more than offset continued declines in the
aerospace industry, one of its principal markets. This past year, the business
realized an important benefit from its halon recycling business. This unique
environmental program created a viable opportunity for the fire service
industry to manage redistribution of halon fire extinguishants while providing
a commercial grade supply of halon during the interim period when certain
applications convert to FM-200(TM).

INTERNATIONAL TRADING
Through Great Lakes' 78 percent ownership, Chemol RT provides access to key
Central and Eastern European markets for a wide range of the Company's products
and services. Chemol, the former state-owned trading company of Hungary
imports and exports chemical products that include organic and inorganic
chemicals, petrochemicals and finished agrochemicals. While the business has
been adversely affected by recessionary conditions throughout Europe, Chemol
had demonstrated its ability to penetrate these markets and successfully
introduce Great Lakes' products to a new customer base.

OUTLOOK
The Specialized Services and Manufacturing Group is positioned for
across-the-board growth as the Company continues to apply its fundamental
business principles. Each of them has strategically created leadership
positions in specialty markets that promise continued growth well into the
future.

19
<PAGE> 8
FINANCIAL REVIEW

<TABLE>
<CAPTION>
(in thousands of dollars, except per share data)

1993 1992 1991 1990

<S> <C> <C> <C> <C>
SUMMARY OF EARNINGS
Revenues $ 1,827,796 1,538,169 1,347,881 1,113,519
Percent increase
over previous year... 18.8 14.1 21.0 31.4
Income before taxes and
minority interest.... $ 415,023 361,022 320,321 289,890
Percent of revenues..... 22.7 23.5 23.8 26.0
Income taxes............ $ 110,600 100,000 68,000 68,600
Percent of income before
taxes...... 28.8 30.1 30.2 32.8
Net income.............. $ 272,784 232,735 157,473 140,849
Per share*.............. $ 3.82 3.27 2.23 2.00
Percent of revenues..... 14.9 15.1 11.7 12.6
Percent of stockholders'
average equity....... 23.6 23.8 19.2 21.1

FINANCIAL POSITION AT YEAR-END
Working capital......... $ 489,179 342,171 338,009 301,092
Current ratio........... 2.3 1.8 2.1 2.0
Capital expenditures.... $ 79,270 69,368 71,243 48,565
Total assets............ $ 1,900,864 1,731,989 1,649,132 1,406,296
Long-term debt.......... $ 61,041 45,642 139,788 76,657
Percent of total
capitalization....... 5.1 7.3 4.4** 12.8

SHARE DATA
Stockholders' equity.... $ 1,256,563 1,052,851 900,344 744,158
Per share*................ $ 17.50 14.71 12.66 10.54
Cash dividends per share*
Declared during year...... $ .35 .31 .27 .23
Paid during year.......... $ .34 .30 .26 .22
Payout as percent of net
income................. 9.2 9.5 12.1 11.5
Shares outstanding*
Average during year....... 71,329,145 71,164,010 70,700,332 70,287,088
At year-end............... 71,817,996 71,576,558 71,090,090 70,609,250
Stock price*
High...................... $ 84 71 3/8 58 34
Low....................... $ 64 1/2 50 1/4 30 3/8 20 3/8
At year-end............... $ 74 5/8 69 1/4 57 1/4 31 7/8
</TABLE>

*Restated to reflect the 100 percent stock dividends on January 30, 1992,
October 31, 1989, and October 1, 1983.
**Excludes debt of $125 million incurred to fund the acquisition of Shell's
interest in Octel.

20
<PAGE> 9

Great Lakes Chemical Corporation and Subsidiaries

<TABLE>
<CAPTION>
Ten-Year
Growth
1989 1988 1987 1986 1985 1984 1983 Percentage
<S> <C> <C> <C> <C> <C> <C> <C>
847,738 616,046 501,010 305,703 281,952 283,261 228,220 23.1
37.6 23.0 63.9 8.4 (.5) 24.1 30.6
201,671 143,488 85,036 42,717 45,368 56,543 39,180 26.6
23.8 23.3 17.0 14.0 16.1 20.0 17.2
45,000 40,200 29,500 15,900 16,550 20,975 15,338 21.8
26.8 28.0 34.7 37.2 36.5 37.1 39.1
122,918 103,288 55,536 26,817 28,818 35,568 23,842 27.6
1.76 1.48 .83 .44 .48 .60 .41 25.0
14.5 16.8 11.1 8.8 10.2 12.6 10.4
22.9 23.6 18.2 13.0 15.7 22.6 18.2

236,648 100,238 101,083 113,370 78,009 66,728 50,856 25.4
2.1 1.8 1.9 2.4 2.3 2.4 2.3
40,466 47,017 35,186 18,327 25,601 28,770 20,370
1,097,400 663,838 577,087 491,567 323,121 284,414 227,040 23.7
113,700 19,266 42,149 163,319 36,862 35,011 25,098
17.5 3.7 9.4 40.1 15.5 15.6 14.9

590,861 482,225 392,602 216,265 195,416 172,750 141,410 24.4
8.41 6.91 5.64 3.60 3.26 2.89 2.38 22.1

.20 .18 .16 .14 .12 .10 .08 15.9
.19 .17 .15 .13 .11 .09 .08 15.6
11.1 11.8 18.6 30.2 23.8 16.0 19.0

69,885,212 69,658,840 66,469,556 59,992,472 59,841,260 59,654,404 58,606,696
70,232,826 69,767,184 69,580,948 60,044,516 59,908,468 59,741,792 59,436,564

24 16 1/2 19 1/4 11 1/8 11 1/8 9 5/8 9 7/8
14 1/8 12 1/8 9 7 1/2 7 7/8 6 4 1/4
23 5/8 14 5/8 13 1/2 9 9 3/4 8 3/8 8 1/2 24.3
</TABLE>

21
<PAGE> 10

MANAGEMENT'S DISCUSSION AND ANALYSIS

OPERATING RESULTS
1993 COMPARED WITH 1992
Revenues for 1993 were a record $1,827.8 million, an increase of 18.8 percent
over the $1,538.2 million reported in 1992. For the five and ten-year periods
ended in 1993, the Company's revenues have grown at an annual compound rate of
24 percent and 23 percent, respectively.

Net sales in 1993 were $1,792 million, an increase of 19.8 percent over 1992's
net sales of $1,496.5 million. Price and volume gains in the core business
amounted to approximately $95 million and acquisitions contributed about $290
million. These gains were offset by $90 million of unfavorable currency
effects. The acquisitions of Bayrol, Lowi, Four Seasons and Aqua Chem,
completed in 1993, added approximately $120 million in sales. In addition, the
full year effect of the 1992 acquisitions of Chemol, Societe Francaise
d'Organo-Synthese (GLCF) and Octel Kuhlmann added approximately $170 million in
sales.

Again in 1993, approximately 50 percent of the Company's sales were denominated
in foreign currencies, particularly the British pound sterling. To minimize the
impact of currency fluctuations, the Company uses foreign exchange contracts,
average put options, and other financial instruments. In early 1993, a dollar
billing program was implemented which converted approximately 40 percent of
Octel's sales from pound sterling to dollars. This program's objective is to
insulate Octel's profits, as measured in dollars, from fluctuations of the
pound sterling. For the year 1993, approximately 30 percent of Octel's sales
were billed in dollars. It is anticipated that 1994 dollar billing will amount
to approximately 40 percent of sales. Despite the success of these programs,
the relative strength of the dollar against most European currencies, including
the pound sterling, negatively impacted sales by approximately $90 million.
Price increases, primarily for petroleum additives and the Company's halon
products which were phased out of production at the end of 1993, offset
approximately two-thirds of the currency effect. Volume increases and favorable
product mix resulted in a net increase in sales of approximately $35 million.
Volume gains were registered in the Company's domestic Performance Chemicals,
Water Treatment Chemicals and the oil field services businesses. The
recessionary economy in Europe and Japan negatively affected volumes especially
for furfural-based products.

<TABLE>
<CAPTION>
- ---------------------------------------
Percent Increase in
Year Net Sales from Prior Years
- ---------------------------------------
<S> <C>
1993 19.8
1992 14.4
1991 22.6
- ---------------------------------------
</TABLE>

Equity in earnings of affiliates and other income was $35.8 million, down 14
percent from $41.7 million achieved in 1992. The Company's share of income from
affiliates declined $4.2 million to $10.9 million, reflecting a decline in the
recognized earnings of Huntsman Chemical Corporation after goodwill
amortization and the effect of acquiring a 100 percent interest in Octel
Kuhlmann in August 1992. Prior to the acquisition, Octel's 50 percent interest
in Octel Kuhlmann was recorded on an equity basis.

Lower interest rates in 1993 resulted in interest income declining $3 million,
or 22 percent, to $10.6 million, despite an increase in average short-term
investments.

Other income in 1992 included $3.9 million of insurance reimbursements for
litigation expense incurred in 1987 to 1991 relative to ethylene dibromide
(EDB). Other income in 1993 included a comparable amount related to the October
1993 sale of the Company's lube oil additives business that was acquired as
part of the October 1992 purchase of GLCF. The sale of this business will allow
management to focus more attention on its core polymer additives business.

Gross margins of 36.8 percent remained essentially unchanged from the 36.9
percent achieved in 1992. Gross profits of $659 million were up $106 million,
or 19 percent over 1992's $552 million. On an overall basis, about half of the
increase in gross profits was contributed by recent acquisitions. Profit
margins of these businesses, especially the Hungarian trading company, Chemol
RT, are generally lower than the Company's average. Actions are progressing to
affect the synergies, cost savings, and market expansions necessary to bring
performance in line with corporate goals. The remainder of the gross profit
increase came from the aforementioned price and volume improvements which more
than offset negative currency effects. Changes in production costs and

22
<PAGE> 11
Management's Discussion and Analysis of Results of Operations and
Financial Condition

purchased material prices were not a significant factor on gross margin. More
specifically, Performance Chemicals showed improvement on the strength of the
flame retardant business. The demand for these products and other bromine-based
products has resulted in capital projects to debottleneck bromine capacity and
to expand production capacity for other bromine derivatives which will come on
stream in early 1994.

Octel improved their already excellent margins on the strength of price
increases and production efficiency. Alkyl lead additives sales volume declined
about 2.5 percent from 1992, before factoring in the acquisition of Octel
Kuhlmann. This acquisition plus the recently announced agreement to supply
Ethyl Corporation's requirements are expected to extend the life of Octel's
manufacturing facilities and improve the efficiency of its worldwide
distribution activities.

Gross margins increased at Bio-Lab as a result of higher sales volumes due to a
relatively good weather year, coupled with the acquisition of Aqua Chem, the
introduction of new products and manufacturing process improvements.

OSCA continued the improvement started in the second half of 1992, buoyed by a
relatively high level of drilling activity in the U.S. Gulf Coast. More
importantly, OSCA was able to extend its participation in international
markets, principally the North Sea, and become a full-line supplier to drilling
companies.

QO Chemicals' margins declined as the protracted European and Japanese
recession kept foundry industry activity at very low levels, and foreign
competition lowered prices in an attempt to obtain market share. Cost
reductions and productivity gains were partially successful in offsetting the
effects of the price and volume declines.

<TABLE>
<CAPTION>
- -------------------------------------
Gross Profit as a
Year Percentage of Net Sales
- -------------------------------------
<S> <C>
1993 36.8
1992 36.9
1991 36.3
- -------------------------------------
</TABLE>

Selling, administrative and research (SAR) expenses in 1993 were $234 million,
an increase of $45 million, or 24 percent, over last year's $189 million. As a
percentage of sales, SAR expense increased to 13.1 percent from 12.6 percent.
Acquisitions accounted for most of the increase in expense and higher SAR
percent to sales ratio. Bayrol, for example, a packager and distributor of pool
chemicals, has higher sales and marketing requirements in relation to sales
compared to the Company's core businesses.

Increased emphasis on research and development projects in core businesses
added approximately $6 million to SAR expense. Over the past few years, the
Company has concentrated on upgrading its research and development capabilities
and expanding its laboratory and pilot plant facilities. Research and
development efforts have been focused on the development of new flame
retardants, halon replacements, furfural based adhesives, and pharmaceutical
intermediates at West Lafayette, as well as new fuel additives at Octel and
water treatment products at Bio-Lab.

<TABLE>
<CAPTION>
- ----------------------------------------------------
SAR Expense as a Percentage of Net Sales

Selling &
Year Administration R&D Total
- ----------------------------------------------------
<S> <C> <C> <C>
1993 10.0 3.1 13.1
1992 9.5 3.1 12.6
1991 9.6 3.0 12.6
- ----------------------------------------------------
</TABLE>

Interest and other expenses amounted to $45.5 million in 1993,
compared to $43.7 million in 1992. Interest expense, net of amounts
capitalized, was $7.2 million, down from $11.4 million in 1992, reflecting
reduced borrowings at lower interest rates. Amortization of intangible assets,
primarily goodwill, increased $11 million to $27.5 million from the $16.5
million recorded in 1992. In 1993, the Company accelerated the amortization of
goodwill related to the purchase of Octel to better match amortization with the
anticipated decline of the lead compound business resulting in an additional $9
million charge this year. The balance of the goodwill amortization increase is
associated with recent acquisitions. Foreign currency exchange gains and
losses, which are netted in other expense, resulted in gains of $0.5 million,
down from gains of $3.1 million in 1992. In 1993, other expenses declined $7.7
million from 1992. This decline is due in large part to the 1992 write-off of a
$9.1 million Russian receivable relating to sales made in 1991.

The minority interest in income of subsidiaries, which includes both an
approximate 12 percent minority interest in Octel and a 22 percent minority
interest in Chemol, increased 11.8 percent to $31.6 million, due to the higher
earnings of these operations. The minority interest in Octel is before income
taxes since earnings are predominantly from a partnership and, therefore, taxes
apply to each partner individually.

<TABLE>
<CAPTION>
- ----------------------------------------------------
Income Before Taxes and Minority
Year Interest as a Percentage of Revenues
- ----------------------------------------------------
<S> <C>
1993 22.7
1992 23.5
1991 23.8
- ----------------------------------------------------
</TABLE>

Income taxes of $110.6 million increased 10.6 percent over last year's $100
million as a result of higher pretax income. The effective tax rate

23
<PAGE> 12
Management's Discussion and Analysis

for the year was 28.8 percent compared to 30.1 percent in 1992. The 1.3 point
decline in the rate results from adoption of Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" and the reversal of certain
prior year tax provisions that are no longer required. The reductions are
offset in part by the cumulative effect of the change in tax laws resulting
from the passage of the 1993 Tax Act.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Effective Tax Rate
Year Percentage
- --------------------------------------------------------------------
<S> <C>
1993 28.8
1992 30.1
1991 30.2
- --------------------------------------------------------------------
</TABLE>

Net income in 1993 was $272.8 million, a 17.2 percent increase over 1992 net
income of $232.7 million. Earnings per share increased to $3.82 per share, up
16.8 percent from the $3.27 per share earned in 1992. Net income as a
percentage of revenues was 14.9 percent, down slightly from 15.1 percent in
1992 due to the lower relative earnings to revenues of some of the recent
acquisitions.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
Year Net Income Per Share
- ----------------------------------------------------------------------
<S> <C>
1993 $3.82
1992 3.27
1991 2.23
- ----------------------------------------------------------------------
</TABLE>

1992 COMPARED TO 1991
Revenues for 1992 were $1,538.2 million, an increase of 14.1 percent over the
$1,347.9 million reported in 1991. The growth reflects higher alkyl lead sales
by Octel; the acquisitions of Octel Kuhlmann, Chemol, GLCF, and Ward Blenkinsop
(now Octel Chemicals Limited); high demand for flame retardants; and increased
custom manufacturing business.

Gross profits for 1992 were $552 million, an increase of 17 percent over the
$474 million reported in 1991. Gross margins were 36.9 percent and 36.3 percent
for 1992 and 1991, respectively.

Improvements in flame retardants, industrial water treatment, fuel additives,
and custom manufacturing were the principal contributors to the margin gain.
The recreational water treatment business maintained margins in a very poor
weather year, and QO Chemicals maintained its market position in an extremely
competitive environment. OSCA's results were dampened by sluggish U.S.
drilling activity.

SAR expenses of $189 million in 1992 were up 15 percent over 1991's $164
million but remained at 13 percent of sales. While most of the increase was due
to acquisitions, the Company's new European headquarters and the expenses
related to Bio-Lab's distribution business were also factors. Research and
development costs amounted to $47 million in 1992, a 20 percent increase over
1991. Acquisitions, additional applications laboratories, expanded pilot plant
programs, and research related to government product registrations all
contributed to the higher costs.

Net income for 1992 was a record $232.7 million, a 48 percent increase over
1991 income of $157.5 million. On a per share basis, earnings were $3.27, or 47
percent better than the $2.23 earned in 1991.

FINANCIAL CONDITION AND LIQUIDITY
The Company again exceeded its goal of returning 20 percent or more on
stockholders' equity, achieving 23.6 percent. This return reflects management's
emphasis on allocating resources to projects and strategic acquisitions that
meet or exceed the Company's return on investment targets in addition to strong
earnings of the core businesses.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Year Return on Equity
- ------------------------------------------------------------------
<S> <C>
1993 23.6
1992 23.8
1991 19.2
- ------------------------------------------------------------------
</TABLE>

Cash provided by operating activities was $300 million in 1993. This strong
cash flow has allowed the Company to finance the expansion of its core
businesses, make strategic acquisitions, and increase stockholders' dividends,
while at the same time pay down debt and increase available cash. At December
31, 1993, the level of debt to total capitalization was 5.1 percent, down from
7.3 percent as of December 31, 1992. Cash and cash equivalents were $179.7
million, including $151.3 million of short-term cash investments, an increase
in total cash and cash equivalents of $38.9 million over the prior year-end.

The Company's investment in working capital, excluding cash and cash
equivalents, increased $108 million to $309 million at December 31, 1993.
Inventory and accounts receivable have increased while accounts payable and
debt have been reduced. The increase in accounts receivable amounting to $42
million, or 12 percent, results from strong late in the year sales of specialty
chemicals, fuel additives, and recreational water treatment chemicals. Days
sales outstanding in accounts receivable increased 5 days from December 31,
1992, to 76 days outstanding as of December 31, 1993, reflecting the pattern of
petroleum additive sales to refineries which have extended terms. Inventories
increased approximately $17 million due to the additional pool chemical
inventories associated with the 1993 acquisitions of Bayrol and Aqua Chem.
Inventory turnover at 3.9 times remained essentially unchanged from the prior
year-end.

Plant and equipment additions of $79.3 million were approximately 14.3 percent
more than the $69.4 million in 1992. In 1993 the Company spent $6 million to
complete its new world headquarters, approximately $12 million on environmental
related projects, with the balance of the spending for capacity additions and
process improvements. Capital spending in 1994 is expected to be in the $80
million

24
<PAGE> 13
Managements's Discussion and Analysis of Results of Operations and Financial
Condition

range. Capital spending related to environmental projects should be
comparable to 1993.

Commercial paper markets continued to be the Company's primary source of
external financing as interest rates remained extremely low during the year. At
December 31, 1993, no commercial paper debt was outstanding. During the year,
the Company made use of commercial paper borrowing to supplement cash flow for
seasonal working capital requirements and arbitrage opportunities.

The Company recently negotiated a 3-year, $190 million credit facility with
various banks, which provides a backup to the commercial paper program. The new
facility replaces an existing facility that expires in May 1994. Additionally,
the Company has a shelf registration on file with the Securities and Exchange
Commission for $200 million of debt securities which could be issued if needed
to finance acquisitions or other corporate requirements. Management has no
immediate plans to draw down the revolving credit facility or issue debt
securities under the registration statement.

Other noncurrent liabilities of $124 million include a $48.6 million reserve
for expected future personnel reductions, plant closure and decontamination
costs at Octel's alkyl lead plants in the United Kingdom, France and Italy as
demand for these products diminishes. Approximately $3.5 million was expended
in 1993 compared to $5.2 million in 1992 primarily to complete the closure of a
facility in Germany. While the recent agreement to supply Ethyl Corporation's
requirements for alkyl lead will keep all the plants operating at a high level,
it is anticipated that operations in France and Italy will cease over the next
three to five years. Production at the United Kingdom plant should continue
into the next century at the current rate of decline.

Deferred revenues of $62.4 million included in other noncurrent liabilities
represent partial payments for future delivery of product under a long-term
supply agreement with a major customer. The Company recognizes revenue using
the units-of-production method to amortize deferred revenue for this product
over the expected life of the contract. There was no production under this
agreement in 1993. Under the terms of the contract, the Company is entitled to
retain the advanced payment regardless of production volumes.

Stockholders' equity was $1,256.6 million, or $17.50 per share, at December 31,
1993, compared to $1,052.9 million, or $14.71 per share, at the end of 1992.
Over the past ten years, stockholders' equity has grown at a compound rate of
24.4 percent.

Dividends increased for the twenty-first consecutive year totaling
$25 million, or $0.35 per share, compared with $22.1 million, or $0.31 per
share, in the prior year.

In 1993, the Company purchased 377,100 shares of its stock for a total cost of
$25.5 million under a one million share repurchase program authorized by the
Board of Directors. The average price per share of the stock purchased was
$67.73. Management's intention is to acquire additional shares to the extent of
the authorization when market conditions warrant.

The cumulative translation adjustment component of stockholders' equity
represents the remeasurement of foreign currency denominated assets and
liabilities into U.S. dollars. The cumulative translation adjustment decreased
stockholders' equity by $25.1 million in 1993. The decline reflects the
weakening of European currencies, particularly the British pound sterling,
against the dollar. Approximately 42 percent of the Company's net assets are
in Europe, predominantly the United Kingdom.

OTHER MATTERS
The Company's operations, like those of most companies involved in the chemical
industry, are subject to increasingly stringent laws and regulations relating
to maintaining or improving the quality of the environment. Such laws and
regulations, along with the Company's own internal compliance efforts, have
required and will continue to require capital expenditures and higher operating
costs. Normal spending for environmental compliance, including those associated
with waste minimization and pollution prevention programs, amounted to
approximately $25 million in both 1993 and 1992 including approximately $12
million for capital equipment in each year. Spending for environmental
compliance is anticipated to be in the same range in 1994.

25
<PAGE> 14
MANAGEMENTS'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION

The Company is a party to various governmental and private environmental
actions associated with current and former manufacturing sites and waste
disposal sites, including some sites that are on the Environmental Protection
Agency's Superfund National Priority List. In most instances, the Company has
been viewed as a de minimis contributor and has not expended any significant
amounts for remediation of these sites. Future environmental compliance and
remediation costs are, at best, difficult to quantify with reasonable
assurance. This is due to many factors including the speculative nature of
remediation methods and costs, conflicting and imprecise data regarding the
nature and extent of waste, the number of other parties involved, and changing
governmental regulations. Based upon the information currently available,
management believes that adequate provisions have been made in the financial
statements and future costs will not have a materially adverse impact on the
Company's consolidated financial position.

The Company has settled in principle for an immaterial amount two lawsuits and
one claim relating to groundwater containing EDB, a soil fumigant which was
approved by governmental agencies until banned by the U.S. government in 1983.
The Company is actively defending itself in two remaining lawsuits in
California which are considerably smaller in scope than the recently settled
matters. Management does not believe they will result in material financial
consequences to the Company.

In 1993, the Company made downward revisions of both the discount rate and the
salary rate assumptions used in determining the actuarial present value of the
projected benefit obligation to be consistent with prevailing market
conditions. These changes will result in pension costs increasing by
approximately $1 million after taxes in 1994.

Inflation has not been a significant factor for the Company over the last
several years. Management believes that inflation will continue to be moderate
over the next several years and can be offset through a combination of price
increases and productivity improvements.

Statement of Financial Accounting Standards Board No. 112, "Employers
Accounting for Postemployment Benefits" will be adopted by the Company in 1994
as required. Implementation of this standard will result in an after-tax charge
of approximately $1 million.

With the Company's strong balance sheet, substantial free cash flow, and access
to low-cost external financing, the Company is well-positioned to capitalize on
opportunities that may arise in 1994.

<TABLE>
<CAPTION>
Cash Dividends Paid
(in dollars)
1993 1992
<S> <C> <C>
1st Quarter .08 .07
2nd Quarter .085 .075
3rd Quarter .085 .075
4th Quarter .09 .08
</TABLE>

Cash dividends paid per share of common stock of Great Lakes Chemical
Corporation, restated to reflect the 100 percent stock dividend on January 30,
1992, and October 31, 1989.

<TABLE>
<CAPTION>
Stock Price Data
(in dollars)
1993
Low High
<S> <C> <C>
1st Quarter 66 3/4 81 1/4
2nd Quarter 65 1/2 84
3rd Quarter 64 1/2 72 5/8
4th Quarter 70 3/4 79 1/4
Year-End Close 74 5/8
</TABLE>

<TABLE>
<CAPTION>
1992
Low High
<S> <C> <C>
1st Quarter 50 1/4 62 7/8
2nd Quarter 51 5/8 71 3/8
3rd Quarter 56 1/2 71
4th Quarter 63 70 1/2
Year-End Close 69 1/4
</TABLE>

Historical market price ranges by year for the past ten years contained in this
report, in dollars per share, of Great Lakes Chemical Corporation common stock
in its principal market, the New York Stock Exchange. Share prices have been
restated to reflect the 100 percent stock dividends on January 30, 1992, and
October 31, 1989.

26
<PAGE> 15

Consolidated Statements of Income and Retained Earnings

Great Lakes Chemical Corporation and Subsidiaries

(in thousands of dollars, except per share data)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1993 1992 1991
<S> <C> <C> <C>
REVENUES
Net sales............................$ 1,792,042 $ 1,496,478 $ 1,307,607
Equity in earnings of
affiliates and other income........ 35,754 41,691 40,274
--------- ---------- -----------
1,827,796 1,538,169 1,347,881
--------- ---------- -----------
COSTS AND EXPENSES
Cost of products sold................ 1,133,352 944,186 833,584
Selling, administrative
and research expenses.............. 233,909 189,282 164,156
Interest and other expenses.......... 45,512 43,679 29,820
--------- ---------- -----------
1,412,773 1,177,147 1,027,560
--------- ---------- -----------
INCOME BEFORE TAXES AND MINORITY INTEREST.. 415,023 361,022 320,321

MINORITY INTEREST IN INCOME OF SUBSIDIARIES 31,639 28,287 94,848
--------- ---------- -----------
INCOME BEFORE TAXES........................ 383,384 332,735 225,473

INCOME TAXES............................... 110,600 100,000 68,000
--------- ---------- -----------
NET INCOME................................. 272,784 232,735 157,473
--------- ---------- -----------

RETAINED EARNINGS AT BEGINNING OF YEAR..... 912,352 701,698 563,332

CASH DIVIDENDS DECLARED.................... 24,963 22,081 19,107
--------- ---------- -----------
RETAINED EARNINGS AT END OF YEAR...........$ 1,160,173 $ 912,352 $ 701,698
--------- ---------- -----------
--------- ---------- -----------
NET INCOME PER SHARE.......................$ 3.82 $ 3.27 $ 2.23

CASH DIVIDENDS DECLARED PER SHARE..........$ .35 $ .31 $ .27

AVERAGE SHARES OUTSTANDING................. 71,329,145 71,164,010 70,700,332
</TABLE>

See notes to consolidated financial statements.

27
<PAGE> 16

Consolidated Balance Sheets

Great Lakes Chemical Corporation and Subsidiaries

(in thousands of dollars)

<TABLE>
<CAPTION>
DECEMBER 31 1993 1992

ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents...... $ 179,734 $ 140,801
Accounts and notes receivable,
less allowance of $7,088 and
$4,317, respectively........... 383,129 340,922
Inventories...................... 275,062 258,009
Prepaid expenses................. 18,994 33,517
---------- ----------
TOTAL CURRENT ASSETS............. 856,919 773,249
---------- ----------
PLANT AND EQUIPMENT.................... 468,010 429,834

EXCESS OF INVESTMENT OVER NET ASSETS
OF SUBSIDIARIES ACQUIRED............ 341,079 299,635

INVESTMENTS IN AND ADVANCES TO
UNCONSOLIDATED AFFILIATES........... 185,789 186,070

OTHER ASSETS........................... 49,067 43,201
---------- ----------
$1,900,864 $1,731,989
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable.................... $ 10,253 $ 20,401
Accounts payable................. 136,957 176,806
Accrued expenses................. 92,612 71,677
Income taxes payable............. 109,746 112,246
Dividends payable................ 6,415 5,713
Current portion of
long-term debt................ 11,757 44,235
---------- ----------
TOTAL CURRENT LIABILITIES........ 367,740 431,078
---------- ----------
LONG-TERM DEBT, LESS CURRENT PORTION... 61,041 45,642

OTHER NONCURRENT LIABILITIES........... 123,618 118,723

DEFERRED INCOME TAXES.................. 73,298 63,269

MINORITY INTEREST...................... 18,604 20,426

STOCKHOLDERS' EQUITY
Common stock, $1 par value,
authorized 200,000,000 shares,
issued 71,817,996 and 71,576,558
shares, respectively............ 71,818 71,576
Paid-in capital.................. 107,268 100,957
Retained earnings................ 1,160,173 912,352
Cumulative translation
adjustment...................... (54,563) (29,441)
Less treasury stock, at cost,
543,200 and 166,100 shares,
respectively.................... (28,133) (2,593)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY....... 1,256,563 1,052,851
---------- ----------
$1,900,864 $1,731,989
---------- ----------
---------- ----------
</TABLE>

See notes to consolidated financial statements.

<PAGE> 17

Consolidated Statements of Cash Flows

Great Lakes Chemical Corporation and Subsidiaries

(in thousands of dollars)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1993 1992 1991

OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income............................ $272,784 $232,735 $157,473
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion............ 62,475 58,433 49,776
Amortization of intangible assets..... 27,541 16,450 14,041
Deferred income taxes................. (3,000) 3,000 5,400
Unremitted earnings of affiliates..... (4,348) (5,374) (10,191)
Gain on sale of assets................ (4,418) 114 (686)
Other................................. 2,792 (4,609) 3,259
Change in operating assets and
liabilities, net of effects
from business combinations:
Accounts receivable................... (33,281) (4,454) (1,605)
Inventories........................... 6,670 3,484 (18,436)
Other current assets.................. 2,042 (9,265) (2,353)
Accounts payable and accrued
expenses............................ (51,048) (12,197) (8,109)
Income taxes and other current
liabilities......................... 21,765 42,257 13,261
-------- -------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES... 299,974 320,574 201,830

INVESTING ACTIVITIES
Plant and equipment additions......... (79,270) (69,368) (71,243)
Business combinations, net of cash
acquired............................ (89,827) (204,087) (44,119)
Use of time deposit to fund
acquisition......................... -- (114,000) (125,000)
Proceeds from sale of assets.......... 14,024 480 6,669
Other................................. (8,449) 9,161 822
--------- --------- ---------
NET CASH USED IN INVESTING ACTIVITIES....... (163,522) (149,814) (232,871)

FINANCING ACTIVITIES
Net repayment and borrowings under
short-term credit lines............. (11,941) 4,256 12,977
Proceeds from long-term borrowings.... 15,234 9,047 13,773
Net increase (decrease) in commercial paper and
other long-term obligations.......... (49,995) (92,958) 24,371
Payments of other noncurrent
liabilities.......................... (4,015) (5,640) (9,313)
Minority interest..................... (822) 6,301 11,837
Proceeds from stock options
exercised............................ 3,203 2,873 4,187
Cash dividends declared............... (24,963) (22,081) (19,107)
Repurchase of common stock............ (25,540) -- --
-------- ------- -------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES................................ (98,839) (98,202) 38,725

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS...................... 1,320 (12,728) 12,695
------ ------- ------
INCREASE IN CASH AND CASH EQUIVALENTS....... 38,933 59,830 20,379

CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR................................... 140,801 80,971 60,592
------- ------ ------
CASH AND CASH EQUIVALENTS AT END
OF YEAR................................... $179,734 $140,801 $ 80,971
-------- -------- --------
-------- -------- --------
</TABLE>

See notes to consolidated financial statements. Parentheses indicate decrease
in cash and cash equivalents.

29
<PAGE> 18

Notes to Consolidated Financial Statements

ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include all subsidiaries of the Company
after elimination of all significant intercompany accounts and transactions.
Investments in less than majority-owned companies in which the Company has the
ability to exercise significant influence over operating and financial policies
of the investees are recorded at cost, plus equity in their undistributed
earnings since acquisition.

CASH EQUIVALENTS

The Company considers investment securities with maturities of three months or
less, when purchased, to be cash equivalents.

INVENTORIES

Approximately 84 percent of inventories are stated at the lower of cost
(first-in, first-out method) or market. Finished products inventories of QO
Chemicals, Inc., are stated at the lower of cost (last-in, first-out method) or
market.

PLANT AND EQUIPMENT

Plant and equipment are stated at cost. Depreciation is provided
over the estimated useful lives of the assets using the straight-line,
declining-balance and unit-of-production methods. The costs of gas wells,
leases and royalty interests are amortized by the unit-of-production method
based upon estimated recoverable reserves and annual volumes of production.

EXCESS OF INVESTMENT OVER NET ASSETS OF
SUBSIDIARIES ACQUIRED

Excess of investment over net assets of subsidiaries acquired is amortized over
periods of eight to 40 years. As of December 31, 1993 and 1992, accumulated
amortization was $43,242,000 and $25,272,000, respectively.

INCOME TAXES

Income taxes are provided on the portion of the income of unconsolidated
affiliates that is expected to be remitted to the parent company and be
taxable.

RETIREMENT PLANS

Noncontributory defined benefit pension plans cover substantially
all employees located in the United States, and contributory defined benefit
plans cover substantially all employees in the United Kingdom. Accrued pension
costs of qualified plans are funded. Pension contributions are computed
actuarially under the projected unit credit cost method and include normal
costs and amortization of prior service costs over approximately 30 years.

SHARE DATA

Net income per share is computed on the weighted average number of shares
outstanding for all periods presented. The effect on net income per share
resulting from the assumed issuance of shares reserved for stock options is not
material.

ACQUISITIONS

In 1993 the Company completed four acquisitions described below at a total cost
of $72,000,000, including $10,000,000 in future payments to be made over four
years. The excess of purchase cost over the net assets acquired amounted to
approximately $30,000,000.

Two acquisitions were completed in 1993 that strengthened the Company's
position in the recreational water treatment market. On January 4, 1993, the
Company completed the purchase of Bayrol Chemische Fabrik GmbH, (Bayrol).
Bayrol's headquarters and manufacturing plants are in Munich, Germany, and it
maintains sales and distribution centers in France and Spain. On May 3, 1993,
the Company acquired Aqua Chem, a supplier of swimming pool and spa chemicals
to mass merchants in the United States.

On January 13, 1993, the Company completed the purchase of Four Seasons
Industrial Services, Inc., and two associated companies. Located at Greensboro,
North Carolina, Four Seasons provides environmental remediation, consulting and
on-site treatment services to customers in the southeastern United States.

30
<PAGE> 19
Great Lakes Chemical Corporation and Subsidiaries

On June 23, 1993, the Company acquired Chemische Werke LOWI GmbH & Company, a
German-based manufacturer of antioxidants and UV absorbers, to complement the
Company's worldwide plastics additives business.

On October 2, 1992, the Company acquired all the outstanding shares of Societe
Francaise d'Organo-Synthese (GLCF), a specialty chemicals subsidiary of
Rhone-Poulenc Chemie. The purchase price consisted of approximately $55,000,000
in cash at closing and annual cash payments for a period of five years totaling
approximately $9,000,000. The excess of purchase price over the book value of
net assets acquired amounted to approximately $12,000,000. GLCF, headquartered
near Paris with manufacturing facilities in Catenoy and Persan, France,
produces polymer additives and specialty polymers for the ink and coatings
industries.

On March 16, 1992, the Company completed its purchase of Shell U.K. Limited's
(Shell) 36.67 percent interest in Octel Associates and The Associated Octel
Company, Limited. Together with the Company's previous acquisition of 51.15
percent on May 18, 1989, its total interest in Octel is 87.82 percent. The
purchase agreement had a July 1, 1991, effective date but closing was delayed
pending resolution of various partnership issues. The Company has included the
additional earnings from Octel effective January 1, 1992. At closing the
Company paid Shell approximately $138,000,000 plus interest from July 1, 1991.
The Company received from Shell approximately $46,000,000 plus interest
representing Shell's share of partnership distributions since July 1, 1991. The
agreement further provided that the Company compensate Shell for the United
Kingdom income tax liability on the partnership profits attributable to Shell's
interest in Octel from July 1, 1991, to closing. The excess of purchase price
over the book value of net assets acquired was approximately $21,000,000
including purchase accounting adjustments.

The Company's May 18, 1989, acquisition agreement for Octel with three major
oil companies provides for profit participation payments for specified periods
of time after the date of acquisition. Such profit participation is treated as
an adjustment to the purchase price. These payments amounted to approximately
$36,000,000 in 1993 and to approximately $133,000,000 since acquisition.

During 1992, the Company also acquired, in separate transactions with an
aggregate cost of approximately $41,000,000 in cash, all the outstanding shares
of Ward Blenkinsop and Company, Limited, a fine chemical manufacturing business
near Manchester, England; a 78 percent ownership in Chemol RT, the former
state-owned chemical trading company of Hungary, headquartered in Budapest; and
a 100 percent interest in Octel Kuhlmann, the French fuel additives
manufacturing facility which had previously been a 50 percent owned affiliate.
The excess of purchase price over the book value of net assets acquired totaled
approximately $7,000,000.

All acquisitions have been accounted for as purchases and the results of
operations of the acquired businesses are included in the consolidated
financial statements from the dates of acquisition. The following represents
the unaudited proforma results of operations as if the above-noted business
combinations had occurred at the beginning of the respective year in which the
companies were acquired as well as at the beginning of the immediately
preceding year:

<TABLE>
<CAPTION>
(in thousands, except earnings per share)
YEAR ENDED DECEMBER 31 1993 1992 1991
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales ........... $1,821,500 $1,848,600 $1,649,500
Net income .......... $ 274,000 $ 236,900 $ 201,400
Earnings per
share ............ $ 3.84 $ 3.33 $ 2.85
</TABLE>

The proforma results do not purport to present the Company's actual operating
results had the acquisitions been made at the beginning of 1993, 1992 and 1991,
or the results which may be expected in the future.

31
<PAGE> 20
Notes to Consolidated Financial Statements
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following:

<TABLE>
<CAPTION>
(in thousands)
DECEMBER 31 1993 1992
- ---------------------------------------------------------------------
<S> <C> <C>
Cash .............................. $ 28,415 $ 25,925
Time deposits....................... 151,319 114,876
--------- --------
$ 179,734 $140,801
--------- --------
--------- --------
</TABLE>

INVENTORIES
The major components of inventories are as follows:

<TABLE>
<CAPTION>
(in thousands)
DECEMBER 31 1993 1992
- ----------------------------------------------------------------------
<S> <C> <C>
Finished products...... $190,867 $178,449
Raw materials.......... 54,333 53,406
Supplies............... 29,862 26,154
-------- --------
$275,062 $258,009
-------- --------
-------- --------
</TABLE>

Cost of applicable inventories using the last-in, first-out valuation method
approximates current cost at December 31, 1993 and 1992.

PLANT AND EQUIPMENT
Plant and equipment consist of the following:

<TABLE>
<CAPTION>
(in thousands)
DECEMBER 31 1993 1992
- -----------------------------------------------------------------------------
<S> <C> <C>
Land........................................$ 14,200 $ 11,831
Buildings and land improvements............. 86,293 66,794
Equipment and leasehold improvements........ 674,354 620,228
Gas wells, leases and royalty interests..... 4,670 4,541
Construction in progress (estimated
additional cost to complete at
December 31, 1993, $20,000)........... 51,267 34,676
-------- --------
830,784 738,070
Less allowances for depreciation,
depletion and amortization ........... 362,774 308,236
-------- --------
$468,010 $429,834
-------- --------
-------- --------
</TABLE>

The estimated useful lives for purposes of computing depreciation are:
buildings and land improvements, 7-40 years; equipment and leasehold
improvements, 2-17 years.

Maintenance and repairs charged to costs and expenses were $81,420,000,
$72,070,000 and $65,978,000 for 1993, 1992 and 1991, respectively.

Rent expense for all operating leases amounted to $16,138,000, $12,248,000 and
$11,110,000 for 1993, 1992 and 1991, respectively.

NOTES PAYABLE
Data concerning borrowings are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Amounts borrowed (in thousands):
Maximum during the year........ $31,082 $25,487 $20,473
Average for the year........... $17,734 $16,606 $ 6,431
Weighted average interest rates:
At December 31................. 8.5% 9.4% 10.1%
On borrowings during the year.. 7.6% 9.4% 8.6%
</TABLE>

The Company has no confirmed short-term credit lines, but has available for its
use substantial non-confirmed credit lines.

LONG-TERM DEBT
Long-term debt is summarized as follows:

<TABLE>
<CAPTION>
(in thousands)
DECEMBER 31 1993 1992
- ----------------------------------------------------------------------------
<S> <C> <C>
Commercial paper, at average year-end
interest rate of 3.7%................... $ -- $36,643
Industrial development bonds, at fixed and
variable interest rates from 3.3% to 7%
at December 31, 1993 (weighted average
3.7%), with maturities to May 2025 ..... 22,335 24,350
Other......................................... 50,463 28,884
------- -------
72,798 89,877
Less current portion ......................... 11,757 44,235
------- -------
$61,041 $45,642
------- -------
------- -------
</TABLE>

In early 1994, the Company entered into a three-year $190,000,000 revolving
credit facility with seven banks which serves as a backup for the Company's
commercial paper program. The facility replaced a $180,000,000 credit agreement
that would have expired in May 1994. The agreement provides various interest
rate options, including the banks' prime interest rate, and contains
restrictive financial covenants, including a maximum leverage ratio and an
interest coverage rate. The Company's commercial paper is rated A-1 by Standard
and Poor's and P-1 by Moody's.

The Company has on file a shelf registration with the Securities and Exchange
Commission for $200,000,000 of debt securities. Once issued, the security
proceeds will be utilized by the Company as required from time to time for
acquisitions and other corporate purposes.

Long-term debt matures as follows: 1994, $11,757,000; 1995, $7,274,000; 1996,
$6,286,000; 1997, $6,476,000; and 1998, $6,833,000.

32
<PAGE> 21
Great Lakes Chemical Corporation and Subsidiaries

During 1993, 1992 and 1991, interest costs were $8,174,000, $12,383,000 and
$12,291,000, respectively, of which $928,000, $1,023,000 and $1,814,000,
respectively, were capitalized as additional costs of equipment and leasehold
improvements in connection with the expansion of physical facilities. In these
years, interest payments were $8,167,000, $11,946,000 and $12,254,000,
respectively.

OTHER NONCURRENT LIABILITIES

Other noncurrent liabilities consist of the following:

<TABLE>
<CAPTION>
(in thousands)
DECEMBER 31 1993 1992
- -------------------------------------------------------------------
<S> <C> <C>
Future estimated closing costs of
Octel's manufacturing facilities .......... $ 48,646 $ 45,060
Deferred revenue .......................... 62,433 62,563
Other ..................................... 12,539 11,100
--------- ---------
$ 123,618 $ 118,723
--------- ---------
--------- ---------
</TABLE>

Deferred revenue represents funds provided as an advance partial payment for
product to be delivered under the terms of a long-term supply contract with a
major customer. The Company recognizes the deferred revenue using a
units-of-production method.

INCOME TAXES
Effective January 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by
Statement of Financial Accounting Standards No. 109, ``Accounting for Income
Taxes.'' The cumulative effect of adopting this Statement as of January 1,
1993, was an increase in net income of $3,000,000.

The following is a summary of domestic and foreign income before income taxes,
the components of the provisions for income taxes and deferred income taxes,
and a reconciliation of the U.S. statutory income tax rate to the effective
income tax rate. The 1993 tax data is presented on the liability method. The
1992 and 1991 data is on the deferred method.

<TABLE>
<CAPTION>
Income Before Taxes:
(in thousands)

YEAR ENDED DECEMBER 31 1993 1992 1991
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic ........................ $148,078 $127,745 $104,787
Foreign ......................... 235,306 204,990 120,686
------- ------- -------
$383,384 $332,735 $225,473
------- ------- -------
------- ------- -------
</TABLE>

<TABLE>
<CAPTION>
Provisions for Income Taxes:
(in thousands)

YEAR ENDED DECEMBER 31 1993 1992 1991
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal ............. $ 39,600 $ 34,250 $ 20,782
State ............... 5,600 4,700 5,000
Foreign ............. 68,400 58,050 36,818
------- ------ ------
113,600 97,000 62,600
------- ------ ------
Deferred:
Domestic............. 1,300 1,200 6,700
Foreign ............. (4,300) 1,800 (1,300)
------- ------ ------
(3,000) 3,000 5,400
------- ------ ------
$ 110,600 $ 100,000 $ 68,000
------- ------- ------
------- ------- ------

</TABLE>

<TABLE>
<CAPTION>
Provisions for Deferred Income Taxes:
(in thousands)

YEAR ENDED DECEMBER 31 1993 1992 1991
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Depreciation ............... $ 1,735 $ 4,196 $4,063
Other ...................... (4,735) (1,196) 1,337
----- ----- -----
$(3,000) $ 3,000 $5,400
----- ----- -----
----- ----- -----

</TABLE>

<TABLE>
<CAPTION>
Effective Income Tax Rates Reconciliation:

YEAR ENDED DECEMBER 31 1993 1992 1991
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. statutory income tax rate ....... 35.0% 34.0% 34.0%
Increase (decrease) resulting from:
SFAS 109............................ (0.8) -- --
Reversal of prior provisions........ (2.3) -- --
Other............................... (3.1) (3.9) (3.8)
---- ---- ----
Effective income tax rate............. 28.8% 30.1% 30.2%
---- ---- ----
---- ---- ----

</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes.

<TABLE>
<CAPTION>
Components of Deferred Tax Assets and Liabilities:

(in thousands)
DECEMBER 31 1993
- --------------------------------------------------------
<S> <C>
Deferred tax assets ...................... $15,339
------
------
Deferred tax liabilities:
Depreciation ........................ $50,700
Foreign liabilities pending
settlements .......................... 20,000
Undistributed affiliate
earnings............................. 9,665
Other ................................ 4,632
-----
$84,997
------
------
</TABLE>

Cash payments for income taxes were $105,169,000, $55,988,000 and
$42,607,000 in 1993, 1992 and 1991, respectively.

33
<PAGE> 22
Notes to Consolidated Financial Statements
STOCKHOLDERS' EQUITY
In May 1993, the Company's stockholders approved an increase in the authorized
shares of common stock from 100,000,000 to 200,000,000. Changes in common
stock and paid-in capital accounts are summarized as follows:

<TABLE>
<CAPTION>
Common Stock Paid-In
(dollar amounts in thousands) Shares Amount Capital
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1990... 35,304,625 $35,305 $119,821
---------- ------ -------
---------- ------ -------

1991 Transactions:
Exercise of stock options,
net of shares exchanged...... 240,420 240 3,947
Tax benefit from early
disposition of stock
by optionees................. - - 3,347
100 percent stock dividend..... 35,545,045 35,545 (35,545)
---------- ------ -------
Balance at
December 31, 1991.............. 71,090,090 $71,090 $ 91,570
---------- ------ -------
---------- ------ -------

1992 Transactions:
Exercise of stock options,
net of shares exchanged...... 486,468 486 2,387
Tax benefit from early
disposition of stock
by optionees.................. - - 7,000
---------- ------ -------
Balance at
December 31, 1992.............. 71,576,558 $71,576 $100,957
---------- ------ -------
---------- ------ -------

1993 Transactions:
Exercise of stock options,
net of shares exchanged 241,438 242 2,961
Tax benefit from early
disposition of stock
by optionees................. - - 3,350
---------- ------ -------
Balance at
December 31, 1993.............. 71,817,996 $71,818 $107,268
---------- ------ -------
---------- ------ -------

</TABLE>

The Company has a Stockholder Rights Plan. Under the Plan, the stockholders
have received a right (the "Right") for each outstanding share of common stock
of the Company. Each Right entitles the holder to purchase from the Company at
an exercise price of $92.50 (after adjustment pursuant to the Plan), one unit
consisting initially of one-tenth of a share of the Company's common stock and
a note in a principal amount equal to nine-tenths of the market price of a
share of the Company's common stock on the date of exercise.

The Right becomes exercisable and transferable apart from the common stock only
if a person or group acquires, obtains a right to acquire, or announces and/or
commences a tender offer to acquire ("Acquiring Holder") beneficial ownership
of 15 percent or more of the Company's outstanding common stock. Under certain
conditions, the Right may be redeemed by the Company at a price of $.0025 per
Right (after adjustment pursuant to the Plan) prior to their expiration on
September 22, 1999.

If the Right becomes exercisable and is not redeemed, the holder
of each Right, except any Acquiring Holder, is entitled to purchase, at the
Right's then-current exercise price, the number of Great Lakes common shares
having a market value equal to twice the Right's exercise price.

If the Company is acquired in a merger or other business combination, and the
Right has not been redeemed, the holder of each Right is entitled to purchase,
at the Right's then-current exercise price, that number of the acquiring
company's common shares having a market value equal to twice the Right's
exercise price.

During 1993, the Company acquired 377,100 shares of its stock for a total cost
of $25,540,000.

Changes in the cumulative translation adjustment account are
as follows:

<TABLE>
<CAPTION>
(in thousands)
Year Ended December 31 1993 1992 1991
<S> <C> <C> <C>
Balance at beginning of year...... $(29,441) $ 38,579 $28,293
Translation adjustments and
gains and losses from
hedging transactions.............. (25,122) (64,720) 10,746
Allocated income taxes............ - (3,300) (460)
------ ------ ------
Balance at end of year.............. $(54,563) $(29,441) $38,579
------ ------ ------
------ ------ ------

</TABLE>

The 1993 and 1992 decreases in the cumulative translation adjustment account
were principally due to the effect of the much stronger U.S. dollar in relation
to the currencies of the various foreign countries in which the Company
operates, particularly the pound sterling.

STOCK OPTIONS
In May 1993, the stockholders adopted the 1993 Employee Stock Compensation Plan
for officers and other key employees, authorizing the issuance of 2,000,000
shares of the Company's common stock upon exercise of incentive stock options,
non-qualified stock options or other stock-based awards. The Plan generally
replaces the 1984 Plan which expires in May 1994. Under the Plans, options are
granted at the market value at date of grant, may be exercisable over periods
of one to three years after grant and expire ten years from the date of grant.
As of December 31, 1993, no options had been issued under the 1993 Plan.

34
<PAGE> 23
Great Lakes Chemical Corporation and Subsidiaries

<TABLE>
<CAPTION>
The following summarizes the changes in options under the Plans for the years 1992 and 1993:

Shares Option
Under Option Prices
- ------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at December 31, 1991 2,232,824 $3.13 to $53.50
--------- ---------------
--------- ---------------
1992 Transactions:
Granted....................... 227,400 51.38 to 69.25
Exercised..................... (525,842) 3.13 to 41.25
Terminated.................... (10,900) 4.45 to 53.50
--------- ---------------
Outstanding at December 31, 1992 1,923,482 5.88 to 69.25
--------- ---------------
--------- ---------------

1993 Transactions:
Granted....................... 227,100 67.63 to 78.25
Exercised..................... (258,387) 5.88 to 61.88
Terminated.................... (8,632) 5.88 to 78.25
--------- ---------------
Outstanding at December 31, 1993 1,883,563 $6.89 to $78.25
--------- ---------------
--------- ---------------

Currently Exercisable........... 1,513,286 $6.89 to $69.25
--------- ---------------
--------- ---------------
</TABLE>

Options outstanding at December 31, 1993, have an average option price of
$32.62 per share and expire from March 13, 1994, to December 8, 2003. A total
of 2,033,432 shares are reserved for future grants as of December 31, 1993.

RETIREMENT PLANS

The Company maintains several noncontributory defined benefit
pension plans covering substantially all U.S. employees. Benefits are based on
salary and years of credited service reduced by social security benefits
according to a plan formula. Normal retirement age is 65, but provisions are
made for early retirement. The Company's funding policy is to contribute
amounts to the plans to meet the funding requirements of federal laws and
regulations, as determined by the Company's actuary. The plans' assets are
invested by an insurance company, two banks, and one investment management
company in various commingled and segregated funds holding equities, bonds,
guaranteed income contracts and cash or cash equivalents.

The Company maintains two contributory defined benefit pension plans covering
substantially all United Kingdom employees. Benefits are based on final salary
and years of credited service, reduced by social security benefits according to
a plan formula. Normal retirement age is 65, but provisions are made for early
retirement. The Company's funding policy is to contribute amounts to the plans
to cover service costs to date as recommended by the Company's actuary. The
plans' assets are invested by two investment management companies in funds
holding U.K. and overseas equities, U.K. and overseas fixed interest
securities, index linked securities, property unit trusts and cash or cash
equivalents.

A summary of the components of net periodic pension cost for U.S.
and U.K. pension plans is as follows:
<TABLE>
<CAPTION>
(in thousands)

YEAR ENDED DECEMBER 31 1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost................... $ 14,160 $ 14,694 $ 13,474
Interest cost on projected
benefit obligation........... 34,590 37,246 33,626
Actual return on plan asset.... (119,219) (10,204) (89,493)
Net amortization and deferral.. 79,522 (33,709) 48,791
-------- -------- --------
Net pension cost............... $ 9,053 $ 8,027 $ 6,398
-------- -------- --------
-------- -------- --------
</TABLE>

The funded status and accrued pension cost for the U.S. pension plans are as
follows:

<TABLE>
<CAPTION>
(in thousands)
YEAR ENDED DECEMBER 31 1993 1992 1991
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Actuarial present value of
accumulated plan benefits:
Vested....................... $ 37,447 $ 26,168 $ 18,681
Non-vested................... 2,345 3,378 2,945
-------- ------- --------
Total accumulated benefit
obligation .................... 39,792 29,546 21,626
Additional amounts related to
projected salary increases..... 18,549 14,781 13,722
-------- ------- --------
Total projected benefit
obligation..................... 58,341 44,327 35,348
Plan assets at fair value....... 43,982 36,470 31,243
-------- ------- --------
Projected benefit obligation
in excess of plan assets....... 14,359 7,857 4,105
Unrecognized net (loss) gain.... (5,605) (279) 2,220
Unrecognized prior service cost. (13) 29 33
Unrecognized obligation at
January 1, 1987,
net of amortization.......... (1,834) (2,025) (1,086)
-------- ------- --------
Accrued pension cost............ $ 6,907 $ 5,582 $ 5,272
-------- ------- --------
-------- ------- --------
</TABLE>

35
<PAGE> 24
Notes to Consolidated Financial Statements
The funded status and prepaid pension cost for the U.K. pension plans are as
follows:

<TABLE>
<CAPTION>
(in thousands)
DECEMBER 31 1993 1992 1991
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Actuarial present value of
accumulated plan benefits,
all vested....................... $353,963 $322,989 $367,455
Additional amounts related to
projected salary increases 34,997 25,519 28,237
-------- -------- --------
Total projected benefit obligation 388,960 348,508 395,692
Plan assets at fair value ........ 448,028 352,887 428,978
-------- -------- --------
Plan assets in excess of projected
benefit obligation................ 59,068 4,379 33,286
Unrecognized net (gain) loss...... (32,487) 24,160 11,407
Unrecognized prior service cost... 10,928 12,080 16,082
-------- -------- --------
Prepaid pension cost.............. $ 37,509 $ 40,619 $ 60,775
-------- -------- --------
-------- -------- --------
</TABLE>

Assumptions used in determining the actuarial present value of the projected
benefit obligations are set forth below. In 1993, the weighted average discount
rate and the rates of increase in compensation level assumptions were revised
downward for all plans to be consistent with prevailing market conditions. The
changes resulted in increasing the projected benefit obligation of the U.S.
plans by approximately $5,000,000.

<TABLE>
<S> <C>
Weighted average discount rates 7.5% to 9.0%
Rates of increase in compensation levels 4.8% to 7.5%
Expected long-term return on assets 9.0% to 10.25%
</TABLE>

Supplemental deferred benefit pension plans covering certain officers and
directors are also maintained. These plans are non-qualified and unfunded. The
pension liability associated with these plans is accrued using the same
actuarial methods and assumptions as those used in the qualified U.S. plans.
The cost for these plans which is included in the net pension cost shown above
amounted to $900,000 for 1993 and $200,000 for both 1992 and 1991. The unfunded
projected benefit obligation, which is included in the accrued pension cost
above, amounted to $4,930,000 in 1993 and approximately $1,500,000 for 1992 and
1991. Benefits under these plans will be paid from general Company funds.

The Company provides no significant postretirement benefits other than
pensions.

RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses were approximately $55,152,000, $46,579,000,
and $39,019,000 in 1993, 1992 and 1991, respectively.

INDUSTRY SEGMENTS AND FOREIGN OPERATIONS
The Company's operations consist of one dominant industry segment-chemicals
and allied products.

Net sales, income before taxes and minority interest, and identifiable assets
by geographic areas follow:

<TABLE>
<CAPTION>
(in thousands) 1993 1992 1991
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales to unaffiliated
customers:
United States...... $ 846,876 $ 763,002 $ 713,231
Foreign............ 945,166 733,476 594,376
---------- ---------- ----------
Total.............. $1,792,042 $1,496,478 $1,307,607
---------- ---------- ----------
---------- ---------- ----------

Intercompany sales between
geographic areas:
United States...... $ 103,151 $ 98,408 $ 88,411
Foreign............ 4,581 905 583
---------- ---------- ----------
Total.............. $ 107,732 $ 99,313 $ 88,994
---------- ---------- ----------
---------- ---------- ----------

Income before taxes and
minority interest:
United States...... $ 144,722 $ 126,827 $ 112,183
Foreign............ 270,337 232,286 207,046
Earnings of
affiliates ..... 5,535 9,738 10,503
Corporate interest
expense......... (5,571) (7,829) (9,411)
---------- ---------- ----------
Total.............. $ 415,023 $ 361,022 $ 320,321
---------- ---------- ----------
---------- ---------- ----------

Identifiable assets at
year-end:
United States...... $ 922,091 $ 765,758 $ 828,748
Foreign............ 792,984 780,161 621,332
Affiliates......... 185,789 186,070 199,052
---------- ---------- ----------
Total.............. $1,900,864 $1,731,989 $1,649,132
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

Most of the Company's foreign operations are conducted by
European subsidiaries or U.S. branch offices. Sales between the United States
and its foreign operations are generally priced to recover cost plus an
appropriate markup for profit and are eliminated in the consolidated financial
statements. Identifiable assets include assets directly identified with
operations, principally: accounts receivable, inventories, and plant and
equipment, plus an allocation of cost in excess of net assets acquired.

Export sales for 1993, 1992 and 1991 amounted to approximately $167,000,000,
$172,000,000 and $162,000,000, respectively, of which 87 percent, 88 percent
and 88 percent, respectively, were outside the Western Hemisphere.

36
<PAGE> 25
Great Lakes Chemical Corporation and Subsidiaries

INVESTMENTS IN UNCONSOLIDATED AFFILIATES
Investments accounted for on the equity method as of December 31, 1993, include
Huntsman Chemical Corporation, a 40 percent owned producer of polystyrene and
compounded specialty plastics; KAO-Quaker, Co., Ltd., a 50 percent owned
Japanese marketer of furfural derivatives; and Arkansas Chemicals, Inc., a 50
percent owned bromine producer. Effective August 1, 1992, Octel acquired a 100
percent interest in Octel Kuhlmann after which it was included on a
consolidated basis. Prior to the date of acquisition, Octel's 50 percent
interest in Octel Kuhlmann had been recorded on an equity basis.

Summarized combined financial information for these unconsolidated affiliates
is as follows:

<TABLE>
<CAPTION>
(in thousands) 1993 1992 1991
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Current assets....... $318,243 $321,737 $417,418
Noncurrent assets.... 470,835 357,079 310,644
Current liabilities.. 147,430 113,106 135,137
Noncurrent liabilities 279,729 215,657 213,120
Net sales............ 820,342 759,402 798,167
Gross profit......... 123,243 120,136 127,179
Net income........... 24,468 27,139 36,270
</TABLE>

The Company's equity in earnings of unconsolidated affiliates was $10,935,000,
$15,138,000, and $15,903,000 for 1993, 1992 and 1991, respectively.
Consolidated retained earnings represented by undistributed earnings of 50
percent or less owned companies that are accounted for using the equity method
were approximately $144,000,000 at December 31, 1993.

The Huntsman investment includes costs in excess of the book value of the net
assets acquired amounting to approximately $46,000,000, less accumulated
amortization of $19,818,000 and $14,418,000 at December 31, 1993 and 1992,
respectively.

FINANCIAL INSTRUMENTS AND CONCENTRATION
OF CREDIT RISK
The carrying amounts reported in the balance sheet of cash and
cash equivalents, notes payable and long-term debt do not materially differ
from their fair value at December 31, 1993. The fair value of the Company's
debt was estimated using a discounted cash flow analysis based upon the
Companys' current incremental borrowing rates for similar borrowing
arrangements.

The Company hedges certain portions of its exposure to foreign
currency fluctuations in revenues and net foreign investments through the use
of options and forward exchange contracts. Gains and losses arising from the
use of such instruments are recorded in the income statement concurrently with
gains and losses arising from the underlying hedged transactions. At December
31, 1993, the Company had forward exchange contracts and written currency
options, generally having maturities of less than one year, to
exchange foreign currencies for U.S. dollars in the amount of
$76,000,000. Net unrealized gains/losses from hedging anticipated transactions
were not material at December 31, 1993.

The Company sells a broad range of products to a diverse group of
customers operating throughout the world. These industries generally are not
significantly affected by changes in economic or other factors. Credit limits,
ongoing credit evaluation and account monitoring procedures are utilized to
minimize the risk of loss. Collateral is generally not required.

37
<PAGE> 26
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS

Board of Directors
Great Lakes Chemical Corporation

We have audited the accompanying consolidated balance sheets of Great Lakes
Chemical Corporation and subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of income and retained earnings and cash flows
for each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Huntsman Chemical
Corporation and Arkansas Chemicals, Inc. The investment in and advances to
these unconsolidated affiliated companies represent 9 percent and 10 percent
of 1993 and 1992 consolidated assets, respectively, and the equity in their net
income represents 1 percent, 4 percent and 6 percent of the consolidated net
income for 1993, 1992 and 1991, respectively. Those statements were audited by
other auditors whose reports have been furnished to us and our opinion, insofar
as it relates to the amounts included for Huntsman Chemical Corporation and
Arkansas Chemicals, Inc., is based solely on reports of the other auditors.

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Great Lakes Chemical
Corporation and subsidiaries at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity with generally
accepted accounting principles.

ERNST & YOUNG

Indianapolis, Indiana
January 31, 1994

38
<PAGE> 27

Quarterly Results of Operations

Great Lakes Chemical Corporation and Subsidiaries

(in thousands of dollars, except per share data, unaudited)

<TABLE>
<CAPTION>
1993
Three Months Ended Mar. 31 Jun. 30 Sept. 30 Dec. 31
<S> <C> <C> <C> <C>
Revenues
Net Sales................... $430,176 $461,839 $469,656 $430,371
Equity in earnings of
affiliates and other
income.................... 6,406 8,924 6,586 13,838
-------- -------- -------- --------
436,582 470,763 476,242 444,209
-------- -------- -------- --------
Costs and Expenses
Cost of products sold....... 272,995 288,415 302,825 269,117
Selling, administrative
and research expenses..... 59,570 62,196 58,175 53,968
Interest and other
expenses.................. 7,295 14,410 9,870 13,937
-------- -------- -------- --------
339,860 365,021 370,870 337,022
-------- -------- -------- --------
Income Before Taxes and
Minority Interest......... 96,722 105,742 105,372 107,187
Minority Interest in Income
of Subsidiaries........... 7,780 8,136 8,175 7,548
-------- -------- -------- --------
Income Before Taxes......... 88,942 97,606 97,197 99,639
Income Taxes................ 24,700 27,500 28,700 29,700
-------- -------- -------- --------
Net Income.................. $ 64,242 $ 70,106 $ 68,497 $ 69,939
-------- -------- -------- --------
-------- -------- -------- --------

Net Income per Share........ $ .90 $ .98 $ .96 $ .98
-------- -------- -------- --------
-------- -------- -------- --------
<CAPTION>
1992
Three Months Ended Mar. 31 Jun. 30 Sept. 30 Dec. 31
<S> <C> <C> <C> <C>
Revenues
Net Sales................... $344,494 $381,649 $365,789 $404,546
Equity in earnings of
affiliates and other
income.................... 10,108 7,049 9,104 15,430
-------- -------- -------- --------
354,602 388,698 374,893 419,976
-------- -------- -------- --------

Costs and Expenses
Cost of Products
sold............... 217,363 242,678 226,776 257,369
Selling, administrative
and research expenses. 43,261 44,405 46,028 55,588
Interest and other
expenses............. 10,885 8,997 8,974 14,823
-------- -------- -------- --------
271,509 296,080 281,778 327,780
-------- -------- -------- --------
Income Before Taxes and
Minority Interest........... 83,093 92,618 93,115 92,196
Minority Interest in Income
of Subsidiaries.............. 6,058 7,441 7,513 7,275
-------- -------- -------- --------
Income Before Taxes............ 77,035 85,177 85,602 84,921
Income Taxes................... 24,000 26,400 25,600 24,000
-------- -------- -------- --------
Net Income..................... $ 53,035 $ 58,777 $ 60,002 $ 60,921
-------- -------- -------- --------
-------- -------- -------- --------

Net Income per Share........... $ .75 $ .83 $ .84 $ .85
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>

39
<PAGE> 28
DIFFERENCE LETTER

The following graphic material cannot be transmitted pursuant to edgar:

1. TABLE OF CONTENTS IS DESCRIBED IN GRAPHIC FORM USING GRAPH AND B/G
COLOR.

2. Below 1993 Financial Highlights shows 4 line graphics for stock price
data, earnings per share, equity per share and cash dividends
respectively.

3. Corporate profile spans over several pages showing different groups in
column format and reversed block headings.

4. Markets served is graphically displayed in checkerboard fashion using
screens, solids and reverse type to signify various market
applications.

5. Letter to shareholders including graphs for ease in reading spans over
3 pages and is displayed in various graphic forms including
typographical special design.

6. Annual report displays article in various graphic format describing
financial performance, photos, graphics, reverse type are used for
graphic presentation.

7. Several charts and graphs are presented throughout the management
discussion and analysis for marketing presentations.

8. The graphic presentation of subsidiaries and affiliates shareholders
information, directors and executive officers photos are presented in
the Annual Report to stockholders and graphically are inappropriate
for edgar presentation and format.

<PAGE> 1

Exhibit 23
Great Lakes Chemical Corporation and Subsidiaries

CONSENT OF ERNST & YOUNG INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Great Lakes Chemical Corporation of our report dated January 31, 1994,
included in the 1993 Annual Report to Shareholders of Great Lakes Chemical
Corporation.

Our audits also included the financial statement schedule of Great Lakes
Chemical Corporation listed in Item 14(a). This schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.

We also consent to the incorporation by reference in Post-Effective Amendment
Number 5 to the Registration Statement Number 2-53909 on Form S-8, dated
May 1, 1980, in Registration Statement Number 33-02069 on Form S-3 dated
December 11, 1985, in Registration Statement Number 33-02074 on Form S-8 dated
December 11, 1985, in Registration Statement Number 33-02075 on Form S-8 dated
December 11, 1985 and in Registration Statement Number 33-42477 on Form S-3
dated August 28, 1991, of our report dated January 31, 1994, with respect to the
consolidated financial statements incorporated herein by reference, and our
report included in the preceding paragraph with respect to the financial
statement schedule included in this Annual Report (Form 10-K) of Great Lakes
Chemical Corporation.

ERNST & YOUNG

Indianapolis, Indiana
March 24, 1994

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Post-Effective Amendment No. 5
to Registration Statement No. 2-53909 on Form S-8, in Registration Statement
No. 33-02069 on Form S-3, in Registration Statement Nos. 33-02074 and 33-02075
both on Form S-8, and in Registration Statement No. 33-42477 on Form S-3 of our
report dated January 31, 1994 (relating to the financial statements of Arkansas
Chemicals, Inc. not presented separately herein) appearing in the Annual Report
on Form 10-K of Great Lakes Chemical Corporation for the year ended December
31, 1993.

Deloitte & Touche

Pittsburgh, Pennsylvania
March 24, 1994

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Post-Effective Amendment No. 5
to Registration Statement No. 2-53909 on Form S-8, in Registration Statement
Nos. 33-02069 and 33-42477 both on Form S-3, and in Registration Statement Nos.
33-02074 and 33-02075 both on Form S-8 of Great Lakes Chemical Corporation of
our report dated January 26, 1994 on the consolidated financial statements of
Huntsman Chemical Corporation (not presented separately herein) appearing in
this Annual Report on Form 10-K of Great Lakes Chemical Corporation for the
year ended December 31, 1993.

Deloitte & Touche

Salt Lake City, Utah
March 24, 1994