UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 10-Q


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

For  the  quarterly  period  ended               March  31,  2002
                                                 ----------------


Commission  file  number                                I-71
                                                         ----


                              BORDEN CHEMICAL, INC.



     New  Jersey                                   13-0511250
     -----------                                   ----------
     (State  or  other  jurisdiction of           (I.R.S. Employer
     incorporation  or  organization)               Identification  No.)


                    180  East  Broad  Street,  Columbus,  OH  43215
                    -----------------------------------------------
                     (Address  of  principal  executive  offices)

                              (614)     225-4000
                              ------------------
            (Registrant's  telephone  number,  including  area  code)

                              Not  Applicable
                              ---------------
             (Former  name,  former  address  and  former  fiscal  year,
                       if  changed  since  last  report.)


Indicate  by check mark whether the registrant(1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports)  and  (2)  has  been  subject  to such filing
requirements  for  the  past  90  days.
Yes  X No__
     -

Number  of  shares of common stock, $0.01 par value, outstanding as of the close
of  business  on  May  14,  2002:  201,003,883




























                              BORDEN CHEMICAL, INC.


INTRODUCTION

This Quarterly Report on Form 10-Q includes the Condensed Consolidated Financial
Statements  of  Borden  Chemical,  Inc. ("the Company"), as well as the separate
Condensed Consolidated Financial Statements of Borden Foods Holdings Corporation
("Foods").  The  Company  and  Foods  are  controlled  by  BW  Holdings,  LLC.
("BWHLLC").

Foods'  Condensed  Consolidated  Financial Statements are included in Part II of
this  Quarterly  Report  on Form 10-Q in accordance with rule 3-10 of Regulation
S-X.  Foods  is  a  guarantor  of  the  Company's credit facility and all of the
Company's  outstanding publicly held debt.  The Condensed Consolidated Financial
Statements  for  Foods  are  prepared  on  a  purchase  accounting  basis.






































































                              BORDEN CHEMICAL, INC.

                                      INDEX







                                                                                            
PART I - FINANCIAL INFORMATION

ITEM 1.  BORDEN CHEMICAL, INC. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         Condensed Consolidated Statements of Operations and Comprehensive Income,
              three months ended March 31, 2002 and 2001                                                     4
         Condensed Consolidated Balance Sheets, March 31, 2002 and December 31, 2001.                        6
         Condensed Consolidated Statements of Cash Flows, three months ended March 31, 2002 and 2001.        8
         Condensed Consolidated Statement of Shareholders' Deficit, three months ended March 31, 2002       10
         Notes to Condensed Consolidated Financial Statements                                               11


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS               18


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS                                                                                   23

ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS                                                            23

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                 23

ITEM 6. EXHIBITS, GUARANTOR FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                           23























































- -----------------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
AND  COMPREHENSIVE  INCOME  (UNAUDITED)
BORDEN  CHEMICAL,  INC.

                                                             Three months ended March 31,
(In thousands, except per share data)                          2002                 2001
- -----------------------------------------------------------------------------------------------------
                                                                                  
     Net sales                                           $    296,091        $      361,097
     Cost of goods sold                                       222,471               286,301
                                                            ----------            ------------

     Gross margin                                              73,620                74,796
                                                            ----------            ------------

     Distribution expense                                      14,570                16,835
     Marketing expense                                         10,434                 9,891
     General & administrative expense                          26,930                26,596
     Gain on sale of assets                                      -                   (2,588)
     Business realignment expense (income)                      4,659                (4,056)
     Other operating expense                                    1,935                 3,134
                                                            ----------            ------------

     Operating income                                          15,092                24,984

     Interest expense                                          11,787                13,084
     Affiliated interest expense, net of affiliated interest
       income of $455 and $383, respectively                      267                 5,055
     Other non-operating income                                (2,288)                 (445)
                                                            ----------            ------------

     Income from continuing operations
       before income tax                                        5,326                 7,290
     Income tax expense                                         7,213                 6,915
                                                             ----------           -----------

     (Loss) income from continuing operations                  (1,887)                  375
                                                            ----------            ------------

     Discontinued operations:
       Income from operations, net of tax                        -                      470
                                                            ----------            ------------

     (Loss) income before cumulative effect of change in
       accounting principle                                    (1,887)                  845

     Cumulative effect of change in accounting principle      (29,825)                   -
                                                            ----------           ------------

     Net (loss) income                                        (31,712)                  845

     Preferred stock dividends     .                              -                 (18,431)
                                                            ----------           ------------

     Net loss applicable to common stock                 $    (31,712)      $       (17,586)
                                                            ===========          ===========

     Comprehensive Income                                $    (34,283)      $       (13,221)
                                                            ===========          ===========





See  Notes  to  Condensed  Consolidated  Financial  Statements



























- -------------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
AND  COMPREHENSIVE  INCOME  (UNAUDITED)  (CONTINUED)
BORDEN  CHEMICAL,  INC.


                                                                   Three months ended March 31,
(In thousands, except per share data)                                2002                 2001
- -------------------------------------------------------------------------------------------------
                                                                                  
  Basic and Diluted Per Share Data
- ------------------------------------

  (Loss) income from continuing operations                  $     (0.01)              $      -
  Discontinued operations:
       Income from operations, net of tax                           -                        -
                                                                 -----------         ------------

  (Loss) income before cumulative effect of change in
       accounting principle                                       (0.01)                     -

  Cumulative effect of change in accounting principle.            (0.15)                     -
                                                                 -----------         ------------

  Net (loss) income                                               (0.16)                     -
  Preferred stock dividends                                         -                      (0.09)
                                                                 -----------         ------------

  Net loss applicable to common stock                       $     (0.16)              $    (0.09)
                                                                 ===========         =============

  Dividends per common share                                $       -                 $     0.06
  Dividends per preferred share                             $       -                 $     0.75

  Average number of common shares outstanding
       during the period                                        199,158                  198,975
- -------------------------------------------------------------------------------------------------
See  Notes  to  Condensed  Consolidated  Financial  Statements












































- ----------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  BALANCE  SHEETS  (UNAUDITED)
BORDEN  CHEMICAL,  INC.

(In  thousands)

                                                             March 31,           December 31,
ASSETS                                                         2002                  2001
- ----------------------------------------------------------------------------------------------
                                                                                
CURRENT ASSETS
  Cash and equivalents                                 $     28,235           $    24,632
  Accounts receivable (less allowance for doubtful
       accounts of $17,780 in 2002 and $16,659 in 2001)     170,895               164,137
  Accounts receivable from affiliates                        13,198                 7,077
  Inventories:
       Finished and in-process goods                         41,954                54,184
       Raw materials and supplies                            35,786                38,050
  Deferred income taxes                                      66,464                63,486
  Other current assets                                        7,648                 9,231
                                                          -----------           ----------
                                                            364,180               360,797
                                                          -----------           ----------

INVESTMENTS AND OTHER ASSETS
  Restricted cash                                            39,739                   884
  Investments in affiliates                                    -                  110,000
  Deferred income taxes                                      89,859                89,674
  Other assets                                               24,144                23,720
                                                          -----------           ----------
                                                            153,742               224,278
                                                          -----------           ----------

PROPERTY AND EQUIPMENT
  Land                                                       31,180                30,124
  Buildings                                                  96,397                98,309
  Machinery and equipment                                   656,329               652,076
                                                          -----------           ----------
                                                            783,906               780,509
  Less accumulated depreciation                            (328,972)             (322,952)
                                                          -----------           ----------
                                                            454,934               457,557

GOODWILL                                                     40,954                71,399
OTHER INTANGIBLE ASSETS                                       8,845                 9,247
                                                          -----------           ----------

TOTAL ASSETS                                           $  1,022,655           $ 1,123,278
                                                         ============            ==========
- ----------------------------------------------------------------------------------------------



See  Notes  to  Condensed  Consolidated  Financial  Statements



































- -------------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  BALANCE  SHEETS
BORDEN  CHEMICAL,  INC.

(In  thousands,  except  share  data)

                                                                       March 31,     December 31,
LIABILITIES AND SHAREHOLDERS' DEFICIT                                    2002           2001
- -------------------------------------------------------------------------------------------------
                                                                                   
CURRENT LIABILITIES
  Accounts and drafts payable                                      $   96,812     $   124,690
  Accounts payable to affiliates                                        5,033             750
  Debt payable within one year                                          2,956           3,078
  Loans payable to affiliates                                          73,050          78,550
  Note payable to unconsolidated subsidiary                              -             34,181
  Other current liabilities                                           100,131         106,958
                                                                    ----------       ---------
                                                                      277,982         348,207
                                                                    ----------       ---------

OTHER LIABILITIES
  Long-term debt                                                      532,494         532,497
  Non-pension post-employment benefit obligations                     148,691         150,916
  Other long-term liabilities                                         192,586         188,963
                                                                    ----------       ---------
                                                                      873,771         872,376
                                                                    ----------       ---------

 COMMITMENTS AND CONTINGENCIES (SEE NOTE 11)

SHAREHOLDERS' DEFICIT
  Common stock - $0.01 par value: authorized 300,000,000 shares,
     Issued 200,363,672 and 199,121,749 shares in 2002 and
     2001, respectively                                                 2,004           1,990
  Paid in capital                                                   1,111,646       1,106,789
  Receivable from parent                                             (404,817)       (404,817)
  Deferred compensation                                                (2,381)           -
  Accumulated other comprehensive income                             (137,007)       (134,436)
  Accumulated deficit                                                (698,543)       (666,831)
                                                                    ----------       ---------
                                                                     (129,098)        (97,305)
                                                                    ----------       ---------

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                       $ 1,022,655     $ 1,123,278
                                                                   ===========     ===========
- ----------------------------------------------------------------------------------------------


See  Notes  to  Condensed  Consolidated  Financial  Statements





































- -------------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (UNAUDITED)
BORDEN  CHEMICAL,  INC.

                                                                         Three months ended March 31,
(In thousands)                                                            2002                 2001
- -------------------------------------------------------------------------------------------------
                                                                                          
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
  Net (loss) income                                          $       (31,712)           $      845
  Adjustments to reconcile net (loss) income to net
  cash from (used in) operating activities:
     Gain on the sale of assets                                          -                  (2,588)
     Deferred tax benefit                                             (1,237)              (11,020)
     Depreciation and amortization                                    12,101                14,027
     Business realignment expense (income)                             4,659                (4,056)
     Unrealized (gain) loss on interest rate swap                       (516)                  488
     Cumulative effect of change in accounting principle              29,825                    -
  Net change in assets and liabilities:
     Accounts receivable                                             (14,176)               (2,249)
     Inventories                                                      14,386                 5,219
     Accounts and drafts payable                                     (23,455)               11,595
     Income taxes                                                     10,174                56,237
     Other assets                                                      3,759                 2,630
     Other liabilities                                               (26,820)              (11,566)
  Cash provided by discontinued operations                               -                   1,734
                                                                    ---------             ---------
                                                                     (23,012)               61,296
                                                                    ---------             ---------

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
  Capital expenditures                                               (10,479)              (14,970)
  Proceeds from sale of note receivable to an affiliate              110,000                  -
  Proceeds from sale of assets                                         3,002                16,278
  Collection of affiliate's receivables                                  -                     500
                                                                    ---------             ---------
                                                                     102,523                 1,808
                                                                    ---------             ---------

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
  Net short-term debt repayments                                        (122)              (23,866)
  Repayments of long-term debt                                            (3)                 -
  Affiliated repayments/loans, net                                    (5,500)              (21,829)
  Payment of note payable to unconsolidated subsidiary               (31,581)
  Increase in restricted cash                                        (38,855)                 -
  Interest received from parent                                          -                  12,145
  Common stock dividends paid                                            -                 (12,145)
  Preferred stock dividends paid                                         -                 (18,431)
  Sale of common stock to management, net of repurchases                 153                  -
                                                                    ---------             ---------
                                                                     (75,908)              (64,126)
                                                                    ---------             ---------

































- -------------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (UNAUDITED)  (CONTINUED)
BORDEN  CHEMICAL,  INC.


                                                                   Three months ended March 31,
(In thousands)                                                         2002                 2001
- -------------------------------------------------------------------------------------------------
                                                                                        
  Increase (decrease) in cash and equivalents                         3,603                (1,022)
  Cash and equivalents at beginning
  of period                                                          24,632                26,934
                                                                  ----------            ---------
  Cash and equivalents at end
  of period                                                 $        28,235          $     25,912
                                                                   ===========            ==========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid (received):
     Interest, net                                          $        15,861          $     21,349
     Income taxes, net                                                2,269               (45,167)
  Non-cash activity:
     Capital contribution by parent                                   2,337                10,975
     Settlement of note payable to unconsolidated subsidiary          2,600                   -

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



See  Notes  to  Condensed  Consolidated  Financial  Statements


























































- --------------------------------------------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  STATEMENTS  OF  SHAREHOLDERS'  DEFICIT  (UNAUDITED)
BORDEN  CHEMICAL,  INC.

(In  thousands)
- --------------------------------------------------------------------------------------------------------------------------------

                                           Common     Paid-in     Receivable    Deferred     Accumulated   Accumulated
                                            Stock     Capital       from      Compensation     Other         Deficit   Total
                                                                   Parent        Income     Comprehensive
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2001               $ 1,990     $  1,106,789 $  (404,817)  $   -     $  (134,436)  $ (666,831)   $ (97,305)
- --------------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Net loss                                                                                                   (31,712)     (31,712)
Translation adjustments and other                                                              (2,855)                   (2,855)
Derivative activity (net of $156 tax)                                                             284                       284
                                                                                                                        ---------
COMPREHENSIVE INCOME                                                                                                    (34,283)
                                                                                                                        ---------
Shares sold to management, net of repurchases  3              150                                                           153
Restricted stock issued to management         11            2,370                 (2,381)                                    -
Other capital contributions from parent                     2,337                                                         2,337
- ---------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2002                  $ 2,004     $  1,111,646 $  (404,817)  $ (2,381) $  (137,007)  $ (698,543)  $ (129,098)
- -----------------------------------------------------------------------------------------------------------------------------------



See  Notes  to  Condensed  Consolidated  Financial  Statements




















































NOTES  TO  CONDENSED  CONSOLIDATED
FINANCIAL  STATEMENTS
(Dollars  in  thousands  except  per  share  amounts and as otherwise indicated)

1.     BACKGROUND

On March 14, 1995, affiliates of Kohlberg, Kravis Roberts & Co. ("KKR") acquired
control  of  the  Company.  In  late  1995,  the  Company  began  the process of
redesigning  its  operating  structure in order to maximize value for its owners
and  divested  businesses  that  did  not fit into its long-term strategic plan.
After  divestiture  of  the  Consumer  Adhesives  business  segment in 2001, the
Company's  sole  remaining  business  is the Chemical business, which is engaged
primarily  in  manufacturing,  processing,  purchasing  and  distributing forest
products  and  industrial resins, formaldehyde, coatings and other specialty and
industrial  chemicals  worldwide.

2.     BASIS  OF  PRESENTATION

The  accompanying  unaudited  Condensed  Consolidated  Financial Statements (the
"Financial  Statements")  include  the accounts of Borden Chemical, Inc. and its
subsidiaries, after elimination of intercompany accounts and transactions.  Note
3  discusses  changes from previously filed Financial Statements due to a change
in  the  reporting  entity.

The  accompanying  Financial  Statements  contain  all adjustments, which in the
opinion  of  management are necessary for a fair presentation of the results for
the  interim  periods.  Results  for  the  interim  periods  are not necessarily
indicative  of  results  for  the  full  year.

Operating segment information is provided in Item 2 (Management's Discussion and
Analysis  of  Financial  Condition and Results of Operations) and is an integral
part  of  the  Financial  Statements.

Certain  prior  year  amounts  have  been  reclassified to conform with the 2002
presentation.

3.     CHANGE  IN  REPORTING  ENTITY

BCP  Management, Inc. ("BCPM"), a wholly owned subsidiary of the Company, serves
as  the  general  partner  of  Borden Chemicals and Plastics Limited Partnership
("BCP")  and  Borden  Chemical  and  Plastics  Operating  Limited  Partnership
("BCPOLP"). BCP is the sole limited partner of BCPOLP.  As general partner, BCPM
has  certain  fiduciary responsibilities to BCP and BCPOLP.  BCP and BCPOLP were
created in November 1987, as separate and distinct entities from the Company and
BCP  is  99%  owned by the public.  On April 3, 2001, BCPOLP and its subsidiary,
BCP  Finance Corporation, filed voluntary petitions for protection under Chapter
11  of  the United States Bankruptcy Code.  On March 22, 2002, BCPM also filed a
voluntary  petition  for  protection  under  Chapter  11 of the Bankruptcy Code.


As  a  result of the bankruptcy, the Company's rights as the shareholder of BCPM
and  the  authority  of  the  Board  of Directors of BCPM with respect to BCPM's
operations  have  been  significantly  restricted.  Consequently, the Company no
longer  includes  BCPM  in its Financial Statements but rather accounts for BCPM
under  the  equity  method  of accounting for all periods presented. There is no
impact  on  previously  reported  amounts  of  net  income  as  a  result of the
deconsolidation.  The impact on the Condensed Consolidated Balance Sheets of the
deconsolidation  is  to  reduce both total assets and liabilities by $38,031 and
$40,348  at  March  31,  2002 and December 31, 2001, respectively. The Company's
equity  method  investment  in  BCPM  has  been  written-down  to  $0.

4.     BUSINESS  REALIGNMENT  EXPENSE

In  first quarter 2002, the Company recorded net business realignment expense of
$4,659.

























Provided  below  is a summary of business realignment reserve activity for first
quarter  2002:


- ------------------------------------------------------------------------------------------------------
                                                RESERVES                                    RESERVES
                                               DECEMBER 31,     2002             2002       MARCH 31,
                                                 2001          EXPENSE          CHARGES        2002
- ------------------------------------------------------------------------------------------------------
                                                                                 
Plant closure costs (including employee
 costs)                                    $  14,389       $    4,657     $    (2,120)    $   16,926
Corporate severance and other employee
costs .                                        8,360                2          (1,526)         6,836
                                           ----------     -------------    -------------   ---------
                                           $  22,749       $    4,659     $    (3,646)    $   23,762
- -------------------------------------------------------------------------------------------------------


Business  realignment expense in first quarter 2002 of $4,659 consists of $7,122
of plant closure costs, primarily related to the closure of the melamine crystal
business,  and  $2  of severance and other employee costs, partially offset by a
pre-tax  gain  on  the sale of land associated with a previously closed plant of
$2,465  ($1,602 after-tax). Plant closure costs include plant employee severance
of  $4,390  and  demolition,  environmental  and  other  costs  of  $2,732.

In first quarter 2001, the Company sold land associated with a previously closed
forest  products  resins  plants closed in 2001 for $11,017, which resulted in a
pre-tax  gain  of  $10,507 ($6,514 after-tax). Offsetting the gain were costs of
$6,451  associated  with plant closures and a business process redesign project.
The  plant  closure costs consisted primarily of asset write-offs, severance and
environmental  remediation  costs.

5.     RESTRICTED  CASH

Restricted  cash  at  March  31,  2002  and  December  31,  2001 represents cash
collateral  related  to the Company's uncommitted letter of credit facility. The
$45,000  facility, which was increased to $85,000 in the second quarter of 2002,
requires  the  Company  to  provide  cash  collateral  equivalent to 101% of the
letters  of  credit  outstanding.  The  amount  of  letters  of  credit and cash
collateral  outstanding  under  this  facility  at May 13, 2002 were $54,375 and
$54,919,  respectively.

6.     GOODWILL  AND  INTANGIBLE  ASSETS

As  of  January  1,  2002,  the Company adopted SFAS No. 142 "Goodwill and Other
Intangible  Assets".  Consequently,  subsequent to January 1, 2002, goodwill and
identifiable  intangible  assets  with  indefinite  useful  lives  are no longer
amortized  and  identifiable  assets with finite useful lives are amortized over
their  respective  useful  lives.

Also,  in  conjunction  with  adopting  SFAS  No.  142, the Company assessed its
intangible  assets  and  tested  the carrying amount of goodwill for impairment.
The  intangible  asset  assessment  was  conducted  to  determine  whether  any
intangibles had indefinite useful lives.  The Company determined that all of its
intangible  assets  had  finite  useful lives, and that no adjustment of current
useful  lives  was  necessary.  As a result of its goodwill impairment test, the
Company  recorded  an  impairment charge related to its European reporting unit,
which  is  discussed  in  more  detail  below.


























As  required,  SFAS No. 142 was adopted on a prospective basis; therefore, prior
periods  have  not  been restated.  The following table provides a comparison of
first  quarter  2002  compared  to  first  quarter 2001 as if the new accounting
principle  were  applied  to  the  prior  year  period:


- -------------------------------------------------------------------------------------------
                                                            THREE MONTHS ENDED MARCH 31,
                                                          2002                      2001
- -------------------------------------------------------------------------------------------
                                                                               
     Reported net (loss) income                         $(31,712)             $      845
     Add back goodwill amortization                         -                         697
     Adjusted net (loss) income                          (31,712)                   1,542
                                                         ---------               ---------

     Add back cumulative effect of change in
        accounting principle                              29,825                     -
                                                         ---------               ---------

     Adjusted (loss) income before cumulative effect
        in change in accounting principle               $ (1,887)              $    1,542
                                                         =========                ========
     Basic and diluted per share data:
     Reported net (loss) income                         $  (0.16)              $     -
     Add back goodwill amortization                          -                       -
                                                         ---------               ---------
     Adjusted net (loss) income                            (0.16)                     .01
     Add back cumulative effect of change in
        accounting principle                                0.15                     -
                                                         ---------               ---------
     Adjusted (loss) income before cumulative effect
        of change in accounting principle               $  (0.01)              $      .01
                                                         =========               =========
- -------------------------------------------------------------------------------------------


The  changes in the carrying amount of goodwill for the three months ended March
31,  2002  are  as  follows:

- ------------------------------------------------------------------------------
Goodwill balance at December 31, 2001                                $ 71,399
Less goodwill impairment recognized
     upon adoption of SFAS No. 142                                    (29,825)
Foreign currency translation                                             (620)
                                                                     ---------
Goodwill balance at March 31, 2002                                   $ 40,954
                                                                     ---------
- ------------------------------------------------------------------------------

Intangible  assets,  which  will  continue  to  be  amortized,  consist  of  the
following:



- -----------------------------------------------------------------------------------------------------------------
                                                             At March 31, 2002             At December 31, 2001
                                                           ---------------------         ------------------------
                                                                                             
                                                        Gross                         Gross
                                                      Carrying     Accumulated       Carrying        Accumulated
                                                       Amount      Amortization       Amount        Amortization
                                                     ---------    --------------     --------      --------------
Intangible assets:

     Customer list and contracts                     $   6,559      $  3,047         $  6,559         $   2,824
     Formulas and technology                             6,524         3,888            6,524             3,730
     Unrecognized prior service cost                     2,657           -              2,657                -
     Other                                                 744           735              744               683
                                                      -----------   ----------        ----------       ----------
                                                     $  16,484      $  7,670         $ 16,484         $   7,237
- -----------------------------------------------------------------------------------------------------------------



Aggregate  intangible amortization expense for the quarters ended March 31, 2002
and  2001  was  $433  and  $336,  respectively.










Estimated  annual  intangible  amortization  expense for 2002 through 2006 is as
follows:

     2002     $     1,672
     2003           1,657
     2004           1,657
     2005           1,648
     2006           1,123

The  Company's  recorded  goodwill  of  $71,399 as of December 31, 2001 had been
recorded  in  conjunction  with  numerous  business  acquisitions.  As mentioned
above, in accordance with the implementation of SFAS No. 142, the Company tested
goodwill  for  impairment  as  of  January  1,  2002.  As  required  by  the new
accounting  principle,  to  perform  the  goodwill  impairment  test the Company
identified  the  appropriate  reporting  units,  assigned assets and liabilities
(including goodwill) to the reporting units, determined estimated fair values of
the  reporting  units,  and  assessed  whether  the estimated fair value of each
reporting  unit  was  more  or  less  than the carrying amount of the assets and
liabilities  assigned to the units.  As a result of this test, the fair value of
each  reporting  unit  exceeded  the  carrying  amount of assets and liabilities
assigned, except for the Company's European reporting unit.  Based on the excess
of  the  carrying  value over the estimated fair value of its European reporting
unit,  the  Company  recorded  a  goodwill  impairment  charge of  $29,825 which
represents  100%  of  January 1, 2002 carrying amount.  There was no tax benefit
recognized in conjunction with the impairment charge.  This impairment charge is
reported  as  the  cumulative  effect  of  change in accounting principle in the
Condensed Consolidated Statements of Operations and the goodwill amount at March
31,  2002  has  been  reduced  by  this  amount.

To determine estimated fair values of the Company's reporting units, the Company
engaged  mergers  and acquisition professionals employed by Borden Capital, Inc.
("Capital"), an affiliate of the Company.  The valuations were performed using a
standard  methodology  based largely on comparable company analysis.  Comparable
company  analysis  ascribes  a value to an entity by comparing certain operating
metrics  of  the  entity  to  those of a set of comparable companies in the same
industry.  Using  this  method,  market multiples and ratios based on operating,
financial  and  stock market performance are compared across different companies
and  to  the  entity  being  valued.  The Company employed a comparable analysis
technique  commonly used in the investment banking and private equity industries
to  estimate  the  values  of  its reporting units - the EBITDA (earnings before
interest,  taxes, depreciation and amortization) multiple technique.  Under this
technique,  estimated  values  are the result of an EBITDA multiple derived from
this  process  applied  to  an  appropriate  historical  EBITDA  amount.

7.     RESTRICTED  COMMON  STOCK

The  Company  has  granted  1,058,201  shares  of  restricted  common  stock  to
management  under  the Amended and Restated 1996 Stock Purchase and Option Plan.
The deferred compensation of $2,381 related to the restricted common shares will
be  amortized  over  the  three-year  vesting  period.


8.     DISCONTINUED  OPERATIONS

In  third quarter 2001, the Company sold its Consumer Adhesives business segment
to  an affiliate.  Consequently, the financial results of Consumer Adhesives are
reported  as discontinued operations in the Condensed Consolidated Statements of
Operations  and  Cash Flows for the period ended March 31, 2001.  Provided below
are  the  major  components  of  the amount reported as income from discontinued
operations  in  2001:

- -------------------------------------------------------------
     Net sales                                  $     24,390
     Income before income taxes                          423
     Income tax benefit                                  (47)
                                                      -------
     Income from  discontinued  operations      $        470
- -------------------------------------------------------------



















9.     COMPREHENSIVE  INCOME

Comprehensive  income  is  computed  as  follows:


- ----------------------------------------------------------------------------------
                                                     THREE MONTHS ENDED MARCH 31,
                                                           2002       2001
                                                                     
- ----------------------------------------------------------------------------------
Net (loss) income                                      $ (31,712)   $    845
Foreign currency translation adjustments                  (2,855)    (12,170)
Cumulative effect of change in accounting
     principle                                               -        (3,293)
Derivative activity                                          284       1,397
                                                         ---------  --------
                                                       $ (34,283)   $(13,221)
- ----------------------------------------------------------------------------------


The  foreign  currency  translation  adjustments  relate primarily to the United
Kingdom  in  2002  and  Canada,  the  United  Kingdom  and  Brazil in 2001.  The
cumulative  effect  of  change  in  accounting  principle in 2001 relates to the
adoption  of  SFAS  No.  133  as of the beginning 2001.  The derivative activity
amounts  represent  reclassification  into  earnings  of the original cumulative
effect  of  change  in  accounting  principle.

10.     RELATED  PARTY  TRANSACTIONS

Financing  and  Investing  Arrangements
- ---------------------------------------

Affiliates  of  the Company invest cash with the Company at rates that generally
approximate  market  rates.  These  investments are recorded in loans payable to
affiliates  in  the  Condensed Consolidated Balance Sheets. Borden Foods Holding
Corporation  ("Foods"),  an  affiliate  of  the Company, had $73,050 and $78,550
invested  at  March  31,  2002  and December 31, 2001, respectively. The Company
recorded  affiliate  interest  expense  of  $722  and  $5,438 related to amounts
invested  by  affiliates  for  the  three  months ended March 31, 2002 and 2001,
respectively.

In first quarter 2002, the Company settled in full its note payable (the "Note")
to  BCPM  in the form of cash payments of $31,581 and $2,600 of certain set-offs
asserted  by  the  Company against amounts due under the Note. BCPM acknowledged
the validity and enforceability of certain set-offs asserted against amounts due
under  the  Note  by the Company; the Company waived the right to assert certain
other  set-offs  against  amounts  due  under the Note; and BCPM and the Company
exchanged mutual releases with respect to the Note. A committee comprised solely
of  independent  directors  of  BCPM,  represented  and  advised by separate and
independent  counsel,  reviewed  and  agreed  to  the  above  provisions.

To  further  simplify  its capital structure, during 2002 the Company intends to
cancel a $404,817 note receivable (plus accrued interest) from its parent, which
has  been accounted for as a reduction from equity.  Historically, the Company's
parent  funded  the  interest  due on the note through common dividends received
from  the  Company.  Quarterly  interest  has  not  been paid, nor an associated
dividend  declared,  since October 15, 2001 and no further interest and dividend
payments  are  expected  in  2002.

At  December  31, 2001, the Company had a $110,000 preferred stock investment in
Consumer  Adhesives,  an  affiliate  of  the  Company.  The  preferred stock was
redeemed  on  March  1,  2002  for  a  $110,000  note  receivable  from Consumer
Adhesives.  On  March  12,  2002,  the note receivable was sold to the Company's
parent  for  cash  of  $110,000  plus  accrued  interest  of  $455.

As  a  guarantor  of  the  Company's debt, Foods receives an annual fee from the
Company  of  $1,100.

Administrative  Service,  Management  and  Consulting  Arrangements
- -------------------------------------------------------------------

The  Company provides administrative services to Foods under a revised agreement
effective  for  2002.  The  total  fee for this agreement is $120 in 2002.  Fees
received  for  these  services  are  offset  against  the  Company's general and
administrative  expenses  and  totaled  $30  and $662 for the three months ended
March  31,  2002  and 2001, respectively.  In addition, the Company pays certain
costs  on  behalf  of  Foods and is reimbursed by Foods for 100% of these costs.
Included  in  accounts  receivable  from  affiliates  at  March 31, 2002 is $838
related  to  these  costs.

Capital  provides  management, consulting and governance to the Company, and the
Company provides certain administrative services to Capital. Capital charges the
Company  an annual fee of $9,000, payable quarterly in arrears, which represents
the  net  amount  of  Capital's  fee  less  the  Company's  fee  for  providing
administrative  services  to  Capital. At March 31, 2002, $2,250 was included in
accounts  payable  to  affiliates  for  amounts  due  to  Capital  under  this
arrangement. In addition, the Company has $2,718 included in accounts payable to
affiliates  for amounts owed to Capital related to the corporate reorganization.

The  Company pays certain costs on Capital's behalf and is reimbursed by Capital
for  100%  of  these  costs.  Included in accounts receivable from affiliates at
March  31,  2002  is  $4,957  receivable  for  these  expenses.

Other  Transactions  and  Arrangements
- --------------------------------------

Prior to the sale of Consumer Adhesives to an affiliate of the Company, Consumer
Adhesives  and  the Company were parties to a tax sharing agreement.  Under this
agreement,  Consumer  Adhesives  paid income taxes to the Company as if Consumer
Adhesives  filed stand-alone federal and state income tax returns.  At March 31,
2002  and  December  31,  2002,  the  Company had an outstanding receivable from
Consumer  Adhesives  of  $6,661  for  unpaid  federal  and  state  income  tax.


11.     COMMITMENTS  AND  CONTINGENCIES

ENVIRONMENTAL  MATTERS  -  The  Company,  like  others in similar businesses, is
subject  to  extensive  Federal,  state  and  local  environmental  laws  and
regulations.  Although  environmental  policies  and  practices  are designed to
ensure  compliance  with  these  laws  and  regulations, future developments and
increasingly  stringent  regulation could require the Company to make additional
unforeseen  environmental  expenditures.  Accruals for environmental matters are
recorded  when  it is probable that a liability has been incurred and the amount
of  the  liability  can  be  reasonably  estimated.  Environmental  accruals are
routinely  reviewed  on  an interim basis as events and developments warrant and
are  subject  to  a  comprehensive review annually during the fourth quarter. In
addition,  under  an  Environmental  Indemnity Agreement between the Company and
BCP,  the  Company has agreed, subject to certain conditions and limitations, to
indemnity BCP from certain environmental liabilities arising from or relating to
occurrences  on  or prior to November 30, 1987 which are incurred on or prior to
November  30,  2002 at BCP facilities which were previously owned by the Company
and  share  on an equitable basis liabilities incurred on or before November 30,
2002  arising  from  or  relating  to  facts  or  circumstances  existing  and
requirements  in  effect  both prior to and after November 30, 1987. The Company
has accrued approximately $40,796 and $41,023 at March 31, 2002 and December 31,
2001,  respectively,  for  probable  environmental  remediation  and restoration
liabilities.  This  is management's best estimate of these liabilities, based on
currently  available  information  and analysis. The Company believes that it is
reasonably  possible  that  costs  associated  with  such liabilities may exceed
current  reserves by amounts that may prove insignificant, or by amounts, in the
aggregate,  of  up  to  approximately  $32,000.

LEGAL  MATTERS  -  The  Company has recorded $2,586 and $2,794 in liabilities at
March  31,  2002  and December 31, 2001, respectively, for legal costs that they
believe are probable and reasonably estimable.  Actual costs are not expected to
exceed  these  amounts.  The  Company  believes,  based  upon the information it
currently  possesses,  and  taking  into  account  its  established reserves for
estimated liability and its insurance coverage, that the ultimate outcome of the
foregoing  proceedings and actions is unlikely to have a material adverse effect
on  the  Company's  financial  statements.

OTHER  -  BCPM  serves  as  general  partner of BCP and BCPOLP.  BCP is the sole
limited  partner  of  BCPOLP.  As  general  partner,  BCPM has certain fiduciary
responsibilities  to  BCP  and  BCPOLP.  BCP and BCPOLP were created in November
1987 as separate and distinct entities from the Company, and BCP is 99% owned by
the  public.  On  April  3,  2001,  BCPOLP  and  its  subsidiary,  BCP  Finance
Corporation,  filed  voluntary  petitions for protection under chapter 11 of the
United  States  Bankruptcy  Code,  Title  11  of the United States Codes, in the
United  States Bankruptcy Court of the District of Delaware.  On March 22, 2002,
BCPM  also  filed  a  voluntary  petition for protection under Chapter 11 of the
Bankruptcy  Code.  See  Note  3  regarding  the  deconsolidation  of  BCPM.

























Part  1.  FINANCIAL  INFORMATION

Item  2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS  (amounts  in  thousands)

CRITICAL  ACCOUNTING  POLICIES
- ------------------------------

For  a  discussion  of  the  Company's  critical  accounting  policies, refer to
Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
Operations on page 12 of the Company's Annual Report on Form 10-K filed with the
Securities  and  Exchange  Commission  on  March  29,  2002.

RESULTS  OF  OPERATIONS  BY  SEGMENT:
- -------------------------------------

Following  is  a  comparison  of  net  sales  and  Adjusted  Operating EBITDA by
reportable  business  segment  for  the  Company.



- -----------------------------------------------------------------------------
                                                              MARCH 31,
                                                           3 MONTHS ENDED
- -----------------------------------------------------------------------------
                                                     2002              2001
                                                 ----------------------------

                                                                  
NET SALES:
     Chemical                                 $    292,739     $     354,514
     Business disposed of (1)                        3,352             6,583
                                                 ----------        ----------
                                                   296,091           361,097
                                                 ==========        ==========
ADJUSTED OPERATING EBITDA:
     Chemical                                  $    43,819            46,772
     Corporate and other                           (12,415)          (11,840)
     Business disposed of (1)                          448                25
                                                 ----------        ----------
     TOTAL ADJUSTED OPERATING EBITDA (2)            31,852            34,957

     Significant and Unusual items (3)              (4,659)            4,054
     Depreciation and amortization                 (12,101)          (14,027)
                                                 ----------        ----------
     OPERATING INCOME                          $    15,092     $      24,984
                                                 ==========        ==========
- -----------------------------------------------------------------------------



(1)     In  fourth  quarter  2001,  the Company announced that it had decided to
offer  for  sale  its  melamine  crystal  business  and that it would attempt to
complete  the  sale  by the end of the year.  However, as of the end of 2001, no
sale  had  been  negotiated  and in January 2002 the Company closed its melamine
crystal  business.
(2)     Adjusted  Operating  EBITDA  represents  net  income  (loss)  excluding
discontinued  operations,  non-operating  income  and expenses, interest, taxes,
depreciation,  amortization  and  Significant  and  Unusual  items  (see below).
(3)     Significant  and  Unusual  items represent business realignment expenses
and gains and losses on the divestiture of businesses. The 2002 amount primarily
represents  plant closure costs of $7,122 partially offset by a gain on the sale
of  land  related  to  a  previously  closed  plant  of $2,465.  The 2001 amount
represents  a gain on the sale of land associated with a previously closed plant
of  $10,507,  partially  offset  by assets write-offs of $2,134 which related to
restructuring  activities  initiated  in  2000,  as  well as severance and other
employee  benefit costs of $1,644 associated with a business redesign project in
the  Company's  forest  products  resins  operations.  The Company also incurred
duplicative  facilities  and  environmental  costs  in 2001 of $2,673 related to
restructuring  activities  initiated  in  2000.















THREE  MONTHS  ENDED  MARCH  31,  2002  VERSUS THREE MONTHS ENDED MARCH 31, 2001

Chemical
- --------

Net  sales  dollars  and  Adjusted  Operating  EBITDA in first quarter 2002 were
behind  prior year by 17% and 6%, respectively.  The most significant components
of  the  sales  decline  were lower selling prices resulting from contract based
pass  through  of  raw  material  price  declines,  unfavorable  product mix and
unfavorable  currency exchange rates.  Regarding Adjusted Operating EBITDA , the
favorable  spread  between selling price declines and raw material cost declines
were  more  than offset by unfavorable product mix, higher bad debt expense and
unfavorable  currency  exchange  rates.

Lower  selling  prices  reduced  2002  sales by approximately $44,000. The lower
selling prices reflect lower raw material costs, as a substantial portion of the
Company's sales volumes, especially for North American forest products, are sold
under  contracts that provide for monthly or quarterly selling price adjustments
based  on  published cost indices for the Company's primary raw materials (i.e.,
methanol,  phenol  and  urea).

Unfavorable  product mix negatively impacted 2002 sales by approximately $8,000.
The  unfavorable  mix  resulted from decreased volumes of higher priced oilfield
and  UV  coatings  products.  The  volume decline in oilfield products is due to
reduced drilling activity in first quarter 2002 reflecting lower natural gas and
oil  prices.  The UV coatings products volume decline is the result of a decline
in  demand  for  optical  fiber  in first quarter 2002 compared to first quarter
2001.  Partially  offsetting  these  decreases were increased forest product and
foundry  resin  volumes.  Higher  forest  product  resins volume reflects strong
housing  starts  in  2002, in spite of generally weak economic conditions, while
higher  foundry  resins  volume reflects incremental volume from a merger
formed  in  second  quarter  2001.

Unfavorable  currency exchange rates, primarily in Latin America and Canada, had
an  unfavorable  impact  on  sales  of  approximately  $7,000.

As  mentioned  above, Adjusted Operating EBITDA in first quarter 2002 of $43,819
was  6%  lower than prior year.  A positive spread between selling price and raw
material  cost  declines  was  more than offset by the effect of the unfavorable
sales  mix,  higher  bad  debt expense and unfavorable currency exchange rates.
The  positive  spread  between  selling  prices  and  raw material cost declines
reflects the lag time in selling price adjustments during times of declining raw
material  costs.  Higher  bad debt expense reflect primarily higher losses that
reflect  the  generally  weak  economic  environment.

Corporate  and  other
- ---------------------

Adjusted  Operating  EBITDA,  which  is  composed  primarily  of  general  and
administrative  expenses  and  income  and  expenses  related to previously sold
businesses  of  the  Company,  declined  $575, or approximately 5%, to a loss of
$12,415 in first quarter 2002 from a loss of $11,840 in first quarter 2001.  The
decline  is primarily due to the absence of a 2001 gain on the sale of a portion
of  a  common  stock  equity  investment held by the Company partially offset by
reduced  general  and  administrative  expenses.

Business  disposed  of
- ----------------------

The  Company  shut  down  its  melamine  crystal  business  on January 11, 2002.
Operating  results  for  first  quarter  2002  represent  primarily revenues and
related  expenses  from  the  sale  of inventory subsequent to the closure date.
Sales and Adjusted Operating EBITDA were $3,352 and $448, respectively, in first
quarter  2002  and  were  $6,583  and  $25, respectively, in first quarter 2001.





























NON-OPERATING  EXPENSES  AND  INCOME  TAXES
- -------------------------------------------

Following  is  a comparison of non-operating expenses for the three months ended
March  31,  2002  and  2001:




- ----------------------------------------------------------------------
                                          THREE MONTHS ENDED MARCH 31,
                                         ----------------------------
                                               2002          2001
- ----------------------------------------------------------------------

                                                      
Interest expense                           $  11,787     $   13,084
Affiliated interest expense, net                 267          5,055
Other non-operating income                    (2,288)          (445)
                                             --------       --------
                                           $   9,766     $   17,694
- ---------------------------------------------------------------------


Non-operating  expenses  declined $7,928 from $17,694 for the three months ended
March  31, 2001 to $9,766 for the three months ended March 31, 2002. The decline
is  primarily due to a reduction in net affiliated interest expense and interest
expense  of  $4,788  and  $1,297,  respectively,  due  to  lower  affiliated and
short-term  debt  borrowings. Additionally, affiliated dividend income of $1,512
was  recognized  in  2002.

Following is a comparison of income tax expense related to continuing operations
for the  three  months  ended  March  31,  2002  and  2001:



- ------------------------------------------------------------------------
                                                   THREE MONTHS ENDED
                                                         MARCH 31,
                                            ----------------------------
                                                     2002          2001
- ------------------------------------------------------------------------

                                                                
Income tax expense                           $      7,213      $  6,915
Effective tax rate                                   135%           95%
- ------------------------------------------------------------------------

The  2002  effective  tax  rate reflects a higher portion of income derived from
foreign  operations  and the effect of higher tax rates in foreign jurisdictions
as  well  as  additional valuation allowances against foreign net operating loss
carryforwards.

The  2001  effective  tax  rate  reflects  the impact of earnings related to the
expected  sale  of  a  foreign  business that are not expected to be permanently
reinvested  in  foreign  locations  and the inability to utilize the foreign tax
credits  associated  with  those  earning  due  to  usage  limitations.

CASH  FLOWS
- -----------

Operating  Activities
- ---------------------

Operating activities used cash of $23,012 in first quarter 2002 compared to cash
provided of $61,296 in the same period of the prior year. The decline of $84,308
is  primarily  due  to  the  absence  of  a  2001  net tax refund of $45,167, an
increased  outflow  in  accounts  payable  of $35,050 primarily due to timing of
payments and reduced payment terms with new raw material suppliers and a $11,927
reduction  in  accounts  receivable  cash flows due in part to higher affiliated
receivables.  Also contributing to the increased cash outflow is a $3,105
reduction  in  Adjusted  Operating  EBITDA  and the absence of cash inflows from
discontinued  operations of $1,734 in 2002. Partially offsetting these increases
in  cash  usage  is improved inventory flows of $9,167 due to lower raw material
costs  and  a  reduction  in  net  interest  payments  of  $5,488.

Investing  Activities
- ---------------------

Investing activities in first quarter 2002 provided cash of $102,523 compared to
$1,808 in first quarter 2001.  The $100,715 improvement is primarily due to cash
proceeds  from  the  sale  of  a  note  receivable  from  Consumer Adhesives, an
affiliate  of  the Company, to the Company's parent for $110,000 (see Note 10 to
the  Condensed  Consolidated Financial Statements), proceeds of $3,002 primarily
from  the sale of land associated with a closed plant and a reduction in capital
expenditures  of  $4,491.  These amounts were partially offset by the absence of
2001  proceeds  of  $11,000 from the sale of land associated with a closed plant
and  proceeds  of  $5,278 primarily from the sale of a portion of a common stock
equity  investment  held  by  the  Company.

Financing  Activities
- ---------------------

Financing  activities  used cash of $75,908 in first quarter 2002 versus $64,126
in  first quarter 2001. The $11,782 increase in cash used is primarily due to an
increase  in  restricted  cash  of  $38,855  (see  below), the payment of a note
payable  to  unconsolidated  affiliate (the "Note") of $31,581 and increased net
affiliate  repayments  of  $5,500  to  Foods.  These increased uses of cash were
partially  offset by lower short-term debt repayments of $23,744 and the absence
of  the  $18,431  quarterly  preferred  stock  dividend  payment  due  to  the
contribution  of the $614,369 of preferred stock to the Company by the Company's
parent  in  2001.

The  Company's  Note  to  BCPM  has  been  settled in full with cash payments of
$31,581  and  $2,600 of certain set-offs asserted by the Company against amounts
due  under  the  Note.  In  connection  with  the  payment  of  the  Note,  BCPM
acknowledged  the  validity  and  enforceability  of  certain  set-offs asserted
against  amounts due under the Note by the Company; the Company waived the right
to  assert  certain  other set-offs against amounts due under the Note; and BCPM
and  the Company exchanged mutual releases with respect to the Note. A committee
comprised  solely  of  independent directors of BCPM, represented and advised by
separate  and  independent counsel, reviewed and agreed to the above provisions.

LIQUIDITY  AND  CAPITAL  RESOURCES
- ----------------------------------

During first quarter 2002, the Company finalized an uncommitted letter of credit
facility  totaling  $45,000,  and  in  second  quarter  2002,  the  facility was
increased  to  $85,000.  The  Company  is  required  to  provide cash collateral
equivalent  to  101%  of  the letters of credit outstanding under this facility.
The  fees under this facility are 1/2% per annum of the amount of the letters of
credit outstanding.  In addition, a 1/8% per annum issuance fee is in effect for
all  new  letters  of  credit  not transferred from the existing $250,000 Credit
Agreement.  At  March  31,  2002,  the  Company  had provided cash collateral of
$39,739,  classified  as  restricted  cash on the Condensed Consolidated Balance
Sheet,  related  to  this  facility.

The  Company's  $250,000 Credit Agreement expires on July 13, 2002.  The Company
intends  to  replace  the  existing  facility with a new credit facility but may
continue  borrowing  from affiliates to meet future working capital requirements
if  cost  effective.  The  new  credit  facility  is  intended  to  replace  the
uncommitted  letter  of  credit  facility  discussed  above.

Under  the terms of the guarantee agreement between Foods and the Company, Foods
will  be  automatically released from the obligation to guarantee the payment of
the  Company's outstanding publicly held debt upon Foods being released from the
obligation  to  guarantee  the payment of amounts due under the Company's Credit
Agreement.


RECENT  ACCOUNTING  PRONOUNCEMENTS
- ----------------------------------

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("SFAS")  No.  143,  "Accounting for Asset
Retirement  Obligations," which addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated  asset  retirement  costs.  Under this Statement, an asset retirement
obligation  is  recognized  at  its  fair  value  in  the  period in which it is
incurred.  Asset retirement costs are capitalized as part of the carrying amount
of  the  long-lived  asset  and  a related amortization expense is recognized in
future  periods.  This  Statement  is  effective  for  the Company for financial
statements issued for fiscal years beginning after January 1, 2003.  The Company
is  in  the  process  of  determining  the  impact  of  adopting this Statement.

In May 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4,
44,  and  64,  Amendment  of  FASB Statement No. 13, and Technical Corrections."
This  Statement rescinds the aforementioned Statements and amends SFAS No. 13 to
eliminate  inconsistencies  between  the  required accounting for sale-leaseback
transactions  and certain lease modifications that are similar to sale-leaseback
transactions.  This  Statement  also amends various authoritative pronouncements
to  clarify,  correct  technically  or  describe  applicability  under  changed
conditions.  The  provisions  of  this  Statement  related  to  SFAS  No.  4 are
effective for fiscal years beginning after May 15, 2002.  The provisions of this
Statement  related to SFAS No. 13 are effective for transactions occurring after
May  15,  2002.  The  remaining  provisions  of this Statement are effective for
financial  statements  issued  on  or  after May 15, 2002.  Early application is
encouraged  for  all  provisions of this Statement.  The Company does not expect
the  adoption  of  this  Statement  to  have  a material impact on its financial
statements.



FORWARD-LOOKING  AND  CAUTIONARY  STATEMENTS
- --------------------------------------------

The  Company  and  its  officers  may,  from  time to time, make written or oral
statements regarding the future performance of the Company, including statements
contained  in  the Company's filing with the Securities and Exchange Commission.
Investors should be aware that these statements are based on currently available
financial,  economic,  and competitive data and on current business plans.  Such
statements  are  inherently uncertain and investors should recognize that events
could  cause  the  Company's  actual  results  to  differ  materially from those
projected  in  forward-looking  statements  made by or on behalf of the Company.
Such risks and uncertainties are primarily in the areas of results of operations
by  business  unit,  liquidity,  legal  and  environmental  liabilities.








































































Part  II

Item  1:  LEGAL  PROCEEDINGS

There have  been no material developments in the ongoing legal proceedings that
are  discussed  in  the  Company's Annual Report on Form 10-K for the year ended
December 31, 2001.

The Company is involved in other litigation throughout the United States, which
is  considered  to  be  in  the  ordinary  course  of  the  Company's  business.

The  ompany  believes,  based  on  the  information it presently possesses, and
taking  into  account  its  established reserves for estimated liability and its
insurance coverages,  that the ultimate outcome of the foregoing proceedings is
unlikely to  have  a  materially  adverse  effect  on  the  Company's financial
statements.

Item  2:  CHANGE  IN  SECURITIES  AND  USE  OF  PROCEEDS

On  March  25,  2002  the  Company  sold  222,222  shares of common stock to the
President  and Chief Executive Officer at a price of $2.25 per share pursuant to
a private offering under section 4(2) of the Securities Act of 1933, as amended.
The  Company  has  also  granted  common  stock  options and 1,058,201 shares of
restricted common  stock to the President and Chief Executive Officer, under the
Amended  and  Restated  1996 Stock Purchase and Option Plan. The terms governing
the  President  and  Chief  Executive  Officer's  stock  and  stock  options are
described in his Summary of Terms of Employment, which is filed as an exhibit to
this  Report.

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

On  March  15,  2002  the  majority stockholders of the Company voted by written
consent  to  amend  the 1996 Stock Purchase and option Plan for Key Employees of
Borden Chemical, Inc. to increase the number of shares available under the Plan.

 Item  6:  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,  AND  REPORTS ON FORM 8-K

a.     Exhibits

     (10)(i)   Summary  of Terms of Employment for President and Chief Executive
               Officer dated January 4, 2002.

     (10)(ii)  First Amendment, dated as of March 27, 2002, to the Reimbursement
               agreement for Uncommitted Letter of Credit Facility between
               Credit Suisse First Boston, New York Branch dated
               January 18, 2002.

     (10)(iii) Second Amendment dated as a of April 30, 2002 to the
               Reimbursement agreement for Uncommitted Letter of Credit Facility
               between Credit Suisse First Boston, New York Branch dated
               January 18, 2002.

b.     Financial  Statement  Schedules

Included  are  the separate condensed consolidated financial statements of Foods
Holdings  filed  in accordance with rule 3-10 of Regulation S-X.  Foods Holdings
is  a  guarantor  of  the  Company's  credit  facility  and all of the Company's
outstanding  publicly  held  debt.

c.     Reports  on  Form  8-K

A Form 8-K was filed on January 25, 2002, related to the Company's new President
and  Chief  Executive  Officer.

































SIGNATURE

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


                                                  BORDEN  CHEMICAL,  INC.




Date: May  14,  2002                              By /s/ William H. Carter
                                                  William  H.  Carter
                                                  Executive  Vice  President and
                                                  Chief  Financial  Officer
                                                  (Principal  Financial Officer)





































































                           SUMMARY  OF  TERMS  OF  EMPLOYMENT  FOR
                                      CRAIG  MORRISON
                                 Revised  January  4,  2002




Title:                President  and  CEO,  Borden  Chemical,  Inc reporting  to
                      the Board of Directors  of  BCI.

Start  Date:          An  announcement  is  planned for mid-January with a start
                      date during  March.  Press  release  and  internal
                      announcements will be prepared for your  review.

Location:             Headquarters  is located in Columbus, OH.  Relocation is
                      provided under the BCI  relocation program, including home
                      sale and home purchase assistance.  The program  provides
                      for management of the sale process and purchase of your
                      former home based on the average of two or three
                      appraisals. In the event the gross selling  price
                      is below your original purchase price of $1,515,000,
                      Borden will make  up  the difference  up  to  $250,000.

                      To facilitate your relocation, you will receive $8,300 per
                      month for up to 6  months  for  temporary  living  and
                      travel expenses. There is a personal tax benefit  for
                      submitting  receipts  for documented expenses, such
                      as a temporary apartment living and air transportation.
                      You have the option of applying all or part  of the
                      monthly amount toward a mortgage payment if you elect to
                      purchase a residence  in  Columbus  prior  to  selling
                      your  New  Canaan  home.

                      To  address  the  housing  loan  currently  provided
                      by Alcan, an interest free $200,000 bridge loan
                      would also be provided until your Connecticut home
                      is sold. In addition, if you elect to purchase a home
                      on Columbus prior to selling  your  New Canaan  home,
                      Borden will provide you with a second interest
                      free  bridge  loan  for  $200,000.  Both  loans  are
                      due  upon the sale of your Connecticut  residence.
                      It is anticipated that you will relocate to Columbus
                      by August  1,  2002.

Base  Salary:         $500,000  annually  with  a  review  each  year,
                      beginning  in March 2003

Bonus Opportunity:    Participation  in  the annual BCI incentive program at a
                      target  of 70% of base salary; participation during the
                      first year will be based on  total  year  results,  but
                      will be pro-rated to reflect the period worked; awards are
                      authorized by the Compensation Committee of the Board and
                      are made based  on  achievement against financial targets
                      (EBITDA and ROGI) and business metrics;  the  opportunity
                      can  reach  up to a 200% payout based on performance
                      exceeding targets.

Equity Investment     The  long-term  incentive  plan has been designed to have
                      highly attractive rewards for  achieving the  BCI business
                      plan. In your case, you will have an opportunity to invest
                      $500,000  in shares of BCI stock at a purchase price of
                      $2.25  per  share.  A  portion  of your investment may be
                      financed through Fifth Third  Bank,  which  has  an
                      attractive  program  for equity plan participants.

                      Based  on  your  investment of  $500,000, you will receive
                      222,222 shares. Additionally,  you  will  receive  210,667
                      options with a strike price of $2.25. These options, along
                      with  your equity investment, are targeted to generate a
                      pre-tax return of $2.0 MM if the base business plan is
                      achieved over a five-year period.  Your  investment  is
                      requested  prior to beginning your Borden career. Once you
                      invest,  options  will  vest  and the shares will become
                      unrestricted ratably  over  five  years.

                      You  will be granted "Performance Options" with a 2006
                      target value of $4.0 MM  based on meeting agreed upon
                      EBITDA goals and a strike price of $2.25.  When EBITDA
                      reaches $170 MM 33% of the options will vest, when EBITDA
                      reaches $190 MM the next 33% will vest, and when EBITDA
                      reaches $210 MM you will be 100% vested. These performance
                      targets assume normal capital expenditures and exclude the
                      impact  of  acquisitions and dispositions.  These goals
                      would be adjusted at the time  significant  capital
                      expenditures  or  transactions  are  approved.

                      In  addition,  1,058,201  shares  of  restricted stock
                      will be granted at a price  of  $2.25 per share.
                      All of these shares will become unrestricted (vest) upon
                      the completion of your third full year at Borden Chemical.
                      One half (50%) of  these  shares will be liquid at the
                      time of vesting.  The remaining 50% will be liquid at the
                      end of your fourth full year. After your third anniversary
                      with the company, you may choose to sell your vested
                      shares to the company. The value you receive would be
                      determined by applying a multiple of 7.6 times the
                      trailing 12-month EBITDA.  The  value  would  be  set
                      at the time you request your first payment.  Any
                      subsequent payments would be made using the same
                      valuation.  Prior to  a  regular  liquidity event,
                      shares  may be sold up to a total value of $2 million.

                      Assuming  BCI's  strategic  plan  is  achieved,  the
                      total  value  of  the restricted  shares  is  estimated
                      to  be  $6.0 million in 2006.  If the company terminates
                      you for reasons other than cause, one third of your shares
                      will be treated  as unrestricted upon the completion of 12
                      months of employment and will be  purchased  by  the
                      company by applying a multiple of 7.6 times the trailing
                      12-month  EBITDA.  Thereafter,  the remaining shares
                      become unrestricted in four equal  installments  at the
                      completion of 18 months, 24 months, 30 months and 36
                      months of  service.

                      In  the event you die or become totally disabled while
                      participating in the equity  plan,  you  become
                      fully  vested  in  each  component  of  the  plan.

                      In  the  event  that the return on your equity plan
                      investment is negative, due  solely  to  the existence
                      of a preexisting material condition or liability, which
                      as  part  of or in combination with Other Net Liabilities
                      significantly exceeds  the  dollar  amounts for Other Net
                      Liabilities included in the attached projections,  the
                      Company will purchase your investment at a price equal
                      to your initial  investment.  In the event this occurs,
                      the proceeds from the repurchase of  shares  from  your
                      original investment will be included in the return of the
                      $500,000.  Your unvested options and restricted shares
                      will be cancelled at that time.

                      Taken  together,  the  core  equity  plan,  the
                      "Performance Options", the restricted  shares, and the
                      dividends on the shares owned provide an opportunity
                      to  earn  approximately  $12.7  MM  if  strategic  plan
                      goals  are  met.  This opportunity  is  over  25  times
                      your  investment.

                      Note:  You will  receive  formal  equity  plan offering
                      documents prior to making  your  investment.  These
                      documents govern administration of the plan and
                      will  supercede this  summary.

Perquisite Allowance: A  cash  allowance of $40,000 will be paid annually
                      to cover perquisites of your  choosing.  Typical
                      uses  include  a car lease, country club, dining club,
                      etc.   The  2002  payment  of  $40,000 will be made
                      at your start of employment.

Benefits:             Summary: You  will receive  a  detailed  summary  of  BCI
                      benefits at an orientation  by Judy Sonnett, VP HR BCI,
                      upon your hire; highlights of the plans are  noted
                      below with actual benefits subject to the terms and
                      conditions of the individual  plan  documents,  including
                      vesting  and  eligibility  periods.

                      Medical:  Provided  through  the Borden, Inc. Total Family
                      Protection Plan. Current  coverage  choices  are  a  PPO
                      or  an  HMO.

                      Dental:  Provided  through  the  Borden, Inc. Total
                      Family Protection Plan. Current  coverage  choices
                      are  a  scheduled  benefit  plan  or  an  R&C  plan.

                      Pension  Plan:  Pension  benefits  are  provided  under
                      the  Borden,  Inc. Employees  Retirement  Income Plan,
                      a cash account plan.  The plan formula is 3% up  to  the
                      Social Security Wage Base and 6% over the Social Security
                      Wage Base (the  2002  SSWB  is  $84,900).

                      401K  Savings:  Savings  plan  benefits are provided
                      under the Borden, Inc. Retirement  Savings  Plan.  The
                      company  match  is $1.00 for each dollar on the first
                      5%  of  employee  contributions.

                      SERP:  Pension  and  savings  plan benefits for
                      salary in excess of the IRS Annual  Plan  Compensation
                      Limit  are provided under the Borden, Inc. Executive
                      Supplemental  Pension  Plan.  (2002  IRS  Annual
                      Plan  Compensation  Limit  is $200,000).

                      Life  Insurance:  Basic  life  coverage  is  two
                      times  benefits pay at an employee  cost  of  9  1/2
                      for  each  $1,000  of  coverage.  You  may  purchase
                      supplemental  insurance  coverage  if  desired.

                      Disability:  Salary  Continuance  coverage  is provided;
                      benefit is company paid.  Long Term Disability coverage
                      with a replacement ratio of 60% on $200,000 of  income.

                      Vacation:  4  weeks.

Alcan  Incentive
Treatment:            In  the  event  that  Alcan  does not make an incentive
                      payment for 2001 or makes  a  substantially  reduced
                      payment,  Borden  will  make up the difference between
                      the  payment  and  your  target. Targeted payment is 30%
                      of base pay or $108,000.  You  have  the responsibility
                      of negotiating in good faith with Alcan for  payment  of
                      the  2001  bonus.

Severance:            In  the  event you are terminated by the company for
                      reasons other than for cause,  you  would  be eligible
                      to receive severance for 18 months based on your
                      monthly  base  salary  in  effect  at  that  time.

Employment
Relationship:         You  will  be  an  employee of BCI and will receive
                      a letter confirming the terms  outlined in  this  summary.

Pre-employment:       All  BCI  employees  are required to successfully
                      complete a pre-employment drug  screening  and  background
                      check;  Judy Sonnett will make the appropriate
                      arrangements.

Transition:           Bob  Kidder and the Board are eager to work with you
                      on a smooth transition.



Offered:      /s/  C.R.Kidder                              1/05/02
             --------------------         Date:  -----------------------
              C.   Robert  Kidder

              /s/  Craig  Morrison                         1/07/02
Accepted:    --------------------        Date:  -----------------------
                   Craig  Morrison





























                                 FIRST AMENDMENT
                           Dated as of March 27, 2002

     This  FIRST  AMENDMENT is between CREDIT SUISSE FIRST BOSTON, a Swiss bank,
acting  through  its  New  York  Branch  (the "BANK"), and BORDEN CHEMICAL, INC.
(formerly known as Borden, Inc.), a New Jersey corporation (the "APPLICANT") and
amends  the  REIMBURSEMENT  AGREEMENT  dated as of January 18, 2002 (as amended,
supplemented  or  modified  from  time  to  time, the "REIMBURSEMENT AGREEMENT")
entered  into  between  the  Bank  and  the Applicant.  Unless otherwise defined
herein, the terms defined in the Reimbursement Agreement shall be used herein as
therein  defined.

                             PRELIMINARY STATEMENTS:
     The  Applicant  has  requested  that  the  Bank  amends  the  Reimbursement
Agreement,  and  the  Bank  has  agreed to amend the Reimbursement Agreement, as
hereinafter  set  forth.

     SECTION  1.  Amendment  to Reimbursement Agreement.  The Reimbursement
                  -------------------------------------
Agreement,is,  effective  as  of the  date  hereof, hereby amended  as  follows:

     (a)     The  definition  "Maximum  Facility  Amount"  in  Section  1.01
of  the Reimbursement  Agreement  is  amended  by  deleting  it  in  its
entirety  and substituting  therefor  the  following:

     ""MAXIMUM  FACILITY  AMOUNT"  means  $45,000,000."

     SECTION  2.  Representations  and  Warranties.  The Borrower represents and
                  --------------------------------
warrants  as  follows:

     (a)     All  of  the representations and warranties contained in Article IV
of  the  Reimbursement  Agreement  and  in the other Loan Documents are true and
complete  in  all  material  respects.

     (b)     No Event of Default nor event which with the giving of notice or
passage of  time  would constitute an Event of Default have occurred and are
continuing.

     SECTION  3.  Reference  to and Effect on the Loan Documents.  (a)  Upon the
                  ----------------------------------------------
effectiveness  of  this  First  Amendment,  on  and  after  the date hereof each
reference  in  the  Reimbursement  Agreement  to  "this Agreement", "hereunder",
"hereof"  or  words of like import referring to the Reimbursement Agreement, and
each  reference  in  the  other Loan Documents to "the Reimbursement Agreement",
"thereunder",  "thereof"  or words of like import referring to the Reimbursement
Agreement,  shall  mean  and  be  a  reference to the Reimbursement Agreement as
amended  hereby.







































     (b)  Except  as  specifically amended above, the Reimbursement Agreement
and all other  Loan Documents, are and shall continue to be in full force and
effect and are  hereby  in  all  respects  ratified  and  confirmed.

     (c)  The  execution,  delivery  and  effectiveness of this First Amendment
shall not,  except  as  expressly  provided  herein, operate as a waiver of
any right, power  or  remedy  of the Bank under any of the Loan Documents,
nor constitute a waiver  of  any  provision  of  any  of  the  Loan  Documents.

     SECTION  5.  Execution in Counterparts.  This First Amendment may be
                  ---------------------------
executed in any  number  of  counterparts  and  by  different  parties
hereto  in  separate counterparts, each of which when so executed and
delivered shall be deemed to be an  original  and  all  of which taken
together shall constitute but one and the same  agreement.

     SECTION  6.  Governing Law. This First Amendment shall  be governed by, and
                  --------------
construed  in  accordance  with,  the  laws  of  the  State  of  New  York.

     IN  WITNESS  WHEREOF,  the parties hereto have caused this First Amendment
to be executed  as  of  the  date  first  above  written.




                                       Applicant:

                                       BORDEN  CHEMICAL,  INC.

                                       By:
                                          ----------------------
                                       Name:
                                       Title:


                                       Bank:

                                       CREDIT  SUISSE  FIRST  BOSTON,  NEW  YORK
                                       BRANCH
                                       By:
                                          -----------------------
                                       Name:
                                       Title:

                                       By:
                                          -----------------------
                                       Name:
                                       Title:







































                                SECOND AMENDMENT
                           Dated as of April 30, 2002
     This  SECOND AMENDMENT is between CREDIT SUISSE FIRST BOSTON, a Swiss bank,
acting  through  its  New  York  Branch  (the "BANK"), and BORDEN CHEMICAL, INC.
(formerly known as Borden, Inc.), a New Jersey corporation (the "APPLICANT") and
amends  the REIMBURSEMENT AGREEMENT dated as of January 18, 2002 (as amended and
restated  by  that  certain  First  Amendment  dated  as  of March 27, 2002, the
"REIMBURSEMENT  AGREEMENT")  entered  into  between  the Bank and the Applicant.
Unless  otherwise  defined  herein,  the  terms  defined  in  the  Reimbursement
Agreement  shall  be  used  herein  as  therein  defined.

                             PRELIMINARY STATEMENTS:

     The  Applicant  has  requested  that  the  Bank  amends  the  Reimbursement
Agreement,  and  the  Bank  has  agreed to amend the Reimbursement Agreement, as
hereinafter  set  forth.
     SECTION  1.  Amendment  to Reimbursement Agreement.  The Reimbursement
                  -------------------------------------
Agreement is,  effective  as  of  the  date  hereof,  hereby  amended
as  follows:

     (a)     The  definition  "Maximum  Facility  Amount"  in  Section
1.01  of  the Reimbursement  Agreement  is  amended  by  deleting  it  in
its  entirety  and substituting  therefor  the  following:

          ""MAXIMUM  FACILITY  AMOUNT"  means  $85,000,000."
     SECTION  2.  Representations  and  Warranties.  The Borrower represents and
                  --------------------------------
warrants  as  follows:

     (a)     All  of  the representations and warranties contained in Article IV
of  the  Reimbursement  Agreement  and  in the other Loan Documents are true and
complete  in  all  material  respects.

     (b)     No Event of Default nor event which with the giving of notice
or passage of  time  would constitute an Event of Default have occurred
and are continuing.

     SECTION  3.  Reference  to and Effect on the Loan Documents.  (a)  Upon the
                  ----------------------------------------------
effectiveness  of  this  Second  Amendment,  on  and  after the date hereof each
reference  in  the  Reimbursement  Agreement  to  "this Agreement", "hereunder",
"hereof"  or  words of like import referring to the Reimbursement Agreement, and
each  reference  in  the  other Loan Documents to "the Reimbursement Agreement",
"thereunder",  "thereof"  or words of like import referring to the Reimbursement
Agreement,  shall  mean  and  be  a  reference to the Reimbursement Agreement as
amended  hereby.






































     (b)  Except  as  specifically amended above, the Reimbursement Agreement
and all other  Loan Documents, are and shall continue to be in full force and
effect and are  hereby  in  all  respects  ratified  and  confirmed.

     (c)  The  execution,  delivery  and effectiveness of this Second Amendment
shall not,  except  as  expressly  provided  herein, operate as a waiver of any
right, power  or  remedy  of the Bank under any of the Loan Documents, nor
constitute a waiver  of  any  provision  of  any  of  the  Loan  Documents.

     SECTION 5.  Execution in Counterparts. This Second Amendment may be
                  -------------------------
executed in any  number  of  counterparts  and  by  different  parties
hereto  in  separate counterparts, each of which when so executed and
delivered shall be deemed to be an  original  and  all  of which taken
together shall constitute but one and the same  agreement.

     SECTION  6.  Governing  Law.  This  Second  Amendment  shall be governed
                  ----------------
by, and construed  in  accordance  with,  the  laws  of  the  State  of
New  York.

     IN  WITNESS  WHEREOF, the parties hereto have caused this Second Amendment
to be executed  as  of  the  date  first  above  written.

                                             Applicant:

                                             BORDEN  CHEMICAL,  INC.
                                             By:
                                                 --------------------------
                                             Name:
                                             Title:


                                             Bank:

                                             CREDIT  SUISSE  FIRST  BOSTON,
                                             NEW  YORK  BRANCH
                                             By:
                                                 --------------------------
                                             Name:
                                             Title:


                                             By:
                                                ---------------------------
                                             Name:
                                             Title:















































BORDEN  FOODS  HOLDINGS  CORPORATION

CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
FOR  THE  THREE  MONTHS  ENDED
MARCH  31,  2002  AND  2001















































































CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
AND  COMPREHENSIVE  INCOME  (UNAUDITED)


BORDEN FOODS HOLDINGS CORPORATION

                                                                                             
                                                                                    Three Months Ended
(In thousands, except per share and share amounts)                            March 31,             March 31,
- ----------------------------------------------------------------------------------------------------------
                                                                                2002                 2001
                                                                            ----------          ----------

General & administrative expense                                            $  1,583                  250
                                                                            ----------           ---------
Operating loss                                                                (1,583)                (250)

Interest income                                                               (4,363)              (3,263)
                                                                            ----------           ---------

Income from continuing operations
     before income taxes                                                       2,780                3,013
Income tax expense                                                             1,084                1,175
                                                                            ----------           ---------
Income from continuing operations                                              1,696                1,838

Discontinued operations (See Note 2):
     Income (loss) from operations, net of tax                                 8,913               (8,190)
                                                                            ----------           ---------


Net income (loss)                                                           $ 10,609               (6,352)

Affiliate's share of income (loss) (See Note 3)                                  -                     (5)
                                                                            ----------           ---------

Net income (loss) applicable to common shares                               $ 10,609            $  (6,357)
                                                                             =========            ========
Comprehensive Income (Loss) (See Note 4)                                    $ 10,609            $  (9,566)
                                                                             =========            ========

Per Share Data
- ------------------
Basic and diluted earnings (loss) per common share                          $106,090            $ (63,570)
                                                                             =========            ========

Average number of common shares outstanding
  during the year                                                                100                  100
- --------------------------------------------------------------------------------------------------------------

See accompanying Notes to the Condensed Consolidated Financial Statements.

































CONDENSED  CONSOLIDATED  BALANCE  SHEETS  (UNAUDITED)


BORDEN FOODS HOLDINGS CORPORATION
                                                                                   
(In thousands except per share and share amounts)
                                                                             March 31,   December 31,
                                                                               2002           2001
- --------------------------------------------------------------------------------------------------------

ASSETS

  ASSETS
    Cash and equivalents                                                     $  292,422     $  434,444
    Loans receivable from affiliates                                            313,652        176,685
    Net assets held for sale (See Note 7)                                         9,687          9,749
    Deferred income taxes                                                         1,504          1,442
    Other assets                                                                 24,685         14,478
                                                                             ----------      ----------

  TOTAL ASSETS                                                               $  641,950     $  636,798
                                                                             ==========      ==========


LIABILITIES AND SHAREHOLDER'S EQUITY

  LIABILITIES
    Accounts and drafts payable                                              $      257     $      251
    Income tax payable                                                            3,127          1,142
    Other liabilities                                                             5,015         12,463
                                                                             ----------      ----------
                                                                                  8,399         13,856

  COMMITMENTS AND CONTINGENCIES (SEE NOTE 6)

  SHAREHOLDER'S EQUITY
    Common stock - $0.01 par value; 100 shares
      authorized, issued, and outstanding                                           -              -
    Paid in capital                                                             423,104        423,104
    Shareholder's investment in affiliates                                      201,417        201,417
    Retained earnings (accumulated deficit)                                       9,030         (1,579)
                                                                             ----------      ----------
                                                                                633,551        622,942
                                                                             ----------      ----------

  TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                                 $  641,950     $  636,798
                                                                             ==========      ==========
- --------------------------------------------------------------------------------------------------------
See accompanying Notes to the Condensed Consolidated Financial Statements.






































CONDENSED  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (UNAUDITED)


BORDEN FOODS HOLDINGS CORPORATION
                                                                                               
                                                                                       Three Months Ended
(In thousands except per share and share amounts)                                           March 31,
                                                                                        2002       2001
- -----------------------------------------------------------------------------------------------------------

  CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
    Net income (loss)                                                               $   10,609   $   (6,352)
    Adjustments to reconcile net income (loss) to
    net cash from (used in) operating activities:
         Depreciation and amortization                                                    -           8,794
         Deferred tax benefit                                                              (62)      (6,948)

    Net change in assets and liabilities:
      Trade receivables                                                                   -         16,879
      Inventories                                                                         -          4,340
      Trade payables                                                                         6      (4,426)
      Accrued customer allowances                                                         -          1,303
      Income tax payable                                                                 1,985        (862)
      Other assets and liabilities                                                     (17,593)    (12,606)
                                                                                      ---------   ----------
                                                                                        (5,055)        122
                                                                                      ---------   ----------

  CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
    Capital expenditures                                                                  -         (3,485)
                                                                                      ---------   ----------

  CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
    Net short-term debt borrowings                                                        -            720
    Repayment of loans due to affiliates                                                  -            (65)
    Loans receivable from affiliates                                                  (136,967)          -
    Repayment of capital lease obligations                                                -            (54)
                                                                                      ---------   ----------
                                                                                      (136,967)        601
                                                                                      ---------   ----------

  DECREASE IN CASH AND EQUIVALENTS                                                    (142,022)     (2,762)

  CASH AND EQUIVALENTS AT BEGINNING
    OF PERIOD                                                                          434,444     222,374
                                                                                      ---------   ----------

  CASH AND EQUIVALENTS AT END
    OF PERIOD                                                                       $  292,422   $ 219,612
                                                                                      =========   ==========
- -----------------------------------------------------------------------------------------------------------
See accompanying Notes to the Condensed Consolidated Financial Statements.



































- --------------------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS  (UNAUDITED)  (CONTINUED)


BORDEN FOODS HOLDINGS CORPORATION

                                                                                             
                                                                                     Three Months Ended
(In thousands except per share and share amounts)                                         March 31,
                                                                                        2002     2001
- --------------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

  Cash (received) paid:
    Interest                                                                        $  (1,941)  $   61
    Income taxes, net of refunds                                                          282    1,209
- --------------------------------------------------------------------------------------------------------

See accompanying Notes to the Condensed Consolidated Financial Statements.



































































- -----------------------------------------------------------------------------------------------------------
CONDENSED  CONSOLIDATED  STATEMENTS  OF  SHAREHOLDER'S  EQUITY  (UNAUDITED)
                                                                         
BORDEN  FOODS  HOLDINGS  CORPORATION


(In  thousands  except  per  share  and  share  amounts)
- -----------------------------------------------------------------------------------------------------------
                                                      Shareholder's     Retained     Accumulated
                                           Paid in     Investment       Earnings     Translation
                                           Capital    in Affiliates     (Deficit)    Adjustments     Total
- -----------------------------------------------------------------------------------------------------------
Balance at December 31, 2001           $   423,104  $  201,417      $ (1,579)      $    -         $ 622,942
- -----------------------------------------------------------------------------------------------------------
Net income and comprehensive income                                   10,609
                                                                                                     10,609

Balance at March 31, 2002              $   423,104  $  201,417      $  9,030       $    -         $ 633,551
- -----------------------------------------------------------------------------------------------------------


See  accompanying  Notes  to  the  Condensed  Consolidated Financial Statements.




























































BORDEN  FOODS  HOLDINGS  CORPORATION
NOTES  TO  THE  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS  (UNAUDITED)
(Dollars  in  thousands)


1.  BACKGROUND  AND  BASIS  OF  PRESENTATION

In  1994,  Borden,  Inc.  ("Borden") entered into an agreement providing for the
acquisition  ("Acquisition")  of  all  of  Borden's  outstanding common stock by
affiliates  of  Kohlberg  Kravis  Roberts  &  Co.  ("KKR").  The Acquisition was
completed on March 14, 1995. On November 24, 2001, Borden merged with its wholly
owned subsidiary, Borden Chemical, Inc. ("the Merger").  In conjunction with the
Merger,  Borden,  Inc.,  the  surviving  corporation, changed its name to Borden
Chemical,  Inc ("BCI"). BCI, a public registrant as a result of public debt that
was  outstanding  prior  to  the  Acquisition,  elected  not  to apply push down
accounting  in  its  consolidated  financial  statements  and,  as  such,  BCI's
consolidated  financial  statements are reported on BCI's historical cost basis.
The  accompanying  consolidated  financial  statements  have  been prepared on a
purchase accounting basis from the date of KKR's acquisition of BCI, and include
the  accounts  of  all  majority-owned  subsidiaries  including  Borden  Foods
Corporation  ("BFC")  and  BFC  Investments,  LP  (the  "Investment  LP").  All
significant  intercompany  transactions  have  been  eliminated.

In 1996, BCI, in a taxable transaction, sold certain food businesses and certain
trademarks  to  Borden  Foods  Holdings  Corporation  ("Foods  Holdings"  or the
"Company").  The purchase price was based on a third party valuation.  There was
no  change  in  the  book  basis  of assets and liabilities because the sale was
between  related  parties  and BCI's principal stockholders continued to control
the  Company.  Within  the  terms  of  the  sale,  Foods  Holdings  fully  and
unconditionally  guaranteed  obligations under BCI's Credit Agreement and all of
BCI's  publicly  held  debt  on a pari passu basis (see Note 5).  As a result of
this financial guarantee and in accordance with Regulation S-X rule 3-10, BCI is
required  to  include in its filings with the Securities and Exchange Commission
separate  financial  statements  for  Foods Holdings as if it were a registrant.

Foods Holdings, a wholly owned subsidiary of Borden Foods Holdings, LLC ("LLC"),
owns  approximately 98% of BFC.  The remaining interest in BFC is owned directly
by  the  LLC.  In  connection  with  the  formation  of  Foods Holdings, the LLC
transferred  notes to Foods Holdings in exchange for 100 shares of common stock.
Foods  Holdings  used  the notes to acquire a 98% interest in BFC.  LLC directly
contributed  cash  to  BFC  in  exchange  for  the remaining 2% interest in BFC.

In  a series of transactions in 1996 and 1997, BFC purchased a majority interest
in  Investment LP and LLC acquired the remaining minority interest in Investment
LP.  At  such  time,  Investment  LP transferred certain consideration to BCI in
exchange  for  Foods' trademarks.  The portion of BFC and Investment LP directly
owned  by  LLC  is  recorded  in  Shareholder's  Investment  in  Affiliates.

After  review  of  the  strategic  alternatives  for the Company, a decision was
reached  in  the  second  quarter of 2001 to exit the Food business.  During the
third quarter of 2001, the Company completed the sales of essentially all of its
business  operations  (see  Note  2).  Accordingly,  the  majority  of  Foods'
operations  are  reflected  as  a  discontinued  operation for all periods.  The
Company's  continuing  operations  include  the  payment  of management fees and
investing  available cash.  The Company will also continue to sell its remaining
assets,  collect  receivables  and  settle  payables related to the discontinued
operations.  Prior  to  sales  of  the Foods business, the Company was a leading
producer  and marketer of a variety of food products worldwide, including pasta,
pasta  sauce,  bouillon,  dry  soups  and  shelf  stable  meals.

Certain  prior  year  amounts  have  been  reclassified  to  conform to the 2002
presentation.


2.  DISCONTINUED  OPERATIONS

During  the  second  quarter  of  2001,  the  Company  entered  into  definitive
agreements  to  sell  its pasta sauce, bouillon and dry soups businesses to H.J.
Heinz Company ("Heinz") and to sell seven pasta brands to American Italian Pasta
Company  ("AIPC").  The  Company  also  implemented a plan to sell its remaining
pasta brands and shelf stable meals businesses.  The measurement date applicable
to  each  of  these  sales was May 31, 2001.  The Company completed the sales to
Heinz  and  AIPC  on  July  16,  2001.  On  July  30, 2001, the Company sold its
remaining  pasta business to New World Pasta Company.  The Company completed the
sale  of its shelf stable meals business to Kraft Foods Holdings, Inc. on August
27, 2001.

All  remaining  facilities,  equipment, and furniture of the Company were marked
down  to  fair  market  value and are included in net assets held for sale.  The
Company  recorded transaction reserves for severance, certain employee benefits,
selling and legal fees, transition services and contract terminations related to
discontinued  operations  at  the  time of such sales.  As of March 31, 2002 and
December  31,  2001,  reserves  of  $2,159 and $7,550, respectively, remained in
other  liabilities.  Additionally,  $357  and  $4,205  of incentive compensation
remained  in  other  liabilities  at  March  31,  2002  and  December  31, 2001,
respectively.

On  March  9, 2002, the President signed the "Job Creation and Worker Assistance
Act  of 2002" into law.  This law extends the carryback period from two years to
five  years for net operating losses arising in the 2001 and 2002 taxable years.
As  a result, a valuation allowance of $8,913 was recorded in the fourth quarter
of  2001  for  the  balance  of  the  2001  net  operating loss.  This valuation
allowance  was  released  in the first quarter of 2002 and is reported as income
from  discontinued  operations  in  the 2002 Condensed Consolidated Statement of
Operations  and  Comprehensive  Income.

These  discontinued  businesses  generated  a  pre-tax  loss  from operations of
$13,142  from net sales of $149,886 during the three months ended March 31, 2001
and  income  tax  benefit  from  operations of $4,952 for the three months ended
March  31,  2001.

The  Company  established  reserves  for  workforce  reductions,  closure  of
facilities,  selling  and legal fees, contract terminations, transition services
and other costs related to the divestiture of these unaligned businesses.  As of
March  31,  2002  and  December 31, 2001, reserves related to the divestiture of
unaligned  businesses  of  $269  remained  in  other  liabilities.

3.  AFFILIATE'S  SHARE  OF  INCOME  (LOSS)

In  accordance  with  Investment  LP's  limited  partnership  agreement with the
Company  and  LLC, the first allocation of a trademark gain was to the Company's
priority  return, which was a return of 10% per annum, cumulative and compounded
annually  on  the  Company's  net  capital  contributions. The allocation of the
remaining  gain, computed on a tax basis, was 10% to the Company and 90% to LLC.
After  giving  effect  to  all  special allocations specified by the partnership
agreement,  net  income  or  loss was allocated to the partners in proportion to
their  respective percentage interests. Due to the sales of substantially all of
the  Company's  assets in the third quarter of 2001, the Company no longer holds
trademarks and as such, no longer receives trademark gains. For the three months
ended  March  31,  2001,  LLC  was  allocated  an  affiliates share of loss (see
accompanying  Statements  of  Operations)  of  $5.


4.  COMPREHENSIVE  INCOME  (LOSS)

Comprehensive  income  (loss)  was  computed  as  follows:



                                                                    
                                                           Three months ended March 31,
                                                                 2002          2001
                                                         -------------------------------
Net income (loss)                                             $ 10,609     $  (6,352)
Foreign currency translation adjustments                          -           (3,214)
                                                              ---------    ----------
                                                              $ 10,609     $  (9,566)
                                                              =========    ==========
                                                         -------------------------------



5.  RELATED  PARTIES

BCI  provides  certain  administrative services, such as rental of office space,
telephone  support  and  postage  to the Company at negotiated fees.  The amount
owed  by  the  Company  for reimbursement of such services was $838 at March 31,
2002  and  $242  at  December  31,  2001.

Eligible  U.S.  employees  were provided employee pension benefits under the BCI
domestic  pension plan and could participate in the BCI retirement savings plan.
The Company provided BCI with contributions for these benefits, certain of which
were  determined  by  BCI's  actuary.  The  Company's  portion  of these benefit
liabilities  was  considered to be an amount due to affiliate since BCI retained
the  legal  obligation for these benefits.  The Company provided payment for its
portion  of  the  net pension liability of $11,132 during the three months ended
March  31,  2001.  There was no amount payable by the Company for its portion of
the  net  pension  liability  as  of  March  31,  2002  and  December  31, 2001.

In  the fourth quarter of 2001, subsequent to the sale of the Company's business
operations  (see  Note  2), the Company paid BCI $12,302 to assume the liability
for  payment  of  claims  made  under  essentially all of the Company's employee
benefit  plans,  including  group and general insurance and other administrative
services.  Benefits  covered  by  this  agreement  include  the employee pension
benefits and retirement savings plan benefits mentioned above as well as retiree
medical  and  life  insurance  benefits  and any remaining claims made under the
Company's  medical  and  dental  benefit plans.  The Company was owed $173 as of
March  31,  2002  and  $125  as  of  December  31,  2001  primarily from BCI for
reimbursement  of payments relating to group insurance and worker's compensation
made  by  the  Company  on  BCI's  behalf.



The  following summarizes the affiliate charges and reimbursements for the three
months  ended  March  31,  2002  and  2001:




- -------------------------------------------------------------------
                                           THREE MONTHS ENDED
                                                MARCH 31,
                                           -------------------
                                            2002          2001
                                           ------        ------
                                                   

     Employee  benefits                  $    -       $   843
     Group  and  general  insurance           -            -
     Administrative services                 120          912
                                          --------    --------
                                         $   120      $ 1,755
                                          =========   ========
- --------------------------------------------------------------------



Prior  to  the sale of the Company's business operations in the third quarter of
2001,  the  Company performed certain administrative services on behalf of other
BCI  affiliates.  These  services  included  customer  service,  purchasing  and
quality  assurance.  The Company charged these affiliates $116 for such services
for  the  three  months ended March 31, 2001.  There were no amounts outstanding
for  these  services  at  December  31,  2001.

The Company invests cash with BCI.  The Company's investment balance was $73,050
at  March  31,  2002  and  $78,550 at December 31, 2001.  The funds are invested
overnight  earning  a  rate  set by BCI that generally approximates money market
rates.  The  Company  also  had short-term loans outstanding that were issued to
other affiliates of the Company's parent totaling $313,652 at March 31, 2002 and
$176,685 at December 31, 2001.  The Company earned interest income of $3,042 and
$3,224  on  these  funds  for  the  three  months ended March 31, 2002 and 2001,
respectively.  Amounts  receivable  for interest were $2,051 and $5 at March 31,
2002  and  December  31,  2001,  respectively.

Borden Capital, Inc. (Capital) continues to provide executive, financial and
strategic management to the Company for which it charges an annual fee of
$5,000. Prior to 2002,  this  annual  fee was $1,000. At March 31, 2002 the
Company had $2,096 of payables  due  to  affiliates,  primarily  to
Capital  for this management fee, recorded  in  other  liabilities.  At
December 31, 2001, this payable was $242.


6.  COMMITMENTS  AND  CONTINGENCIES

Legal  Matters
- --------------

The  Company is involved in certain legal proceedings arising through the normal
course  of  business.  Management  is  of the opinion that the final outcomes of
such  proceedings  should not have a significant impact on the Company's results
of  operations  or  financial  position.


7.  SUBSEQUENT  EVENT

On  April 25, 2002, the Company sold property, plant and equipment that was held
for  sale  in  exchange  for net cash proceeds of $5,478, which approximates net
book  value.