LANXESS Solutions US (CEMJQ) 8-K Crompton Announces $40 Million Cost-reduction Initiative

Crompton

                                                       NEWS

CONTACTS:

Investors:      William Kuser         (203) 573-2213

Media:         Mary Ann Dunnell     (203) 573-3034

CROMPTON REPORTS THIRD QUARTER RESULTS

MIDDLEBURY, CT October 22, 2003 - Crompton Corporation (NYSE: CK) reported today third quarter net earnings of $80.2 million, or $.72 per share, compared to net earnings of $12.6 million or $.11 per share, in the third quarter of 2002. Discontinued operations for the current quarter included a gain of $111.7 million, or $1.00 per share, relating to the sale of the organosilicones business ("OSi") on July 31, 2003, and OSi earnings of $3.1 million, or three cents per share for the month of July. Discontinued operations for the third quarter of 2002 included OSi earnings of $14.9 million, or $.13 per share. The loss from continuing operations of $34.5 million, or $.31 per share, compared to a loss of $2.3 million, or two cents per share, for the third quarter of 2002. The loss from continuing operations for the third quarter of 2003 included pre-tax charges of $24.7 million for early extinguishment of debt, $10.6 million for facility closures, severance and related costs and $5.4 million for a ntitrust legal and related costs. The loss from continuing operations for the third quarter of 2002 included pre-tax charges of $4.4 million for facility closures, severance and related costs.

Third quarter sales from continuing operations of $559.2 million were 10 percent above the prior year with five percent attributable to the acquisition of the GE Specialty Chemicals business on July 31, 2003, three percent due to the favorable impact of foreign currency translation and the remainder due to the excess of improved unit volume over slightly lower selling prices.

"While we are pleased with the positive impact of the OSi transaction and our significant debt reduction during the quarter, we remain concerned about the persistent effect of high raw material and energy prices together they are the primary factors negatively impacting results," said Vincent A. Calarco, chairman, president and chief executive officer. "In this regard, we have taken proactive measures to reduce overhead costs and improve efficiencies with the $40 million cost reduction program announced today."

Nine month sales from continuing operations of $1.62 billion were one percent above the prior year while net earnings of $77 million, or $.68 per share, compared to a net loss of $285.9 million, or $2.52 per share, for 2002. Discontinued operations for the current nine months included a gain on the sale of the OSi business of $111.7 million, or $.99 per share, and OSi earnings of $26.3 million, or $.23 per share. Discontinued operations for the nine months of 2002 included OSi earnings of $33.7 million, or $.29 per share. The loss from continuing operations of $60.6 million, or $.54 per share, compared to a loss of $20.6 million, or $.18 per share, for the nine months of 2002. The loss from continuing operations for the nine months of 2003 included pre-tax charges of $26.3 million for antitrust legal and related costs, $24.7 million for early extinguishment of debt and $14.1 million for facility closures, severance and related costs. The loss from continuing operations for the nine months of 2002 inc luded pre-tax charges of $34.7 million for the loss on the sale of the industrial specialties business and $10.8 million for facility closures, severance and related costs.

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Third quarter operating results for the Company's reporting segments are summarized as follows:

Polymer Products

Polymer additives sales of $311.2 million were up nine percent from the prior year due primarily to the acquisition of GE's specialty chemicals business on July 31, 2003. Excluding the acquired business, the impact of favorable foreign currency translation of three percent was offset by a decline in unit volume of two percent and lower selling prices of one percent. Plastic additives sales were up 21% mainly as a result of the recent acquisition. Rubber additives sales declined 13% due mainly to reduced unit volume and lower selling prices. Urethane and petroleum additives sales each rose two percent due primarily to favorable foreign currency translation. Operating profit of $4.9 million was down 81% from the third quarter of 2002 due mainly to increased costs, lower selling prices and an unfavorable sales mix, partially offset by profit from the newly acquired business. Higher costs were mainly attributable to increased raw material/energy costs, higher allocated overhead and other expense s, and reduced plant throughput, offset in part by cost saving initiatives. The higher allocated overhead expenses were primarily due to a reallocation of costs previously absorbed by the OSi business sold on July 31, 2003.

Polymers sales of $74.7 million were up 11% from the prior year due to increased unit volume of 15% and favorable foreign currency translation of two percent, offset in part by reduced selling prices of six percent. EPDM sales rose 20% mainly as a result of higher unit volume, offset in part by lower selling prices. Urethanes sales were up two percent due primarily to favorable foreign currency translation. Operating profit of $6.4 million was down 40% from the prior year mainly as a result of lower EPDM selling prices and increased raw material/energy costs, offset in part by higher EPDM unit volume.

Polymer processing equipment sales of $38.2 million were up five percent from the third quarter of 2002 due to favorable foreign currency translation of four percent and improved pricing of two percent, offset in part by reduced unit volume of one percent. The operating loss of $.3 million was favorable versus the prior year by $6.1 million due mainly to the absence of a prior year warranty claim settlement, lower operating expenses and favorable selling prices. The backlog at the end of September 2003 of $70 million was down $6 million from the end of 2002.

Specialty Products

Crop protection sales of $77.9 million were up 17% from the prior year due to higher unit volume of 13%, favorable foreign currency translation of three percent and increased selling prices of one percent. Operating profit of $17.0 million rose 12% from the prior year mainly as a result of increased unit volume, partially offset by the absence of prior year non-recurring income and higher allocated overhead expenses.

Other sales of $60.6 million were up seven percent from the third quarter of 2002 due to a three percent improvement in both selling prices and foreign currency translation and higher unit volume of one percent. The operating loss of $.2 million was unfavorable versus the prior year by $2.0 million due primarily to increased raw material costs and higher allocated overhead expenses, offset in part by increased selling prices.

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Discontinued Operations

Third quarter discontinued earnings in 2003 included one month of OSi results versus three months

in 2002. Such earnings from discontinued operations were $3.1 million (net of income taxes of $1.0 million) in 2003 and $14.9 million (net of income taxes of $3.7 million) in 2002. Earnings from discontinued operations include no allocation of general overhead expenses.

Crompton Corporation, with annual sales from continuing operations of approximately $2.1 billion, is

a producer and marketer of specialty chemicals and polymer products and equipment. Additional information concerning Crompton Corporation is available at www.cromptoncorp.com.

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Forward-Looking Statements

Certain statements made in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, general economic conditions, the outcome and timing of antitrust investigations and related civil lawsuits to which the Company is subject, pension and other post-retirement benefit plan assumptions, energy and raw material prices and availability, production capacity, changes in interest rates and foreign currency exchange rates, changes in technology, market demand and customer requirements, the enactment of more stringent environmental laws and regulations, and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. These statements are based on our estimates and assumptions and on currently available information. The forward-looking statements include information concerning our possible or assumed future results of operations, and the Company's actual results may differ significantly from the results discu ssed. Forward-looking information is intended to reflect opinions as of the date this release was issued and such information will not necessarily be updated by the Company.

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CROMPTON CORPORATION
Consolidated Statements of Operations
Third quarter and nine months ended 2003 and 2002
(In thousands, except per share data)
			Third Quarter				Nine Months Ended
			2003		2002		2003		2002
Net sales		$	559,189	$	507,936	$	1,624,062	$	1,610,507
Cost of products sold			410,254		349,377		1,189,849		1,127,611
Selling, general and admin.			91,504		87,875		263,604		265,404
Depreciation and amortization			30,318		27,232		84,816		85,902
Research and development			12,767		13,258		37,553		40,921
Equity (income) loss			1,073		793		(6,769)		(3,468)
Facility closures, severance and
related costs			10,566		4,420		14,071		10,800
Antitrust legal and related costs			5,385		-		26,260		-
Operating profit (loss)			(2,678)		24,981		14,678		83,337
Interest expense			20,664		25,201		72,938		77,431
Loss on early extinguishment of debt			24,699		-		24,699		-
Other expense, net			3,414		3,192		7,454		40,577
Loss from continuing operations before
income taxes and cumulative effect
of accounting change			(51,455)		(3,412)		(90,413)		(34,671)
Income tax benefit			(16,953)		(1,112)		(29,791)		(14,064)
Loss from continuing operations before
cumulative effect of accounting change			(34,502)		(2,300)		(60,622)		(20,607)
Earnings from discontinued operations			3,057		14,888		26,314		33,656
Gain on sale of discontinued operations			111,692		-		111,692		-
Cumulative effect of accounting change			-		-		(401)		(298,981)
Net earnings (loss)		$	80,247	$	12,588	$	76,983	$	(285,932)
Basic and diluted earnings (loss) per common share:
	Loss from continuing operations
	before cumulative effect of
	accounting change	$	(0.31)	$	(0.02)	$	(0.54)	$	(0.18)
	Earnings from discontinued
	operations		0.03		0.13		0.23		0.29
	Gain on sale of discontinued
	operations		1.00		-		0.99		-
	Cumulative effect of accounting
	change		-		-		-		(2.63)
	Net earnings (loss)	$	0.72	$	0.11	$	0.68	$	(2.52)
	Weighted average shares outstanding		111,208		113,692		112,654		113,494

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CROMPTON CORPORATION
Consolidated Balance Sheets
September 30, 2003 and December 31, 2002
(In thousands of dollars)
			September 30, 2003		December 31, 2002
ASSETS
	CURRENT ASSETS
	Cash	$	49,784	$	16,941
	Accounts receivable		200,651		183,329
	Inventories		394,508		353,556
	Other current assets		149,456		112,950
	Assets held for sale		-		392,887
	Total current assets		794,399		1,059,663
	NON-CURRENT ASSETS
	Property, plant and equipment		759,634		695,962
	Cost in excess of acquired net assets		421,059		584,633
	Other assets		471,212		500,557
		$	2,446,304	$	2,840,815
LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES
	Notes payable	$	6,114	$	3,694
	Accounts payable		242,484		268,593
	Accrued expenses		267,910		260,718
	Income taxes payable		120,319		116,111
	Other current liabilities		13,193		15,670
	Liabilities held for sale		-		29,273
	Total current liabilities		650,020		694,059
	NON-CURRENT LIABILITIES
	Long-term debt		780,274		1,253,149
	Postretirement health care liability		196,009		193,996
	Other liabilities		498,040		499,728
	STOCKHOLDERS' EQUITY
	Common stock		1,192		1,192
	Additional paid-in capital		1,044,871		1,048,304
	Accumulated deficit		(526,565)		(586,555)
	Accumulated other comprehensive loss		(119,617)		(200,426)
	Treasury stock at cost		(77,920)		(62,632)
	Total stockholders' equity		321,961		199,883
		$	2,446,304	$	2,840,815

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CROMPTON CORPORATION
Consolidated Statements of Cash Flows
Nine months ended 2003 and 2002
(In thousands of dollars)
				Nine Months Ended
Increase (decrease) to cash				2003		2002
CASH FLOWS FROM OPERATING ACTIVITIES
	Net earnings (loss)		$	76,983	$	(285,932)
	Adjustments to reconcile net earnings (loss) to net
	cash (used in) provided by operations:
		Cumulative effect of accounting change, net of tax		401		298,981
		Gain on sale of discontinued operations		(111,692)		-
		Loss on sale of business unit		-		34,705
		Loss on early extinguishment of debt		24,699		-
		Depreciation and amortization		105,534		112,222
		Equity income		(6,769)		(3,468)
		Changes in assets and liabilities, net:
		Accounts receivable		50,410		(4,178)
		Accounts receivable - securitization		(18,767)		9,723
		Inventories		10,047		36,430
		Accounts payable		(70,747)		(20,617)
		Other		(78,127)		(17,250)
	Net cash (used in) provided by operations			(18,028)		160,616
CASH FLOWS FROM INVESTING ACTIVITIES
	Proceeds from sale of businesses			643,115		80,000
	Capital expenditures			(55,104)		(60,534)
	Other investing activities			(250)		(1,039)
	Net cash provided by investing activities			587,761		18,427
CASH FLOWS FROM FINANCING ACTIVITIES
	Payments on long-term borrowings			(477,627)		(144,530)
	Proceeds (payments) on short-term borrowings			961		(22,837)
	Premium paid on early extinguishment of debt			(23,804)		-
	Dividends paid			(16,993)		(17,009)
	Treasury stock acquired			(22,080)		-
	Other financing activities			1,137		5,232
	Net cash used in financing activities			(538,406)		(179,144)
CASH
	Effect of exchange rates on cash			1,516		(655)
	Change in cash			32,843		(756)
	Cash at beginning of period			16,941		21,506
	Cash at end of period		$	49,784	$	20,750
Note -  Certain reclassifications have been made to the prior year to conform with this year's presentation,           including the classification of accounts receivable - securitization as part of net cash provided by           operations rather than as part of net cash provided by (used in) financing activities.

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CROMPTON CORPORATION
Segment Sales and Operating Profit (Loss) Third quarter and nine months ended 2003 and 2002
(In thousands of dollars)
			Third Quarter				Nine Months Ended
			2003		2002		2003		2002
NET SALES
Polymer Products
	Polymer Additives	$	311,204	$	285,030	$	907,340	$	839,941
	Polymers		74,685		67,197		213,150		207,152
	Polymer Processing Equipment		38,180		36,275		119,928		130,732
	Eliminations		(3,316)		(3,918)		(10,492)		(11,208)
			420,753		384,584		1,229,926		1,166,617
Specialty Products
	Crop Protection		77,861		66,656		209,822		189,666
	Other		60,575		56,696		184,314		254,224
			138,436		123,352		394,136		443,890
	Total net sales	$	559,189	$	507,936	$	1,624,062	$	1,610,507
OPERATING PROFIT
Polymer Products
	Polymer Additives	$	4,872	$	25,999	$	25,299	$	61,954
	Polymers		6,354		10,542		20,503		31,623
	Polymer Processing Equipment		(323)		(6,384)		1,737		(9,004)
			10,903		30,157		47,539		84,573
Specialty Products
	Crop Protection		16,979		15,154		50,833		50,239
	Other		(211)		1,798		(368)		7,409
			16,768		16,952		50,465		57,648
General corporate expense			(13,169)		(14,785)		(34,550)		(38,927)
Unabsorbed overhead expense from
Discontinued operations			(1,229)		(2,923)		(8,445)		(9,157)
Facility closures, severance and
Related costs			(10,566)		(4,420)		(14,071)		(10,800)
Antitrust legal and related costs			(5,385)		-		(26,260)		-
	Total operating profit (loss)	$	(2,678)	$	24,981	$	14,678	$	83,337

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CROMPTON CORPORATION				SUPPLEMENTARY SCHEDULE
Major Factors Affecting Results
Third quarter and nine months ended 2003 versus 2002
(In millions of dollars)
The following table summarizes the major factors contributing to the third quarter and nine month changes
in net sales and pre-tax loss from continuing operations versus the prior year:
		Third Quarter				Nine Months Ended
		Net		Pre-tax		Net		Pre-tax
		Sales		Loss		Sales		Loss
		Continuing		Continuing		Continuing		Continuing
		Operations		Operations		Operations		Operations
2002	$	507.9	$	(3.4)	$	1,610.5	$	(34.7)
2002 Facility closures, severance
and related costs		-		4.4		-		10.8
2002 Loss on sale of Industrial Specialties		-		-		-		34.7
		507.9		1.0		1,610.5		10.8
Divested - Industrial Specialties		-		-		(81.8)		(3.4)
Acquired - GE Specialty Chemicals		25.7		3.2		25.7		3.2
Unit volume/mix		13.4		4.6		14.8		(0.3)
Lower selling prices		(2.5)		(2.5)		(10.3)		(10.3)
Foreign currency translation		14.7		(1.2)		65.2		1.6
Costs savings		-		5.8		-		20.3
Raw materials/energy		-		(17.8)		-		(46.2)
Absorption variances		-		-		-		12.4
Legal and environmental		-		(2.5)		-		(14.0)
Interest expense		-		4.5		-		4.5
Other		-		(5.9)		-		(3.9)
		559.2		(10.8)		1,624.1		(25.3)
2003 Facility closures, severance
and related costs		-		(10.6)		-		(14.1)
2003 Antitrust legal and related costs		-		(5.4)		-		(26.3)
2003 Loss on early extinguishment
of debt		-		(24.7)		-		(24.7)
2003	$	559.2	$	(51.5)	$	1,624.1	$	(90.4)