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                                                                                                Page 1 of 30 Pages

                                           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 Quarterly Period Ended March 31, 2003

         OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Transition Period from                         to                             .
                           ----------------------      ------------------------

Commission File Number 1-12658

                                               ALBEMARLE CORPORATION
                                               ---------------------
                               (Exact Name of Registrant as Specified in its Charter)

           VIRGINIA                                                                           54-1692118
 ------------------------------                                                             -----------------
(State or Other Jurisdiction of                                                             (I.R.S. Employer
Incorporation or Organization)                                                              Identification No.)

330 SOUTH FOURTH STREET
RICHMOND, VIRGINIA                                                                              23219
---------------------------------------                                                      ----------
(Address of Principal Executive Offices)                                                      (Zip Code)

                                  Registrant's telephone number, including area code - (804) 788-6000
                                            Registrant's website address: www.albemarle.com

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
           -----                                      -----

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

       Yes   X                                          No
           -----                                      -----
The Company makes available through its website, its annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments
to those reports as soon as reasonably practical after such material is
electronically filed with the Securities and Exchange Commission.

Number of shares of common stock, $.01 par value, outstanding as of April 30, 2003:
41,199,599



2

                                                                                  



                                ALBEMARLE CORPORATION

                                    I N D E X
                                                                                   Page
                                                                                  Number(s)

PART I.    FINANCIAL INFORMATION

  ITEM 1.  Financial Statements

               Consolidated Balance Sheets - March 31, 2003 and
               December 31, 2002                                                   3-4

               Consolidated Statements of Income - Three-
               Months Ended March 31, 2003 and 2002                                 5

               Consolidated Statements of Comprehensive Income - Three-
               Months Ended March 31, 2003 and 2002                                 6

               Condensed Consolidated Statements of Cash Flows - Three Months
               Ended March 31, 2003 and 2002                                        7

               Notes to the Consolidated Financial Statements                      8-15

  ITEM 2.  Management's Discussion and Analysis of Results
               of Operations and Financial Condition and Additional
               Information                                                         16-24

  ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk               24

  ITEM 4.  Controls and Procedures                                                  24

PART II.   OTHER INFORMATION

  ITEM 1.  Legal Proceedings                                                        24

  ITEM 4.  Submission to a Vote of Security Holders                                24-25

  ITEM 6.  Exhibits and Reports on Form 8-K                                         25

SIGNATURES                                                                          26

CERTIFICATIONS                                                                     27-30




3

PART I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars In Thousands)

                                                                                                           
                                                                                   March 31,                 December 31,
                                                                                     2003                       2002
                                                                                --------------            ----------------
                                                                                 (Unaudited)

ASSETS

Current assets:

Cash and cash equivalents                                                       $     40,287              $      37,636

Accounts receivable, less allowance for doubtful

    accounts (2003 - $2,592;  2002 - $2,368)                                         190,972                    197,089

Income tax receivable                                                                 11,083                          -

Inventories:

          Finished goods                                                             117,730                    116,164

          Raw materials                                                               21,751                     21,385

          Stores, supplies and other                                                  23,844                     23,256
                                                                                --------------            ---------------
                                                                                     163,325                    160,805

Deferred income taxes and prepaid expenses                                            18,686                     17,534
                                                                                --------------            ---------------

          Total current assets                                                       424,353                    413,064
                                                                                --------------            ---------------

Property, plant and equipment, at cost                                             1,520,768                  1,497,989

      Less accumulated depreciation and amortization                               1,004,535                    978,918
                                                                                --------------            ---------------

          Net property, plant and equipment                                          516,233                    519,071

Prepaid pension assets                                                               167,636                    166,287

Other assets and deferred charges                                                     56,862                     59,363

Goodwill                                                                              29,852                     29,621

Other intangibles, net of amortization                                                30,837                      5,550
                                                                                --------------            ---------------
Total assets                                                                    $  1,225,773              $   1,192,956
                                                                                ==============            ===============


                                See accompanying notes to the consolidated financial statements.

4


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars In Thousands)


                                                                                                         
                                                                                   March 31,                December 31,
                                                                                     2003                      2002
                                                                                ---------------           -----------------
                                                                                   (Unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

      Accounts payable                                                          $     81,977              $       75,092

      Long-term debt, current portion                                                    168                         343

      Accrued expenses                                                                61,266                      65,051

      Dividends payable                                                               11,044                       5,426

      Income taxes payable                                                            28,199                      19,095
                                                                                ---------------           -----------------
          Total current liabilities                                                  182,654                     165,007
                                                                                ---------------           -----------------
Long-term debt                                                                       184,408                     180,137

Postretirement benefits                                                               65,535                      64,943

Other noncurrent liabilities                                                          90,818                      82,139

Deferred income taxes                                                                130,676                     128,849

Minority interest in Stannica LLC                                                      1,719                       2,141

Shareholders' equity:

Common stock, $.01 par value, issued and outstanding-
41,197,010 in 2003 and 41,692,074 in 2002                                                412                         417

     Additional paid-in capital                                                           16                       2,286

     Accumulated other comprehensive loss                                             (1,264)                     (4,514)

     Retained earnings                                                               570,799                     571,551
                                                                                ---------------           -----------------
          Total shareholders' equity                                                 569,963                     569,740
                                                                                ---------------           -----------------
Total liabilities and shareholders' equity                                      $  1,225,773              $    1,192,956
                                                                                ===============           =================



                           See accompanying notes to the consolidated financial statements.


5


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     (In Thousands Except Per-Share Amounts)
                                   (Unaudited)

                                                                                                                   



                                                                                                     Three Months Ended
                                                                                                          March 31,
                                                                                           ------------------------------------

                                                                                                    2003               2002
                                                                                           ----------------    -----------------

Net sales                                                                                  $        265,570     $        231,822

Cost of goods sold                                                                                  207,928              176,062
                                                                                           -----------------    ----------------
     Gross profit                                                                                    57,642               55,760

Selling, general and administrative expenses                                                         27,626               25,704

Research and development expenses                                                                     4,942                4,776

Special item                                                                                              -                  850
                                                                                           ------------------   ----------------

     Operating profit                                                                                25,074               24,430

Interest and financing expenses                                                                      (1,337)              (1,225)


Minority interest in Stannica LLC                                                                      (694)                   -

Other income, net                                                                                     4,267                  792
                                                                                           ------------------   -----------------

Income before income taxes                                                                           27,310               23,997

Income taxes                                                                                          4,096                7,199
                                                                                           ------------------   -----------------

Income before cumulative effect of a change in accounting                                            23,214               16,798
  principle

Cumulative effect of a change in accounting principle, net                                           (2,220)                  -

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

Net income                                                                                 $         20,994     $         16,798
                                                                                           ===================  =================
Basic earnings per share:

Income before cumulative effect of a change in accounting                                  $           0.56     $           0.39
  principle

Cumulative effect of a change in accounting principle, net                                            (0.05)                   -
                                                                                           -------------------  ------------------

Net income                                                                                             0.51                 0.39
                                                                                           =================== ===================
Diluted earnings per share:

Income before cumulative effect of a change in accounting                                 $            0.55    $            0.38
  principle

Cumulative effect of a change in accounting principle, net                                            (0.05)                   -
                                                                                          -------------------  -------------------
Net income                                                                                $            0.50    $            0.38
                                                                                          ===================  ===================

Cash dividends declared per share of common stock                                         $            0.28    $            0.13
                                                                                          ===================  ===================


                                   See accompanying notes to the consolidated financial statements.

6


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                             (Dollars In Thousands)
                                   (Unaudited)


                                                                                                              



                                                                                               Three Months Ended
                                                                                                   March 31,
                                                                                    --------------------------------------------
                                                                                            2003                    2002
                                                                                    ---------------------   --------------------

Net income                                                                             $        20,994          $      16,798

Other comprehensive income (loss), net of tax:

   Unrealized (loss) gain on securities available for sale                                         (18)                    27

   Foreign currency translation                                                                  3,268                   (951)
                                                                                    -------------------      -------------------

Other comprehensive income (loss)                                                                3,250                   (924)
                                                                                    -------------------      -------------------

Comprehensive income                                                                   $        24,244          $      15,874

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




                See accompanying notes to the consolidated financial statements.



7



                                               ALBEMARLE CORPORATION AND SUBSIDIARIES
                                          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (Dollars In Thousands)
                                                           (Unaudited)

                                                                                                                


                                                                                                Three Months Ended
                                                                                                     March 31,
                                                                                       --------------------------------------

                                                                                                  2003                 2002
                                                                                       -----------------     ----------------
Cash and cash equivalents at beginning of year                                           $       37,636       $       30,585
                                                                                       -----------------     ----------------

Cash flows from operating activities:

  Net income                                                                                     20,994               16,798
  Cumulative effect of a change in accounting principle, net                                      2,220                    -
                                                                                       -----------------     ----------------
  Income before cumulative effect of a change in accounting principle                            23,214               16,798

  Adjustments to reconcile net income before cumulative effect of a change in
    accounting principle to cash flows from operating activities:
   Depreciation and amortization                                                                 20,138               20,269
   Working capital decrease excluding cash and cash equivalents                                  13,561                1,057
   Increase in income tax receivable                                                            (11,083)                   -
   Other, net                                                                                     3,331               (2,580)
                                                                                       -----------------     ----------------
      Net cash provided from operating activities                                                49,161               35,544
                                                                                       -----------------     ----------------

Cash flows from investing activities:
  Acquisition of assets                                                                         (27,020)                   -
  Capital expenditures                                                                           (8,857)              (8,182)
  Proceeds from liquidation of nonmarketable security                                             4,216                    -
  Investments in joint ventures and nonmarketable securities                                     (1,813)              (1,277)
  Restricted cash from industrial revenue bond proceeds                                               -                1,741
                                                                                       -----------------     ----------------
       Net cash used in investing activities                                                    (33,474)              (7,718)
                                                                                       -----------------     ----------------

Cash flows from financing activities:
  Proceeds from borrowings                                                                       42,033              100,099
  Repayments of long-term debt                                                                  (37,767)             (31,164)
  Purchases of common stock                                                                     (13,213)             (92,943)
  Dividends paid                                                                                 (5,918)              (5,918)
  Proceeds from exercise of stock options                                                             -                  445
                                                                                       -----------------     ----------------
      Net cash used in financing activities                                                     (14,865)             (29,481)
                                                                                       -----------------     ----------------
Net effect of foreign exchange on cash and cash equivalents                                       1,829                  568
                                                                                       -----------------     ----------------
Increase (decrease) in cash and cash equivalents                                                  2,651               (1,087)
                                                                                       -----------------     ----------------
Cash and cash equivalents at end of period                                               $       40,287      $        29,498
                                                                                       =================     ================



Supplemental noncash disclosures due to a cumulative change in accounting principle:
------------------------------------------------------------------------------------

    Increase in property, plant and equipment                                            $       (6,520)      $            -
    Increase in accumulated depreciation                                                          3,083                    -
    Increase in other noncurrent liabilities                                                      6,922                    -
    Decrease in deferred tax liabilities                                                         (1,265)                   -
                                                                                       -----------------     ----------------
    Cumulative effect of a change in accounting principle, net                           $        2,220       $            -
                                                                                       =================     ================


                                              See accompanying notes to the consolidated financial statements.


8



                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)

1.  In the  opinion  of  management,  the  accompanying  consolidated  financial
statements of Albemarle  Corporation and its  subsidiaries  ("Albemarle" or "the
Company")  contain all  adjustments  necessary for a fair  presentation,  in all
material respects, of the Company's  consolidated financial position as of March
31, 2003,  and December 31, 2002,  the  consolidated  results of operations  and
comprehensive income for the three-month periods ended March 31, 2003, and 2002,
and condensed  consolidated  cash flows for the three-month  periods ended March
31, 2003, and 2002. All adjustments are of a normal and recurring nature.  These
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial  statements and notes thereto  included in the Company's
2002 Annual Report & Form 10-K as amended on May 12, 2003. The December 31, 2002
consolidated  balance sheet data was derived from audited financial  statements,
but does not include all disclosures  required by generally accepted  accounting
principles. The results of operations for the three-month period ended March 31,
2003, are not necessarily  indicative of the results to be expected for the full
year. Certain  reclassifications have been made to the accompanying consolidated
financial   statements   and  the  notes  thereto  to  conform  to  the  current
presentation.

2. Long-term debt consists of the following:

                                            March 31,               December 31,
                                              2003                       2002
                                        ------------                ------------

Variable-rate bank loans                $    167,495                $    163,015
Industrial revenue bonds                      11,000                      11,000
Foreign borrowings                             5,124                       5,470
Miscellaneous                                    957                         995
                                        ------------               -------------
    Total                                    184,576                     180,480
Less amounts due within one year                 168                         343
                                        ------------                ------------

    Long-term debt                      $    184,408                $    180,137
                                        ============                ============



3. Cost of goods sold includes  foreign  exchange  transaction  gains of $61 and
$791 for the three-month periods ended March 31, 2003 and 2002, respectively.

9


ALBEMARLE  CORPORATION  AND  SUBSIDIARIES
NOTES TO THE  CONSOLIDATED  FINANCIAL STATEMENTS
(In Thousands Except Share and Per-Share Amounts)
(Unaudited)

4. Basic and diluted  earnings per share for the three-month  period ended March
31, 2003 and 2002, are calculated as follows:


                                                                                                       

                                                                                        Three Months Ended March 31,
                                                                                        ----------------------------
                                                                                        2003                 2002
Basic earnings per share:                                                           ------------          ------------

Numerator:
----------
    Income before cumulative effect of a change in accounting                   $       23,214         $       16,798
       principle

    Cumulative effect of a change in accounting principle, net                          (2,220)                     -
                                                                                    ------------          ------------
    Income available to stockholders, as reported                               $       20,994         $       16,798
                                                                                    ============          ============


Denominator:
------------
  Average number of shares of common stock outstanding                                  41,496                 43,438
                                                                                    ============          ============


Basic earnings per share:
-------------------------
    Income before cumulative effect of a change in accounting                   $         0.56         $         0.39
       principle

    Cumulative effect of a change in accounting principle, net                           (0.05)                     -
                                                                                    ------------          ------------
    Basic earnings per share                                                    $         0.51         $         0.39
                                                                                    ============          ============

Diluted earnings per share:

Numerator:
----------
    Income before cumulative effect of a change in accounting
       principle                                                                $       23,214         $       16,798

    Cumulative effect of a change in accounting principle, net                          (2,220)                     -
                                                                                    ------------          ------------
    Income available to stockholders, as reported                               $       20,994         $       16,798
                                                                                    ============          ============


Denominator:
------------
    Average number of shares of common stock
       outstanding                                                                      41,496                 43,438

    Shares issuable upon exercise of stock
       options and other common stock equivalents                                          790                    752
                                                                                    ------------          ------------
    Total shares                                                                        42,286                 44,190
                                                                                    ============         =============

Diluted earnings per share:
---------------------------
    Income before cumulative effect of a change in accounting principle         $         0.55         $         0.38

    Cumulative effect of a change in accounting principle, net                           (0.05)                     -
                                                                                    ------------         -------------
    Diluted earnings per share                                                  $         0.50         $         0.38
                                                                                    ============         =============


10

ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands Except Share and Per-Share Amounts)
(Unaudited)

5. The following table reflects the changes in consolidated shareholders' equity
from December 31, 2002 through March 31, 2003:

                                                                                                       
                                                                                    Accumulated                         Total
                                                                    Additional         Other                            Share-
                                              Common Stock            Paid-In      Comprehensive       Retained        holders'
                                        Shares          Amounts       Capital           Loss           Earnings         Equity
-----------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 2002            41,692,074    $     417    $      2,286     $    (4,514)       $   571,551     $  569,740

Net income                                                                                                  20,994         20,994

Foreign currency translation, net                                                         3,268                             3,268

Change in unrealized (loss) on
   marketable equity securities, net                                                        (18)                              (18)

Cash dividends declared                                                                                    (11,536)       (11,536)

Shares purchased and retired             (528,600)           (5)         (2,998)                           (10,210)       (13,213)

Issuance of incentive award stock          33,536                           728                                               728
                                     --------------   ------------   -----------    --------------     -------------   ------------
Balance at March 31, 2003              41,197,010     $     412     $        16     $    (1,264)       $   570,799     $  569,963
                                     ==============   ============   ===========    ==============     =============   ============




6. Cash  dividends  declared  for the  three-month  period  ended March 31, 2003
totaled 28 cents per  share,  which  included  a dividend  of 14 cents per share
declared on January 31, 2003, payable on April 1, 2003, as well as a dividend of
14 cents per share declared March 26, 2003, payable July 1, 2003.

7. The significant  differences  between the U.S.  Federal  statutory income tax
rate on pretax  income and the  effective  income  tax rate for the  three-month
periods ended March 31, 2003 and 2002, respectively, are as follows:
                                        ----------------------------------------
                                               Three Months Ended March 31,
                                        ----------------------------------------
                                           2003                           2002
                                        ---------                      ---------

Federal statutory rate                     35.0 %                         35.0 %
ETI benefit                                (2.4)                          (2.4)
State taxes, net of federal tax benefit     1.0                            1.0
Depletion                                  (1.9)                          (1.9)
Other                                      (0.3)                          (1.7)
Internal Revenue Service settlement       (16.4)                             -
                                        ---------                      ---------

Effective income tax rate                  15.0 %                         30.0 %
                                        =========                      =========

11


ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands Except Share and Per-Share Amounts)
(Unaudited)

In March 2003,  the Company  recorded a  receivable  for an income tax refund of
$11,083. The refund related to the Internal Revenue Service's examination of the
Company's  1996  and 1997 tax  returns.  The net  effect  of the  refund  on the
consolidated statement of income for the period ended March 31, 2003 amounted to
$7,092 or 17 cents per diluted share, including interest of $4,113 ($2,620 after
income  taxes) and a refund of $6,970,  offset by the reversal of a deferred tax
asset previously recognized, totaling $2,498.

8. On January 21, 2003, Albemarle acquired Ethyl Corporation's  ("Ethyl's") fuel
and  lubricant  antioxidants  working  capital,  patents and other  intellectual
property for approximately  $27,020. In addition,  Albemarle will pay to Ethyl a
total of $2,500 in additional  consideration during 2003 if Ethyl's purchases of
antioxidant  products  from  Albemarle  and  Albemarle's  sales  of  antioxidant
products  to third  parties for fuel and  lubricant  additive  use meet  certain
specified performance criteria. A summary of the assets acquired and liabilities
assumed is as follows:

  Current assets                                                         $4,798
  Property, plant and equipment                                             300
  Other assets                                                              300
  Intangibles                                                            25,622
  Current liabilities                                                    (3,000)
  Noncurrent liabilities                                                 (1,000)
                                                                       ---------
  Net cash paid                                                          $27,020
                                                                       =========

9. During the first quarter of 2002, the Company continued its efforts to reduce
operating  costs through an  involuntary  separation  program that resulted in a
special charge of $850 ($541 after income taxes or 1 cent per share on a diluted
basis).  The program  impacted a total of 12 salaried  employees  throughout the
Company. The following table summarizes the total special charges related to the
2002 involuntary separation program:

                                                             Three Months Ended
                                                                 March 31, 2002
                                                            --------------------

  Total 2002 workforce reduction charge                                   $1,114

  Less: reversal of over accrual from
     prior years' accruals                                                   264
                                                            --------------------
  Net workforce reductions charged
     for 2002                                                             $  850
                                                            ====================


Approximately  $733 of the total workforce  accrual was paid in the period ended
March 31, 2002.

12
ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands Except Share and Per-Share Amounts)
(Unaudited)

10. During the first quarter  ended March 31, 2002,  the Company  recorded a net
charge of $2,000  ($1,274  after  income taxes or 3 cents per share on a diluted
basis) to cost of sales that related to the  discontinuance  of product  support
for and the withdrawal from a water  treatment  venture.  The Company's  balance
sheet at March 31, 2003,  included the accrual of a probable  insurance recovery
of $5,781 in other assets and deferred  charges and an accrual  totaling $500 in
accrued expenses.

11. On February 13, 2002, the Company completed the purchase of 4,000,000 shares
of its common  stock from Bruce C.  Gottwald  and his related  immediate  family
interests for an aggregate  price of $92,680.  At that time, the Company retired
the shares and  reduced  retained  earnings  by $40,979  after  eliminating  the
balance in additional paid-in capital. The Company's purchase price was 25 cents
per share  less  than the  weighted  average  trading  price for New York  Stock
Exchange  transactions  in Albemarle  common stock during the 10 business  days'
period  beginning  with the third  business day  following the  announcement  of
Albemarle's 2001 year-end earnings.

12. The Company has the following  recorded  environmental  liabilities at March
31, 2003 and December 31, 2002:

  Beginning balance at December 31,2002                            $     32,144
  Additions                                                                 385
  Expenditures                                                             (114)
  Foreign exchange                                                          635
  SFAS No. 143 reclassification                                          (4,053)
                                                                   -------------
  Ending balance at March 31, 2003                                 $     28,997
                                                                   =============

Recorded   liabilities   decreased   $3,147   primarily   as  a  result  of  the
reclassification of certain environmental  obligations  previously accounted for
under AICPA  Statement of Position  96-1 to other  noncurrent  liabilities  upon
adoption of Statement of Financial  Accounting  Standards  ("SFAS") No. 143. See
Footnote 13.

The amounts  recorded  represent  management's  best  estimate of the  Company's
future  remediation and other anticipated  environmental  costs relating to past
operations.  Although it is difficult to quantify the potential financial impact
of compliance with environmental protection laws, management estimates, based on
the latest available  information,  that there is a reasonable  possibility that
future  environmental  remediation  costs  associated  with the  Company's  past
operations,  in excess of amounts already recorded, could be up to approximately
$8,247 before income taxes, to be incurred over a period of time.  However,  the
Company  believes  that any sum it may be  required  to pay in  connection  with
environmental remediation matters in excess of the amounts recorded should occur
over a period of time and

13
ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands Except Share and Per-Share Amounts)
(Unaudited)

should not have a material adverse impact on its financial  condition or results
of  operations,  but  could  have a  material  adverse  impact  in a  particular
quarterly reporting period.

13. Company is a global  manufacturer  of specialty  polymer and fine chemicals,
currently  grouped  into two  operating  segments:  Polymer  Chemicals  and Fine
Chemicals.   The  operating   segments  were  determined   based  on  management
responsibility.  The Polymer Chemicals segment is comprised of flame retardants,
catalysts  and  polymer  additives.  The Fine  Chemicals  operating  segment  is
comprised  of  agrichemicals,   pharmachemicals,  fine  chemistry  services  and
intermediates  and  performance  chemicals.  Segment data includes  intersegment
transfers of raw materials at cost and foreign  exchange  transaction  gains and
losses,  as well as allocations for certain  corporate  costs. The corporate and
other  expenses  include  certain  corporate-related  items not allocated to the
reportable segments.

                                                                                                                  


                                                                           Three Months Ended March 31,
                                                     -------------------------------------------------------------------------------

                                                                     2003                                       2002
                                                     ------------------------------------       ------------------------------------

Summary of Segment Results                                Revenues              Income               Revenues             Income
---------------------------                          -----------------    ---------------       -----------------   ----------------

Polymer Chemicals                                    $     147,228        $     16,349          $     122,167       $      11,924

Fine Chemicals                                             118,342              13,387                109,655              16,308
                                                     -----------------    ---------------       -----------------   ----------------
   Segment totals                                    $     265,570              29,736          $     231,822              28,232
                                                     =================                          =================
Corporate and other expenses                                                    (4,662)                                    (3,802)
                                                                          ---------------                            ---------------
   Operating profit                                                             25,074                                     24,430

Interest and financing expenses                                                 (1,337)                                    (1,225)

Minority interest in Stannica LLC                                                 (694)                                         -

Other income, net                                                                4,267                                        792
                                                                          ----------------                          ----------------
Income before income taxes                                                $     27,310                              $      23,997
                                                                          ===============                           ================


14. Company adopted 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 on January  1,  2003.  At the time of  adoption,  the  Company
identified  certain  assets for which there are future  retirement  obligations.
These future obligations are comprised  primarily of the cost of closing various
facilities and of capping brine wells.  The cumulative  effect of this Statement
on the Company's consolidated  statements of income is reflected as a cumulative
effect of a change in  accounting  principle of $2,220,  net of taxes of $1,265.
The current quarter  depreciation and accretion  expense of $194 is reflected in
cost of goods  sold.  The  consolidated  balance  sheet  reflects  future  asset
retirement costs of $7,020,  including current quarter accretion of $98 in other
noncurrent liabilities,  related long-lived assets of $6,520 in property,  plant
and equipment and accumulated  depreciation of $3,179, including current quarter
depreciation of $96 in accumulated depreciation and amortization.

14

ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands Except Share and Per-Share Amounts)
(Unaudited)

15. The  Company  adopted  the  provisions  of the  Emerging  Issues  Task Force
("EITF") Issue No. 00-10,  "Accounting for Shipping and Handling Fees and Costs"
on January 1, 2003. The Company reclassified all costs incurred for shipping and
handling  from a  reduction  of net  sales  to cost  of  sales  for the  periods
reflected  herein.  The  presentation  of  prior  period  information  has  been
reclassified to conform to the current year  presentation.  On May 12, 2003, the
Company filed an amendment to its Form 10-K for the year 2002.  This change does
not have an effect on gross profit, operating profit or net income. Shipping and
handling costs reclassified totaled $8,352 and $7,194 for the three months ended
March 31, 2003 and 2002, respectively.

16. During January 2003, the FASB issued  Interpretation No. 46 ("FIN 46" or the
"Interpretation"),    "Consolidation   of   Variable   Interest   Entities,   an
Interpretation of ARB No. 51", which provides guidance on the identification of,
and financial  reporting  for,  entities over which control is achieved  through
means other than voting  rights;  such  entities are known as  variable-interest
entities ("VIEs"). This interpretation applies immediately to VIEs created after
January 31, 2003 and to VIEs in which an  enterprise  obtains an interest  after
that date. It applies the first fiscal year or interim  period  beginning  after
June 15,  2003,  to VIEs in  which a  Company  holds  interest  acquired  before
February 1, 2003. The Company will adopt this  Interpretation  effective July 1,
2003. The Company is evaluating the effect the  Interpretation  will have on the
Company's future financial statements.


15

ALBEMARLE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands Except Share and Per-Share Amounts)
(Unaudited)

17. SFAS No. 123,  "Accounting for Stock-Based  Compensation,"  ("SFAS No. 123")
encourages,   but  does  not  require,   companies  to  record  at  fair  value,
compensation cost for stock-based  employee  compensation plans. The Company has
chosen to continue to account for stock-based  compensation  using the intrinsic
value  method  prescribed  in  Accounting   Principles  Board  Opinion  No.  25,
"Accounting  for Stock Issued to Employees,"  ("APB Opinion No. 25") and related
interpretations. Under the intrinsic method, compensation cost for stock options
is measured as the excess,  if any, of the quoted  market price of the Company's
stock at the date of the grant over the amount an  employee  must pay to acquire
the stock. If compensation  cost had been determined  based on the fair value at
the grant date for awards made in 2003 and 2002 under the plans  consistent with
the method of SFAS No. 123,  the  Company's  net income and  earnings  per share
would have been reduced to the pro forma amounts indicated below:


                                                                                                                 

                                                                                                     Three Months Ended

                                                                                                          March 31,
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                  2003                  2002
                                                                                           -----------------------------------------

Income before cumulative effect of                                 as reported             $          23,214     $         16,798
   a change in accounting principle                                pro forma               $          22,763     $         16,367
====================================================================================================================================

Net income                                                         as reported             $          20,994     $         16,798
                                                                   pro forma               $          20,543     $         16,367
====================================================================================================================================

Basic earnings per share on                                        as reported             $            0.56     $           0.39
   income before cumulative effect
   of a change in accounting principle                             pro forma               $            0.55     $           0.38
====================================================================================================================================

Basic earnings per share on                                        as reported             $            0.51     $           0.39
   net income                                                      pro forma               $            0.50     $           0.38
====================================================================================================================================

Diluted earnings per share on                                      as reported             $            0.55     $           0.38
   income before cumulative effect
   of a change in accounting principle                             pro forma               $            0.54     $           0.37
====================================================================================================================================

Diluted earnings per share on                                      as reported             $            0.50     $           0.38
   net income                                                      pro forma               $            0.48     $           0.37
====================================================================================================================================


The  weighted  average  fair values of options  granted  during the  three-month
periods ending March 31, 2003 and 2002 were $7.77 and $10.74, respectively.  The
fair  value  of each  option  is  estimated  on the  date  of  grant  using  the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions  used for options  granted in the three  months ended March 31, 2003
and 2002,  respectively:  dividend yield 2.54% and 2.54%; expected volatility of
31.23% and 31.03%;  risk-free  interest  rate of 4.21% and 4.13%;  and  expected
lives of eight years.

16
ITEM 2.  Management's  Discussion  and  Analysis  of Results of  Operations  and
         Financial Condition and Additional Information
         ----------------------------------------------

The following is  management's  discussion  and analysis of certain  significant
factors  affecting the results of operations  of Albemarle  Corporation  and its
subsidiaries  ("Albemarle" or "the Company")  during the periods included in the
accompanying  consolidated  statements  of income and  changes in the  Company's
financial condition since December 31, 2002.

Some of the  information  presented in the following  discussion  may constitute
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation Reform Act of 1995. Such forward-looking  statements are based on the
Company's  current  expectations,  which  are in  turn  based  on the  Company's
reasonable  assumptions  within the bounds of its  knowledge of its business and
operations.  There  can be no  assurance,  however,  that the  Company's  actual
results  will not differ  materially  from the results and  expectations  in the
forward-looking  statements.  Factors that could cause actual  results to differ
materially  include,  without  limitation,  the timing of orders  received  from
customers,  the gain or loss of significant  customers,  competition  from other
manufacturers,  changes in the demand for the Company's  products,  increases in
the  cost of  products,  increases  in the  cost  of  energy  and raw  materials
(notably,  ethylene, chlorine and natural gas), changes in the Company's markets
in  general,  fluctuations  in  foreign  currencies,   changes  in  new  product
introductions  resulting in increases in capital project  requests and approvals
leading  to  additional  capital  spending,  changes  in laws  and  regulations,
unanticipated  claims or  litigation,  the inability to obtain current levels of
product  or  premises  liability  insurance  or the  denial  of  such  coverage,
political  unrest  affecting  the  global  economy  and  changes  in  accounting
standards.  The  Company  assumes  no  obligation  to provide  revisions  to any
forward-looking  statements  should  circumstances  change,  except as otherwise
required by securities and other applicable laws.

Results of Operations
First Quarter 2003 Compared with First Quarter 2002
---------------------------------------------------

Net sales for first  quarter  2003 of $265.6  million,  a record for the Company
since the sale of the olefins  businesses in March 1996,  were up 14.6% or $33.8
million from first quarter 2002 net sales of $231.8 million. The increase in net
sales was  primarily  due to the  favorable  impact of foreign  exchange  ($15.5
million),  higher shipments in flame retardants ($11.4 million), the addition of
the fuel  and  lube  additives  products  acquired  in  mid-January  from  Ethyl
Corporation  ($5.5  million)  and  increased  sales from the  Stannica LLC joint
venture ($5.0  million),  higher  shipments in pharma actives ($2.6 million) and
performance  chemicals  ($2.5 million),  offset,  in part by lower shipments and
unfavorable  pricing in catalysts and additives  ($5.3 million) and  unfavorable
pricing in performance chemicals($3.5 million).

The gross profit margin  decreased to 21.7% in first quarter 2003 from 24.1% for
the  corresponding  period in 2002.  First quarter 2003 operating  profit was up
2.6% or $0.6 million from first quarter 2002 operating  profit  primarily due to
favorable  manufacturing costs ($5.8 million),  higher shipments ($3.4 million),
the overall effects of foreign exchange ($3.0 million) and the absence of a $2.0
million  charge to costs of sales related to the  discontinuance  and withdrawal
from a water  treatment  venture in the 2002 period  offset,  in part, by higher
energy and raw material costs ($8.5 million) and lower pricing ($5.1 million).

17
Selling,   general  and  administrative   ("SG&A")  expenses  and  research  and
development ("R&D") expenses increased 6.9% or $2.1 million in the first quarter
of 2003 versus first  quarter  2002,  primarily  due to higher  employee-related
costs and outside services in the current period versus the  corresponding  2002
period and unfavorable impact of foreign exchange. As a percentage of net sales,
SG&A  expenses  and R&D  expenses  were 12.3% in 2003  versus  13.1% in the 2002
quarter.

Operating  Segments
Net sales by reportable  business  operating segment for the
first quarter period ended March 31, 2003 and 2002 are as follows:

                                                         Net Sales
                                                      (In Thousands)
                                          ------------------------------------

                                                 2003                  2002
                                          ---------------       --------------

     Polymer Chemicals                         $147,228              $122,167
     Fine Chemicals                             118,342               109,655
                                          ---------------       --------------
     Segment totals                            $265,570              $231,822
                                          ===============       ==============

Polymer  Chemicals'  net sales for the first quarter 2003  increased  20.5%,  or
$25.1 million,  from first quarter 2002 net sales. The increase is primarily due
to the favorable impact of foreign exchange ($8.9 million),  higher shipments in
flame retardants  ($11.4  million),  the addition of the fuel and lube additives
products  acquired in  mid-January  from Ethyl  Corporation  ($5.5  million) and
increased  sales from the Stannica LLC joint venture ($5.0 million)  offset,  in
part, by lower shipments and unfavorable prices in catalysts and additives ($5.3
million).

Fine  Chemicals' net sales for first quarter 2003 increased 7.9% or $8.7 million
from first quarter 2002.  The increase is primarily due to the favorable  impact
of foreign  exchange ($6.6  million),  higher  shipments in pharma actives ($2.6
million) and performance  chemicals ($2.5 million) and favorable  product mix in
fine chemistry  services and  intermediates  ($0.6 million) offset,  in part, by
lower pricing in performance chemicals ($3.5 million).

Operating profit by reportable  business operating segment for the first quarter
period ended March 31, 2003, and 2002 are as follows:

                                                      Operating Profit
                                                       (In Thousands)
                                          ------------------------------------
                                                 2003                  2002
                                          --------------       ---------------
     Polymer Chemicals                         $16,349               $11,924
     Fine Chemicals                             13,387                16,308
                                          --------------       ---------------
     Segment totals                             29,736                28,232
     Corporate and other expenses               (4,662)               (3,802)
                                          --------------       ---------------
     Operating profit                          $25,074               $24,430
                                          ==============       ===============

Polymer  Chemicals' first quarter 2003 segment  operating profit was up 37.1% or
$4.4 million from first quarter 2002  primarily  due to favorable  manufacturing
costs ($3.8 million),  the overall effects of foreign exchange ($3.0 million), a
reclassification  of bad debt expense from  Corporate and other  expenses in the
2002 period ($2.0 million) and higher shipments ($1.6

18
million)  offset,  in part, by  unfavorable  energy and raw material costs ($4.5
million) and lower pricing ($1.5 million).

Fine Chemicals'  first quarter 2003 segment  operating profit decreased 17.9% or
$2.9 million from first quarter 2002 primarily due to unfavorable energy and raw
material costs ($4.0 million) and lower prices ($3.6 million)  partially  offset
by the  absence  of a $2.0  million  charge  to costs of  sales  related  to the
discontinuance and withdrawal from a water treatment venture in the 2002 period,
higher  shipments  ($1.8  million)  and  favorable   manufacturing  costs  ($0.9
million).

Corporate  and other  expenses for the first  quarter of 2003 were up 22.6%,  or
$0.9 million from first quarter 2002, primarily due to a reclassification of bad
debt expense to Polymer Chemicals in the 2002 period ($2.0 million),  offset, in
part, by a $0.9 million first quarter 2002 workforce reduction charge.

Interest  and  Financing  Expenses
Interest and financing expenses for first quarter 2003 amounted to $1.3 million,
up $0.1 million from $1.2 million in first quarter 2002.

Other Income,  Net
Other income,  net for the first quarter 2003 amounted to $4.3 million,  up $3.5
million from the 2002 corresponding period. First quarter 2003 includes interest
income of $4.1 million  from the Internal  Revenue  Service  ("IRS")  income tax
settlement mentioned in Income Taxes below.

Income Taxes
First  quarter 2003 income taxes were lower  compared to the same period in 2002
primarily  due to an IRS income  tax  settlement  recorded  in March 2003 in the
amount of $7.1 million offset,  in part, by the reversal of a deferred tax asset
previously  recognized  of $2.5  million and income taxes of $1.5 million on the
interest  accrued on the tax  settlement.  Consequently,  the first quarter 2003
effective  income tax rate was 15.0%,  excluding the taxes  associated  with the
cumulative  effect of a change in accounting  principle  amount of $1.3 million,
down from 30.0% for the  corresponding  period in 2002.  The Company  expects to
maintain a tax rate between 30.0% and 31.0% for the remainder of 2003.


Financial Condition and Liquidity
---------------------------------

Cash and cash equivalents at March 31, 2003, were $40.3 million, representing an
increase of $2.7 million from $37.6 million at year-end 2002.

Cash flows  provided from operating  activities of $49.2 million,  together with
$42.0  million  of  proceeds  from   borrowings  were  used  to  purchase  Ethyl
Corporation's fuel and lubricant antioxidants working capital, patents and other
intellectual property for approximately $27 million, to cover repayment of debt,
purchase  approximately  500,000 shares of the Company's  common stock,  pay the
quarterly  dividend,  fund  capital  expenditures  and  increase  cash  and cash
equivalents  by $2.7 million.  The Company  anticipates  that cash provided from
operations  in the future  will be  sufficient  to pay its  operating  expenses,
satisfy debt-service obligations and make dividend payments.

19
The change in the Company's  accumulated other  comprehensive loss from December
31, 2002, was primarily due to net foreign currency translation adjustments, net
of related deferred taxes,  related  primarily to the  strengthening of the Euro
and Japanese Yen versus the U.S. Dollar.

The  noncurrent  portion of the  Company's  long-term  debt  amounted  to $184.4
million at March 31, 2002,  compared to $180.1  million at the end of 2002.  The
Company's  long-term  debt,  including the current  portion,  as a percentage of
total  capitalization  amounted  to 24.5% at March  31,  2003.  The  Company  is
guarantor of $21.6  million of long-term  debt, in the form of  commitments,  on
behalf of its 50-percent  owned joint venture  company,  Jordan Bromine  Company
Limited. The Company's long-term debt, including the guarantee,  as a percent of
total capitalization amounted to 26.6% at March 31, 2003.

The  Company's  capital  expenditures  in the first three months of 2003 were up
slightly from the same period of 2002. For the year,  capital  expenditures  are
forecasted to be greater than the 2002 level.  Capital spending will be financed
primarily with cash flow provided from  operations  with additional cash needed,
if any,  to be  provided  from debt.  The  amount  and timing of any  additional
borrowings will depend on the Company's specific cash requirements.

The  Company  is subject  to  federal,  state,  local and  foreign  requirements
regulating the handling,  manufacture and use of materials (some of which may be
classified  as  hazardous  or toxic  by one or more  regulatory  agencies),  the
discharge  of  materials  into  the   environment  and  the  protection  of  the
environment.  To the Company's knowledge, it currently is complying, and expects
to continue to comply,  in all material  respects  with  existing  environmental
laws, regulations, statutes and ordinances. Such compliance with federal, state,
local and foreign  environmental  protection laws is not expected to have in the
future a material effect on earnings or the competitive position of Albemarle.

Among other  environmental  requirements,  the Company is subject to the federal
Superfund law, and similar state laws, under which the Company may be designated
as a  potentially  responsible  party and may be liable for a share of the costs
associated with cleaning up various hazardous waste sites.


Additional Information
----------------------

Summary of Critical Accounting Policies:
----------------------------------------

Consolidation
The  consolidated  financial  statements  include the accounts and operations of
Albemarle Corporation and all of its majority-owned and controlled subsidiaries.
The Company applies the equity method of accounting for investments  between 20%
and 50% owned over which the Company has significant influence.  All significant
intercompany accounts and transactions are eliminated in consolidation. Minority
shareholder's   interest  in  controlled   subsidiaries  is  included  in  other
noncurrent  liabilities  in the  consolidated  balance  sheets  for the  periods
presented and in the consolidated statement of income for the period ended March
31, 2003.

20
Estimates and Assumptions
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts of revenues,  expenses,  assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements.  Listed below are the  estimates  and  assumptions  that the Company
considers to be significant in the preparation of its financial statements.

Allowance   for  Doubtful   Accounts  --  The  Company   estimates   losses  for
uncollectible  accounts based on the aging of receivables  and the evaluation of
the likelihood of success in collecting the receivables.

Recovery of  Long-Lived  Assets -- The  Company  evaluates  the  recovery of its
long-lived  assets on a segment  basis by  periodically  analyzing its operating
results  and  considering   significant   events  or  changes  in  the  business
environment.

Acquisition  Accounting  -- The Company  estimates  the fair value of assets and
liabilities when allocating the purchase price of an acquisition.

Income Taxes -- The Company  assumes the  deductibility  of certain costs in its
income tax filings and  estimates  the future  recovery of deferred  tax assets.

Legal Accruals -- The Company estimates the amount of potential  exposure it may
have with respect to litigation, claims and assessments.

Environmental  Remediation  Liabilities -- The Company estimates and accrues the
costs required to remediate a specific site depending on site-specific facts and
circumstances.  Cost  estimates to remediate each specific site are developed by
assessing  (i) the  scope of the  Company's  contribution  to the  environmental
matter,  (ii) the scope of the anticipated  remediation and monitoring plan, and
(iii) the extent of other parties' share of responsibility.

Insurance   Accruals/Receivables   --  The  Company   records  and  assumes  the
recoverability of insurance receivables and potential impact of insurance claims
based on the  Company's  estimates  after  considering  advice from in-house and
outside  legal  counsel as well as outside  consultants.

Actual results could differ  materially from the estimates and assumptions  that
the Company uses in the preparation of its financial statements.

Revenue  Recognition
Sales revenue is recognized when (1) ownership and all rewards and risks of loss
have been transferred to the buyer, (2) the price is fixed and determinable, and
(3)  collectibility is reasonably  assured.  Revenue from services is recognized
when performance of the services has been completed.

Property,  Plant and Equipment
Accounts include costs of assets constructed or purchased,  related delivery and
installation costs and interest incurred on significant  capital projects during
their construction  periods.  Expenditures for renewals and betterments also are
capitalized,  but  expenditures  for repairs  and  maintenance  are  expensed as
incurred. The cost and accumulated  depreciation applicable to assets retired or
sold are removed from the respective  accounts,  and gains or losses thereon are
included in income.  Depreciation  is computed  primarily  by the  straight-line
method based on the estimated useful lives of the assets.

The Company evaluates historical and expected undiscounted  operating cash flows
of the related business segments or fair value of property,  plant and equipment
to determine the future recoverability of any property, plant

21
and equipment recorded.  Recorded property,  plant and equipment is re-evaluated
on the same basis at the end of each accounting  period whenever any significant
permanent changes in business or circumstances  have occurred which might impair
recovery.

The costs of brine wells,  leases and royalty interests are primarily  amortized
over the estimated  average life of the field. On a yearly basis for all fields,
this approximates a units-of-production method based upon estimated reserves and
production volumes.

Pension Plans and Other  Postretirement  Benefits  Annual costs of pension plans
are  determined  actuarially  based  on  Financial  Accounting  Standards  Board
("FASB")   Statement  of  Financial   Accounting   Standard  ("SFAS")  No.  87,
"Employers' Accounting for Pensions" ("SFAS No. 87"). The Company's policy is to
fund U.S. pension plans at amounts not less than the minimum requirements of the
Employee  Retirement  Income  Security Act of 1974 and generally for obligations
under its foreign plans to deposit funds with  trustees  and/or under  insurance
policies.  Annual costs of other postretirement plans are accounted for based on
SFAS No. 106,  "Employers'  Accounting  for  Postretirement  Benefits Other than
Pensions." The policy of the Company is to fund post-retirement  health benefits
for retirees on a pay-as-you-go basis. There are significant assumptions used in
determining amounts including the discount rate, expected return on plan assets,
rate of  compensation  increase  and  assumed  health  care  trend  rate.  These
assumptions are based on the Company's estimates after considering advice from a
major actuarial consulting firm and using the consistent  application of certain
indexes.

Income Taxes
Deferred  income taxes result from temporary  differences in the  recognition of
income and expenses for financial and income tax reporting  purposes,  using the
liability or balance sheet method.  Such temporary  differences result primarily
from differences  between the financial statement carrying amounts and tax basis
of assets  and  liabilities  using  enacted  tax rates in effect in the years in
which the differences are expected to reverse.

Investments
The Company has  investments  in joint  ventures,  nonmarketable  securities and
marketable equity securities.  The majority of the Company's  investments are in
joint  ventures.  Since the  Company  has the  ability to  exercise  significant
influence  over the operating and  financial  policies of these joint  ventures,
they are  accounted  for using the equity  method of  accounting.  The Company's
share of the  investee's  (losses)  earnings  are  included in the  consolidated
statement of  operations  as a component of other income,  net.  Investments  in
marketable  securities are accounted for as  available-for-sale  securities with
changes in fair value included in "accumulated other  comprehensive loss" in the
shareholders' equity section of the consolidated balance sheets. Joint ventures'
and  nonmarketable  securities'  results for  immaterial  entities are estimated
based upon the overall performance of the entity where financial results are not
available on a timely basis.

Environmental Compliance and Remediation
Environmental   compliance   costs  include  the  cost  of   purchasing   and/or
constructing assets to prevent, limit and/or control pollution or to monitor the
environmental  status at various  locations.  These  costs are  capitalized  and
depreciated based on estimated useful lives. Environmental compliance costs also
include maintenance and operating costs with respect to

22
pollution prevention and control facilities and other administrative costs. Such
operating  costs are expensed as incurred.  Environmental  remediation  costs of
facilities used in current operations are generally  immaterial and are expensed
as incurred.

The Company accrues for  environmental  remediation  costs and  post-remediation
costs on an  undiscounted  basis at facilities or off-plant  disposal sites that
relate to existing conditions caused by past operations in the accounting period
in which responsibility is established and when the related costs are estimable.
In developing these cost estimates,  evaluation is given to currently  available
facts  regarding each site,  with  consideration  given to existing  technology,
presently  enacted laws and  regulations,  prior  experience in  remediation  of
contaminated  sites, the financial  capability of other potentially  responsible
parties and other factors,  subject to uncertainties  inherent in the estimation
process.  These  estimates are reviewed  periodically,  with  adjustments to the
accruals recorded as necessary.

Outlook
-------

Fine Chemicals
The increase in Fine  Chemicals' raw materials  costs that occurred in the first
quarter of 2003,  is likely to continue  into  fourth-quarter  2003.  During the
remainder of 2003,  the Company will likely face cost  pressures with respect to
the  Fine  Chemicals'  segment  that  will  gradually  subside  and  give way to
favorable comparative performance in the second half of the year.  Additionally,
second-quarter  2003,  will  include  a  larger  allocation  of  energy  and raw
materials  costs  compared  to  second-quarter   2002,  resulting  from  reduced
production  associated  with a third party  service  contract  at our  Pasadena,
Texas, site.

Looking  ahead to the  second  half of 2003,  the  Company  should  begin to see
improvements  in its results based upon  business  initiatives,  including  cost
reductions and price  increases that have been undertaken to meet the challenges
of this operating  environment.  The  performance of the Company's  agricultural
chemicals  products is seasonal,  and we expect the second half of 2003 to be an
improvement over the first half of the year.

In addition,  Albemarle  should continue to benefit from  penetration of its new
products into their  respective  markets,  and from improved  utilization of its
multi-purpose manufacturing assets. Currently, the Company is generating over 40
inquiries   per  month  for  new  business  in  fine   chemistry   services  and
intermediates.   The  pursuit  of  new  business  in  this  area  is  generating
significant positive changes in the Company's approach and is a key component of
its growth  plans in Fine  Chemicals.  This  initiative  requires  the sales and
marketing teams to continue to find new prospects for products that fit with the
Company's   manufacturing  assets.  Success  in  the  contract  development  and
manufacturing  aspect of Fine  Chemicals  is  measured by the number of products
that can be moved through the multiple stages of production.

Polymer  Chemicals
Volume  improvement in Polymer Chemicals for second quarter 2003 and thereafter,
particularly in flame retardants, will be dependent upon the economy. One of the
indicators  for this  segment in the  electronics  market is the  production  of
printed  wiring  boards,   reported  through  the  IPC--Association   Connecting
Electronics  Industries'(R)  "book-to-bill"  ratio.  While this number has moved
back  above a ratio of  one-to-one  for the  third  month  in a  row--indicating
bookings are greater than shipments--the overall number of bookings and

 23
shipments  continues  to  reflect  an  electronics  market  that is  seeking  to
equilibrate following a very strong 2000 and very weak 2001.

Flame-retardants'  production  is running at a high rate for many  products this
year. The Company began to see some success with price increases  toward the end
of last year which have  continued into the first half of 2003.  However,  these
increases have  compensated  for higher raw materials  costs only to this point.
Additionally,  energy costs have affected  flame  retardant  profitability,  and
provide yet another reason why the Company continues to announce price increases
as we enter the second  quarter.  China serves as an important  growth driver of
this business,  and the Sudden Acute Respiratory  Syndrome (SARS) outbreak could
slow  consumer  demand,  manufacturing  or  distribution  activities  that would
negatively  affect  flame  retardant  sales.  Transportation  in the  region  is
hampered due to SARS  quarantine  periods and may affect the Company's sales and
marketing efforts.

In catalysts and additives,  both our internal new product  development  and our
alliance and acquisition efforts reflect continuing improvement in the Company's
results  from  single-site  catalysis  products,  improved  performance  in  the
Stannica LLC joint venture and immediate  favorable results from the antioxidant
products acquired from Ethyl Corporation.  These new efforts,  combined with our
ongoing  success in managing the base business to broaden the  Company's  alkyl,
antioxidant,  and curative product lines, gives us confidence for a solid year's
performance.

Overview
The  resolution  of the  conflict  in Iraq is an  important  factor in the world
economy  as  well  as  Albemarle's   business.   The  Jordan   Bromine   Company
joint-venture  team at Safi,  Jordan,  has  continued  to  produce  bromine  and
derivatives  from the Dead Sea.  The  Company  looks  forward  to many  years of
fruitful and productive relationships with its Jordanian partners, and to taking
its place as an  increasingly  important  supply  source for these  products for
Europe and Asia.

Energy  costs,  primarily  related to natural  gas price  increases,  created an
additional  $3.5  million in costs in the first  quarter of 2003 versus the same
quarter in 2002.  While dramatic price  increases  have moderated  somewhat,  it
appears  certain  that the new price  levels will  continue to produce  negative
comparisons  into the second  half of 2003.  Each $1/MM BTUs price  increase  is
equal to a  $0.10/share  impact on Albemarle  annualized  earnings.  The Company
continues  to  address  this  issue  with cost  reductions  and price  increases
wherever possible. Foreign exchange impacts on Albemarle's operations, primarily
European currencies, have been offset by plant and other investments made in the
European  Community.  The Company  realizes  only  modest  effects of changes in
valuations of the U.S.  dollar against the Japanese yen for the most part, but a
weak dollar, as seen in recent weeks, does provide some positive effects.

In an effort to expand accounting  guidance that addresses when a company should
include in its financial  statements the assets,  liabilities  and activities of
another  entity,  the  Financial  Accounting  Standards  Board has  issued  FASB
Interpretation  No. 46,  Consolidation of Variable Interest Entities ("FIN 46").
Many   variable   interest   entities   have   commonly   been  referred  to  as
"special-purpose"  entities or "off-balance  sheet" structures.  FIN 46 may will
require the Company to  consolidate  the results of one or more of its alliances
and ventures  after  further  study by the  Company.  FIN 46 requires a variable
interest  entity to be  consolidated if that company is subject to a majority of
the risk of loss from the variable interest entity's activities

24
or entitled to receive a majority of the entity's  residual returns or both. The
consolidation  requirements  apply to entities  established prior to February 1,
2002,  beginning  with the first fiscal year or interim period that begins after
June 15, 2003.

Finally, the Company continues to generate good cash flow which will continue to
be used as follows.  First, the Company will invest in internal  development and
acquisitions to profitably grow the business. Second, dividends will continue to
be paid from cash flow from  operations.  Third, the value of the equity will be
reviewed   periodically  and  selected  stock  repurchases  will  be  made  when
opportunities are there to generate additional shareholder value.

Additional  information  regarding  the  Company,  its  products,   markets  and
financial   performance  is  provided  at  the  Company's   Internet  web  site,
www.albemarle.com.

ITEM  3.   Quantitative   and   Qualitative   Disclosures   About   Market  Risk
           ---------------------------------------------------------------------
There have been no  significant  changes in our interest  rate risk,  marketable
security price risk or raw material price risk from the information  provided in
our Form 10-K for the year ended December 31, 2002.

ITEM 4. Controls and Procedures
        -----------------------
Within the 90-day period prior to the filing of this report,  an evaluation  was
performed  under  the  supervision  and with the  participation  of  Albemarle's
management,   including  our  principal  executive  officer  and  our  principal
financial  officer,  of the  effectiveness  of the design and  operation  of our
disclosure  controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c)
under the  Securities  Exchange Act of 1934).  Based upon that  evaluation,  our
principal  executive officer and our principal  financial officer concluded that
the design and  operation  of these  disclosure  controls  and  procedures  were
effective for the first quarter  2003. No  significant  changes were made in our
internal  controls or in other  factors  that could  significantly  affect these
controls subsequent to the date of their evaluation.

Part II - OTHER INFORMATION
---------------------------

ITEM 1. Legal  Proceedings
        ------------------
The Company is involved from time to time in legal proceedings of types regarded
as common in the Company's businesses,  particularly  administrative or judicial
proceedings seeking remediation under environmental laws, such as Superfund, and
products liability litigation.

While it is not possible to predict or determine the outcome of the  proceedings
presently pending, in the Company's opinion they should not result ultimately in
any liability that is likely to have a material  adverse effect upon the results
of operations or financial condition of the Company on a consolidated basis.

ITEM 4.  Submission  to a Vote of  Security  Holders
         -------------------------------------------
At the  annual  meeting  of  shareholders  held on March 26,  2003,  there  were
41,606,530  shares of common stock  outstanding  and entitled to vote,  of which
37,722,155  were  represented  in person or by proxy.  The  voting  shareholders
elected  the  directors  nominated  in the Proxy  Statement  with the  following
affirmative votes and votes withheld:

 25

     Director                            Affirmative Votes        Votes Withheld
     --------                            -----------------        --------------
     Mark C. Rohr                           36,233,256                 1,488,899
     Lloyd B. Andrew                        28,707,185                 9,014,970
     Charles E. Stewart                     35,011,002                 2,711,153
     William M. Gottwald                    36,150,727                 1,571,428
     Seymour S. Preston III                 35,019,410                 2,702,745
     Floyd D. Gottwald, Jr.                 36,133,347                 1,588,808
     Richard L. Morrill                     36,323,906                 1,398,249
     Anne M. Whittemore                     28,456,825                 9,265,330
     John D. Gottwald                       36,152,967                 1,569,188

Shareholders  also approved the Albemarle  Corporation  2003  Incentive  Plan as
described  in the 2003  Proxy  Statement.  A copy of the Plan was filed with the
Securities and Exchange Commission along with the Company's Proxy Statement. The
Plan received  27,409,583  affirmative  votes,  5,117,713  negative votes,  with
673,679 abstentions and 4,521,180 broker non-votes.

The shareholders also approved the appointment of PricewaterhouseCoopers  LLP as
the Company's  auditors for 2003 with 34,214,900  affirmative  votes,  3,482,746
negative votes and 24,509 abstentions.


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

               (a)  Exhibits - none

               (b)  Reports on Form 8-K

                    The Company filed a Form 8-K on April 23, 2003, which
                    included the Company's earnings press release for the
                    quarter ended March 31, 2003.





26



                                   SIGNATURES

         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.


                                                           ALBEMARLE CORPORATION
                                                           ---------------------
                                                               (Registrant)




Date:  May 14, 2003                                By: /S/ ROBERT G. KIRCHHOEFER
                                                      --------------------------
                                                           Robert G. Kirchhoefer
                                          Treasurer and Chief Accounting Officer
                                                  (Principal Accounting Officer)

 27
CERTIFICATION  OF CHIEF  EXECUTIVE  OFFICER

I, Mark C. Rohr,  certify that:

1. I have reviewed this quarterly report on Form 10-Q of Albemarle Corporation;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly  report (the  "Evaluation  Date");  and c) presented in this quarterly
report our conclusions  about the  effectiveness of the disclosure  controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

28

Date: May 14, 2003

/S/ MARK C. ROHR
----------------
President and
Chief Executive Officer


29

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Paul F. Rocheleau,  certify that:

1. I have reviewed this quarterly report on Form 10-Q of Albemarle Corporation;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly  report (the  "Evaluation  Date");  and c) presented in this quarterly
report our conclusions  about the  effectiveness of the disclosure  controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

30

Date:  May 14, 2003

/S/ PAUL F. ROCHELEAU
----------------------
Senior  Vice President
and Chief Financial Officer