Michael F. Barry, Chairman, Chief Executive Officer and President, commented, "We are pleased with our second quarter results, especially in light of the substantial decline in volumes from last year due to the global economic crisis. The significant improvement in our earnings from the previous two quarters is primarily driven by our aggressive cost reduction actions and margin improvement. While we are encouraged by emerging signs of stability in our end markets, we believe the rebound in our end markets will be gradual, with only very modest volume increases occurring during the second half of the year."

Mr. Barry continued, "I am also very pleased with our strong cash generation in the quarter as our net debt-to-capital ratio is at its lowest level since the third quarter of 2003. With the high cash flow generation, we have reduced our debt levels by 20% since the beginning of the year, maintained our dividend, and continued to invest for the future -- an example being our Middletown, Ohio plant expansion."

Second Quarter Summary

Net sales for the second quarter were $102.3 million, down 35% from $158.2 million for the second quarter of 2008. The decrease in net sales was primarily due to volume declines in all of the Company's regions and market segments, as the global economic downturn continued to impact the Company. Volumes were down approximately 36%, which were partially offset by a favorable 6% increase in selling price and mix. Foreign exchange rate translation also decreased net sales by approximately 5%.

Gross margins were down approximately $8.7 million, or 20%, compared to the second quarter of 2008, reflective of the above- noted volume declines. The gross margin percentage of 35.2% represents a considerable improvement over both the 28.3% reported for the second quarter of 2008 and the 29.1% reported for the first quarter of 2009. This margin percentage expansion was primarily the result of the cost reduction actions taken, a more favorable raw material cost environment, and reduced automotive chemical management services revenue reported on a gross basis.

Selling, general and administrative expenses ("SG&A") decreased $8.1 million, or 22%, compared to the second quarter of 2008. Savings from the Company's restructuring programs, lower commissions, lower travel and entertainment expenses, and other cost savings measures accounted for more than 70% of the decline. Changes in foreign exchange rates accounted for the remainder.

The Company expects to incur CEO transition costs of $2.4 million for the full year 2009 and $1.0 million in 2010 related to the former CEO's supplemental retirement income plan. Costs incurred in the second quarter of 2009 totaled $1.2 million, or approximately $0.07 per diluted share, compared to $1.9 million, or approximately $0.12 per diluted share for the second quarter of 2008.

Other income for the second quarter of 2008 includes a net arbitration award of approximately $1.0 million, or approximately $0.04 per diluted share, related to litigation with one of the former owners of the Company's Italian subsidiary. The increase in net interest expense is primarily due to higher average interest rates and lower interest income.

Year-to-Date Summary

Net sales for the first half of 2009 were $200.8 million, down 34% from $305.9 million for the first half of 2008. As with the quarterly comparisons, the decrease in net sales was primarily due to volume declines in all of the Company's regions and market segments. Volumes were down approximately 34%, which were partially offset by a favorable 5% increase in selling price and mix. Foreign exchange rate translation also decreased net sales by approximately 5%.

Gross margins were down approximately $23.7 million, or 26.8%, compared to the first half of 2008, reflective of the above- noted volume declines. The gross margin percentage improved to 32.2% for the first half of 2009 from 28.9% for the first half of 2008. The margin percentage expansion from the first half of 2008 was primarily the result of the cost reduction actions taken, a more favorable raw material cost environment, and reduced automotive chemical management services revenue reported on a gross basis.

SG&A decreased $15.9 million, or 22%, compared to the first half of 2008. Savings from the Company's restructuring programs, lower incentive compensation, lower commissions, lower travel and entertainment expenses, and other cost savings measures accounted for more than 70% of the decline. Changes in foreign exchange rates accounted for the remainder.

Other income for the first half of 2009 includes a $1.2 million gain related to the disposition of land in Europe, while other income for the first half of 2008 includes the net arbitration award noted above. The increase in net interest expense is primarily due to higher average interest rates and lower interest income.

Balance Sheet and Cash Flow Items

The Company's net debt-to-total-capital ratio was 23%, compared to 32% as of December 31, 2008. The improvement in the Company's net debt-to-total-capital ratio was primarily due to year-to-date cash flows from operations of $26.8 million. Operating cash flow improved $18.6 million compared to the first quarter, largely due to reduced working capital balances.

During the second quarter, General Motors Corporation and Chrysler LLC, two of the Company's largest customers, filed for and subsequently emerged from bankruptcy. The Company's contracts with those customers were assumed by their successor companies. To date, the Company has received payments representing more than 85 percent of these pre-bankruptcy accounts receivable, and the Company has been notified that its remaining pre-bankruptcy invoices will be paid.

Quaker Chemical Corporation is a leading global provider of process chemicals, chemical specialties, services, and technical expertise to a wide range of industries -- including steel, automotive, mining, aerospace, tube and pipe, coatings and construction materials. Our products, technical solutions, and chemical management services enhance our customers' processes, improve their product quality, and lower their costs. Quaker's headquarters is located near Philadelphia in Conshohocken, Pennsylvania.

This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. A major risk is that the Company's demand is largely derived from the demand for its customers' products, which subjects the Company to downturns in a customer's business and unanticipated customer production shutdowns. Other major risks and uncertainties include, but are not limited to, significant increases in raw material costs, customer financial stability, worldwide economic and political conditions, foreign currency fluctuations, and future terrorist attacks such as those that occurred on September 11, 2001. Other factors could also adversely affect us. Therefore, we caution you not to place undue reliance on our forward-looking statements. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.

As previously announced, Quaker Chemical's investor conference call to discuss second quarter results is scheduled for July 30, 2009 at 3:30 p.m. (ET). Access the conference by calling 877-269-7756 or visit Quaker's Web site at http://www.quakerchem.com/ for a live webcast.

                        Quaker Chemical Corporation                        ----------------------------                 Condensed Consolidated Statement of Income                 ------------------------------------------                (Dollars in thousands, except per share data)       ---------------------------------------------------------------                                             (Unaudited)                                           ------------                              Three Months Ended       Six Months Ended                                  June 30,                 June 30,                            --------------------    ----------------------                                2009        2008        2009        2008                                ----        ----        ----        ----    Net sales                $102,335    $158,188    $200,842    $305,906    Cost of goods sold         66,298     113,402     136,091     217,485                              ------     -------     -------     -------    Gross margin               36,037      44,786      64,751      88,421          %                     35.2%       28.3%       32.2%       28.9%    Selling, general and    administrative    expenses                  29,050      37,153      55,747      71,657   Restructuring and    related charges                -           -       2,289           -   CEO Transition Costs        1,193       1,880       1,193       1,880                               -----       -----       -----       -----    Operating income            5,794       5,753       5,522      14,884          %                      5.7%        3.6%        2.7%        4.9%    Other income, net             356       1,687       1,810       1,848   Interest expense, net      (1,318)       (979)     (2,407)     (2,161)                              ------        ----      ------      ------   Income before taxes         4,832       6,461       4,925      14,571    Taxes on income             1,567       2,116       1,316       4,881                               -----       -----       -----       -----                               3,265       4,345       3,609       9,690    Equity in net income    of associated companies      227         187          85         299                                 ---         ---          --         ---    Net income                  3,492       4,532       3,694       9,989    Less: Net income    attributable to    noncontrolling interest      258         211         458         575                                 ---         ---         ---         ---    Net income    attributable to    Quaker Chemical    Corporation               $3,234      $4,321      $3,236      $9,414                              ======      ======      ======      ======          %                      3.2%        2.7%        1.6%        3.1%    Per share data:   ---------------     Net income      attributable to      Quaker Chemical      Corporation - basic      $0.29       $0.42       $0.29       $0.91     Net income      attributable to      Quaker Chemical      Corporation -      diluted                  $0.29       $0.41       $0.29       $0.90                     Quaker Chemical Corporation                   ----------------------------               Condensed Consolidated Balance Sheet               -------------------------------------    (Dollars in thousands, except par value and share amounts)    ----------------------------------------------------------                                              (Unaudited)                                             -----------                                          June 30,     December 31,                                           2009           2008                                           ----           ----   ASSETS    Current assets     Cash and cash equivalents          $24,605        $20,892     Construction fund (restricted      cash)                               6,384          8,281     Accounts receivable, net            86,675         98,702     Inventories, net                    43,405         57,419     Prepaid expenses and other      current assets                     10,759         15,532                                         ------         ------       Total current assets             171,828        200,826    Property, plant and equipment, net    61,463         60,945   Goodwill                              44,610         40,997   Other intangible assets, net           6,027          6,417   Investments in associated    companies                             7,904          7,987   Deferred income taxes                 37,023         34,179   Other assets                          38,735         34,088                                         ------         ------       Total assets                    $367,590       $385,439                                       ========       ========    LIABILITIES AND SHAREHOLDERS' EQUITY    Current liabilities     Short-term borrowings and      current portion of long-term      debt                               $2,692         $4,631     Accounts and other payables         43,755         51,341     Accrued restructuring and      related activities                    590          2,198     Accrued compensation                 7,325          7,741     Accrued pension and      postretirement benefits             4,919          7,380     Other current liabilities           13,826         10,573                                         ------         ------       Total current liabilities         73,107         83,864   Long-term debt                        68,699         84,236   Deferred income taxes                  8,348          7,156   Accrued pension and postretirement    benefits                             36,008         37,638   Other non-current liabilities         44,208         42,670                                         ------         ------       Total liabilities                230,370        255,564                                        -------        -------    Quaker shareholders' equity     Common stock, $1 par value;      authorized 30,000,000 shares;      issued 11,049,880 shares           11,050         10,833     Capital in excess of par value      26,210         25,238     Retained earnings                  115,254        117,089     Accumulated other comprehensive      loss                              (19,987)       (27,237)                                        -------        -------       Total Quaker shareholders'        equity                          132,527        125,923                                        -------        -------       Noncontrolling interest            4,693          3,952                                          -----          -----       Total shareholders' equity       137,220        129,875                                        -------        -------         Total liabilities and          shareholders' equity         $367,590       $385,439                                       ========       ========                              Quaker Chemical Corporation                           ----------------------------                 Condensed Consolidated Statement of Cash Flows                 -----------------------------------------------                        For the six months ended June 30,                        ---------------------------------                              (Dollars in thousands)                              ----------------------                                                               (Unaudited)                                                               -----------                                                               2009     2008                                                               ----     ----   Cash flows from operating activities     Net income                                              $3,694   $9,989     Adjustments to reconcile net income to net cash      provided by operating activities:       Depreciation                                           4,801    5,457       Amortization                                             522      606       Equity in net income of associated companies, net of        dividends                                               (85)    (299)       Deferred income tax                                                 -       Deferred compensation and other, net                  (1,521)   2,498       Stock-based compensation                                 927    1,762       Restructuring and related charges                      2,289        -       Gain on disposal of property, plant and equipment     (1,193)     (76)       Insurance settlement realized                           (610)    (685)       Pension and other postretirement benefits             (3,799)  (3,311)     Increase (decrease) in cash from changes in current      assets and current liabilities, net of acquisitions:       Accounts receivable                                   13,498    1,013       Inventories                                           15,022   (3,806)       Prepaid expenses and other current assets              3,481     (885)       Accounts payable and accrued liabilities              (6,354)  (4,146)       Change in restructuring liabilities                   (3,885)       -                                                             ------       --         Net cash provided by operating activities           26,787    8,117                                                             ------    -----    Cash flows from investing activities     Capital expenditures                                    (5,078)  (7,038)     Payments related to acquisitions                        (1,000)  (1,000)     Proceeds from disposition of assets                      1,617      117     Insurance settlement received and interest earned        5,100    5,178     Change in restricted cash, net                          (2,593) (13,818)                                                             ------  -------         Net cash used in investing activities               (1,954) (16,561)                                                             ------  -------    Cash flows from financing activities     Net decrease in short-term borrowings                   (1,716)  (1,488)     Proceeds from long-term debt                             1,584   10,000     Repayments of long-term debt                           (17,252)  (2,120)     Dividends paid                                          (5,022)  (4,550)     Stock options exercised, other                             262    7,628     Distributions to noncontrolling shareholders               (90)       -                                                                ---       --         Net cash (used in) provided by financing          activities                                        (22,234)   9,470                                                            -------    -----      Effect of exchange rate changes on cash                  1,114      949       Net increase in cash and cash equivalents              3,713    1,975       Cash and cash equivalents at the beginning of the        period                                               20,892   20,195                                                             ------   ------       Cash and cash equivalents at the end of the period   $24,605  $22,170                                                            =======  =======  

Quaker Chemical Corporation

CONTACT: Mark A. Featherstone, Vice President and Chief FinancialOfficer of Quaker Chemical Corporation, +1-610-832-4160

Web Site: http://www.quakerchem.com/

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