SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549







                                    FORM 11-K



                                  ANNUAL REPORT
                        PURSUANT TO SECTION 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                      For the Year Ended December 31, 2001






                         Commission File Number 1-13953






                        W. R. GRACE & CO. HOURLY EMPLOYEES
                           SAVINGS AND INVESTMENT PLAN







                                W. R. GRACE & CO.
                                7500 GRACE DRIVE
                            COLUMBIA, MARYLAND 21044











                  W. R. GRACE & CO.
                  HOURLY EMPLOYEES
                  SAVINGS AND INVESTMENT
                  PLAN
                  DECEMBER 31, 2001 AND 2000





                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Participants and Administrative Committee of the
W. R. Grace & Co. Hourly Employees
Savings and Investment Plan

In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the W. R. Grace & Co. Hourly Employees Savings and Investment Plan (the
"Plan") at December 31, 2001 and 2000, and the changes in net assets available
for benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As further discussed in Note 1, effective December 31, 2001, the Plan merged
with and into the W. R. Grace & Co. Salaried Employee Savings and Investment
Plan.



/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Baltimore, Maryland
June 27, 2002


                                      -1-



W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------



                                                                               DECEMBER 31,
                                                                        2001                2000

                           ASSETS
                                                                                  
Interest in W. R. Grace & Co. Savings Plan Master                   $       -            $28,250,405
    Trust
Contributions receivable                                              259,259                129,639
                                                                    ---------            -----------
             Total assets                                             259,259             28,380,044
                                                                    =========            ===========



                    LIABILITIES AND NET ASSETS

Liabilities
    Due to Salaried Plan                                             (259,259)                     -
                                                                    ---------            -----------
             Total liabilities                                       (259,259)                     -
                                                                    ---------            -----------
Net assets available for benefits                                   $       -            $28,380,044
                                                                    =========            ===========








   The accompanying notes are an integral part of these financial statements.


                                      -2-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------



                                                                                        FOR THE YEAR ENDED
                                                                                            DECEMBER 31,
                                                                                     2001                  2000
                                                                                                 
ADDITIONS
    Additions to net assets attributable to
      Contributions
        Participants                                                            $  4,781,433           $  4,190,358
        Employer                                                                   2,932,733              1,465,636
                                                                                ------------           ------------
                                                                                   7,714,166              5,655,994
                                                                                ------------           ------------

Interest in income (loss) of W. R. Grace & Co. Savings
Plan Master Trust
    Interest and dividends                                                         1,202,027              1,841,410
    Net depreciation (see Note 3)                                                 (4,292,375)           (12,465,429)
                                                                                ------------           ------------
                                                                                  (3,090,348)           (10,624,019)
                                                                                ------------           ------------
             TOTAL                                                                 4,623,818             (4,968,025)
                                                                                ------------           ------------

DEDUCTIONS
    Deductions from net assets attributable to
      Participant withdrawals                                                      2,027,434              2,061,564
      Administrative expenses                                                         46,110                 38,191
                                                                                ------------           ------------
             TOTAL                                                                 2,073,544              2,099,755
                                                                                ------------           ------------

NET INCREASE (DECREASE) PRIOR TO TRANSFERS (TO) FROM
OTHER PLANS                                                                        2,550,274             (7,067,780)

      Net transfers (to) from other plans                                        (30,930,318)               209,012
                                                                                ------------           ------------

NET DECREASE                                                                     (28,380,044)            (6,858,768)

NET ASSETS AVAILABLE FOR BENEFITS
    Beginning of year                                                             28,380,044             35,238,812
                                                                                ------------           ------------

    END OF YEAR                                                                 $          -           $ 28,380,044
                                                                                ============           ============



   The accompanying notes are an integral part of these financial statements.

                                      -3-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.    DESCRIPTION OF THE PLAN

      The following description of the W. R. Grace & Co. Hourly Employees
      Savings and Investment Plan ("Plan" or "Hourly Plan") provides only
      general information. Participants should refer to the text of the Plan,
      the Summary Plan Description, and the Prospectus Supplement for the Plan
      for more complete information.

      GENERAL

      On April 2, 2001, W. R. Grace & Co. ("Grace") and 61 of its U.S.
      subsidiaries and affiliates (collectively, the "Company") filed voluntary
      petitions for reorganization under Chapter 11 of the United States
      Bankruptcy Court for the District of Delaware. The United States
      Bankruptcy Court in Wilmington, Delaware approved on April 2, 2001 an
      order which authorized, but did not direct, the debtors and debtors in
      possession under the bankruptcy filing to pay, in their sole discretion,
      employee benefits, including employer contributions under the Plan. Under
      the Court's authorization, Grace has continued to meet its obligations
      under the Plan. Should the Plan terminate as a result of the bankruptcy
      filing, Company contributions would cease and the net assets of the Plan
      would be distributed in accordance with the provisions of the Plan
      document.

      The Plan is a defined contribution plan originally adopted effective
      January 1, 1987, and has been amended from time to time. The Plan is
      subject to certain provisions of the Employee Retirement Income Security
      Act of 1974 ("ERISA").

      Effective December 31, 2001, the Plan was merged with and into the W. R.
      Grace & Co. Salaried Employees Savings and Investment Plan ("Salaried
      Plan"). Effective on the date of the merger $34,303,697 was transferred
      from the Plan to the Salaried Plan. On January 1, 2002, the Salaried Plan
      was renamed the W. R. Grace & Co. Savings and Investment Plan.

      Effective January 31, 2001, assets of the ICI Americas Inc. Retirement
      Savings Plan (the "ICI Plan"), in the amount of $3,727,817, were
      transferred to the Plan. This amount represented the account balances of
      the participants of the ICI Plan who became Grace employees as a result of
      Grace's purchase of the hydroprocessing catalyst business of ICI.

      ELIGIBILITY AND VESTING

      Prior to the Plan's merger into the Salaried Plan, Grace and its
      subsidiaries designated as participating units in the Plan, any hourly
      employee in an eligible employment classification who had completed three
      months of service or, for periods prior to October 1, 2000, twelve months
      of employment (including 1,000 hours of service), were eligible to
      participate in the Plan, subject to certain exceptions and special
      provisions.

      A participant's interest (employee contributions, Company contributions
      and earnings thereon) in the Plan was always fully vested.

      PACKAGING TRANSACTION

      On March 31, 1998, a predecessor of Grace ("Old Grace") completed a
      transaction ("Packaging Transaction") in which its flexible packaging
      business ("Cryovac Business") was combined with Sealed Air Corporation
      ("Sealed Air"). As a result of the Packaging Transaction, for each share
      of common stock held, each shareholder of Old Grace common stock received:
      (a) one share of

                                      -4-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

      common stock of the "New W. R. Grace & Co." ("New Grace"), (b) .536 shares
      of common stock of Sealed Air and (c) .475 shares of convertible preferred
      stock of Sealed Air. As a result of the Packaging Transaction,
      approximately $5.0 million was transferred to the successor trustee. The
      common stock of Old Grace was canceled as a result of the Packaging
      Transaction.

      As part of the Packaging Transaction, all balances were required to be
      transferred out of the Sealed Air Common Stock Fund and the Sealed Air
      Preferred Stock Fund and into other Plan investment options by December
      31, 2000. Remaining balances not transferred by December 31, 2000 were
      liquidated and transferred to the Fixed Income Fund.

      CONTRIBUTIONS

      Each year, participants could elect to contribute to the Plan 2% to 16% of
      their compensation (which, for purposes of the Plan, consists of regular
      wages, incentive compensation, and certain special bonus awards, shift
      differential and overtime pay).

      Participant contributions could be made from before-tax and/or after-tax
      income, as provided under Sections 401(k) and 401(m) of the Internal
      Revenue Code of 1986, as amended (the "Code"), subject to an annual dollar
      limit on before-tax contributions of $10,500 for 2001 and 2000. Federal
      income tax law limited the annual compensation on which tax-qualified plan
      benefits could be based to $170,000 for 2001 and 2000.

      Effective January 1, 2001 the Company contributed 100% of the first 6% of
      base compensation that a participant contributed to the Plan. Therefore,
      the maximum Company contribution was 6% of a participant's base
      compensation.

      Effective October 1, 2000 the Company contributed 75% of the first 6% of
      base compensation that a participant contributed to the Plan. Prior to
      October 1, 2000 the Company contributed 50% of the first 6% of base
      compensation. Therefore, effective October 1, 2000 the maximum Company
      contribution was 4.5% of each participant's compensation, subject to the
      annual dollar limitations noted above. Prior to October 1, 2000 the
      maximum Company contribution was 3%.

      The Plan offered 26 mutual funds, Company common stock account and a
      Fixed Income Fund comprised principally of guaranteed investment
      contracts as investment options for participants.

      Effective January 1, 2001, matching Company contributions were allocated
      to investment options in accordance with the participant's contribution
      investment election. Prior to January 1, 2001, Company contributions were
      generally credited to the ESOP, which was invested in New Grace common
      stock. The ESOP was an Employee Stock Ownership Plan, within the meaning
      of the Code.

      Effective October 1, 2000 participants could, at any time, elect to
      transfer all or a portion of their Company contributions from the ESOP to
      any of the other funds. Such transfers could be in whole dollar amounts or
      multiples of 5% of the participant's account balance.

      The Plan provided that a statement of each participant's account be sent
      to the participant at least once a year. Such statements were sent shortly
      after the end of each calendar quarter.

      Effective January 1, 2001, on any business day, participants could
      allocate their contributions among any of the investment options and
      transfer the amounts related to their prior contributions in any of

                                      -5-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

      the investment options to other investment options. All investment options
      were participant-directed. Prior to January 1, 2001, all investment
      options were participant-directed, except for the ESOP. Transfers could be
      in whole dollar amounts or in multiples of 5% of the participant's account
      balance.

      PARTICIPANT ACCOUNTS

      Each participant's account was credited with the participant's
      contribution, the applicable allocation of the Company's contribution and
      an allocation of Plan earnings (losses) and charged with an allocation of
      administrative expenses. Allocations were based on participant earnings or
      account balances, as defined. The benefit to which a participant was
      entitled was the benefit that could be provided from the participant's
      account.

      Prior to December 31, 2001, transfers between the Hourly Plan and the
      Salaried Plan occurred from time to time when the participant
      classification changed from hourly to salaried and vice versa. Effective
      December 31, 2001, the Plan assets were merged with and into the Salaried
      Plan.

      PARTICIPANT LOANS

      Participants could borrow up to one-half of the value of their account
      balance up to $50,000. Loans were for a term of one to five years for a
      general purpose loan and up to twenty years for a loan to purchase a
      principal residence. The interest rate for the loans was fixed for the
      term of the loan and the loans were repaid in periodic installments
      depending on the loan provisions. Participants could repay the outstanding
      loan balance in full at any time without penalty. Loans were considered to
      be in default and treated as a distribution for tax purposes if no payment
      was received for ninety days. If employment with the Company ended, any
      outstanding loan balance was considered a distribution if not repaid
      within ninety days.

      Interest paid on loans was credited to the individual investment options
      from which the loan was taken.

      PAYMENT OF BENEFITS

      Upon disability, retirement, or other termination of service, an
      individual could elect to receive his/her vested benefit in the form of a
      single lump sum payment or annual or quarterly installment payments if the
      vested balance exceeded $5,000. For amounts less than $5,000, a single
      lump sum payment was made.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accounts of the Plan were maintained on the accrual basis of
      accounting, which is acceptable under U.S. Department of Labor Regulations
      and is in accordance with accounting principles generally accepted in the
      United States of America ("GAAP").

      INVESTMENT VALUATION AND INCOME RECOGNITION

      Investments in publicly traded securities and mutual funds were stated at
      fair value. Investments in publicly traded securities were valued at the
      last reported sales price on the last day of the year. Shares of mutual
      funds were valued at the net asset value of shares held by the Plan at
      year end. Investments in guaranteed investment contracts held in the Fixed
      Income Fund (see Note 5) were


                                      -6-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

      stated at contract value, which represented contributions made under the
      contract plus interest at the contract rate, less funds used for
      withdrawals. Participant loans were valued at cost, which approximated
      fair value.

      Purchases and sales of publicly traded securities were recorded on a
      trade-date basis. Dividends were recorded on the ex-dividend date.

      Prior to December 31, 2001, the assets of the Plan were commingled in the
      W. R. Grace & Co. Savings Plan Master Trust ("Master Trust") with the
      assets of the W. R. Grace & Co. Salaried Employees Savings and Investment
      Plan. The Master Trust is administered by The Fidelity Management Trust
      Company ("Fidelity" or "Trustee"). The participating plans had a specific
      interest in the Master Trust's net assets. Fidelity continues to serve as
      the Trustee for the surviving W. R. Grace & Co. Savings and Investment
      Plan.

      Income of each investment option was reinvested in that option, except
      that any dividends paid on shares of New Grace common stock held in
      the ESOP were paid to participants in cash within 90 days after the
      end of the calendar year in which the dividends were received. The
      ESOP dividends were not treated as income to the Plan or as
      distributions to participants. The Trustee managed the Grace Stock
      Fund and the ESOP by purchasing shares of New Grace common stock and
      by selling shares to the extent necessary to obtain cash for
      disbursements and transfers to the other funds. Investment management
      of the Fixed Income Fund and investment oversight of the Fidelity
      Mutual Funds were the responsibility of the Investment and Benefits
      Committee appointed by the Grace Board of Directors, or as delegated
      by that Committee.

      The Plan recorded a realized gain or loss on New Grace common stock
      distributed to participants in an amount equal to the difference between
      the market value at the distribution date and the average cost of the
      shares distributed. The cost of securities sold was determined on the
      basis of average cost, and a gain or loss was recorded equal to the
      difference between average cost and the sale price.

      The Plan presents in the Statement of Changes in Net Assets Available for
      Benefits the net appreciation (depreciation) in the fair value of its
      investments, which consisted of the realized gains or losses and the
      unrealized appreciation (depreciation) on those investments.

      PAYMENT OF BENEFITS

      The Plan recognized benefits when paid.

      Amounts transferred to successor trustees were deducted from the Plan's
      net assets upon the divestiture of, or discontinuance of participation by,
      a participating business unit.

      USE OF ESTIMATES

      The preparation of financial statements in conformity with GAAP requires
      the Plan Fiduciaries to make estimates and assumptions that affect the
      reported amounts of assets and liabilities on the date of the financial
      statements. Actual amounts may differ from the estimates used.


                                      -7-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

3.    INVESTMENTS

      The following presents investments that represent 5 percent or more of the
      Plan's net assets included in the Master Trust:



-------------------------------------------------------------------------------------------------------------------
                                                                                            DECEMBER 31,
                                                                                -----------------------------------
                                                                                         2001          2000
===================================================================================================================
                                                                                             

Guaranteed Investment Contracts (GICs)
    State Street Bank and Trust Co., 6.00%, various maturity dates                      $    -      $ 1,784,616

W. R. Grace common stock:
    Grace Common Stock Fund, 0 and 1,373,273 shares, respectively                            -        2,307,099
    Employee Stock Ownership Plan, 0 and 1,489,926 shares, respectively                      -        2,339,183 *

Fidelity Management Trust Company
    Fidelity Contrafund, 0 and 53,613 shares, respectively                                   -        2,636,163

    Fidelity Blue Chip Fund, 0 and 78,523 shares, respectively                                -       4,046,300

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


      * Nonparticipant-directed

      During 2001 and 2000, the Plan's investments held in the Master Trust
      (including gains and losses on investments bought and sold, as well as
      held during the year) depreciated in value by $4,292,375 and $12,465,429,
      respectively as follows:

      -------------------------------------------------------------------------
                                                    FOR THE YEAR ENDED
                                            -----------------------------------
                                                        DECEMBER 31,
      =========================================================================
                                                   2001               2000
      =========================================================================

      Mutual Funds                           $ (1,786,336)        $ (2,267,445)
      Common Stocks                            (2,506,039)         (10,043,242)
      Preferred Stock                                   -             (154,742)
                                            -----------------------------------
                                             $ (4,292,375)        $(12,465,429)
      =========================================================================


                                      -8-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

4.    GRACE COMMON STOCK

      Prior to October 1, 2000, Company contributions were credited to the
      ESOP account with limited diversification privileges. Complete
      diversification of the ESOP account became available to participants
      on October 1, 2000. Additionally, effective January 1, 2001, Company
      contributions could be directed to any of the available investment
      options. Therefore, as of January 1, 2001, the Plan's investments were
      entirely participant-directed. Information about the net assets and
      the significant components of the changes in net assets relating to
      the nonparticipant-directed investments as of December 31, 2000 and
      for the year then ended were as follows:

      --------------------------------------------------------------------------
                                                                  DECEMBER 31,
                                                                      2000
      --------------------------------------------------------------------------

      NET ASSETS
          Common Stocks                                        $      2,339,183
                                                               -----------------

      ==========================================================================
                                                              FOR THE YEAR ENDED
                                                               DECEMBER 31, 2000
      ==========================================================================
      CHANGES IN NET ASSETS
          Contributions                                         $     1,550,231
          Interest                                                       29,008
          Net depreciation                                           (5,871,425)
          Benefits paid to participants                                (345,770)
          Transfers to participant-directed investments              (1,001,976)
          Administrative expense                                        (22,658)
                                                               -----------------
                                                                $    (5,662,590)
      --------------------------------------------------------------------------

                                      -9-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

5.    GUARANTEED INVESTMENT CONTRACTS

      Investments in the participant-directed Fixed Income Fund consisted
      primarily of benefit-responsive guaranteed investment contracts ("GICs")
      issued by various insurance companies. The Plan's GICs were stated at
      contract value, which approximated fair value. Contract value included
      principal invested, plus earnings, less benefit payments and
      administrative expenses. Listed below is the Plan's specific interest in
      the investments in GICs held in the Master Trust:



------------------------------------------------------------------------------------------------------------------
                                                                  VALUE AT DECEMBER 31,
                                                             ---------------------------------
                    ISSUER                          RATE             2001             2000         MATURITY DATE
==================================================================================================================
                                                                                         
Metropolitan Life Insurance Co.                    6.94%     $         -        $   1,389,534         Mar-03

AEGON Institutional Markets                        6.87%               -              874,554         Dec-01
                                                   6.40%               -              651,095         Dec-02
                                                   6.13%               -              659,111         Mar-03

New York Life Insurance Co.                        6.63%               -              923,165         Jun-03
                                                   5.84%               -              128,585         Jun-01

John Hancock Mutual Life Ins. Co.                  7.02%               -            1,147,056         Jun-01

Pacific Mutual Life Insurance Co.                  6.87%               -              719,164         Jun-02
                                                   6.09%               -              892,052         various

State Street Bank and Trust Co.                    7.20%               -            1,784,616         various

Massachusetts Mutual                               6.98%               -              246,785         Dec-03

SEI Financial Management                           6.87%               -              420,444         various

Principal Life Insurance Co.                       6.10%               -              542,834         Sep-03

                                                             ---------------------------------
Total Contracts                                                        -           10,378,995

Commercial Paper                                                       -              396,073         various

                                                             ---------------------------------
TOTAL FIXED INCOME FUND                                       $        -        $  10,775,068
==================================================================================================================



                                      -10-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

6.    MASTER TRUST

      The Plan's investments were held in the Master Trust through December 31,
      2001, which was established for the investment of assets of the W. R.
      Grace & Co. Salaried Employees Savings and Investment Plan and the W. R.
      Grace & Co. Hourly Employees Savings and Investment Plan. Each
      participating retirement plan had a specific interest in the Master Trust.
      The assets of the Master Trust were held by the Trustee. Effective with
      the Plan merger with and into the Salaried Plan on December 31, 2001, the
      Plan had a 0% interest in the Master Trust at December 31, 2001. At
      December 31, 2000, the Plan's interest in the net assets of the Master
      Trust was approximately 6%.

      Contributions and benefit payments were specifically allocated to the
      operation of the appropriate plan. However, other plan income and expenses
      were allocated to the respective plans' participants using methods
      outlined in the Master Trust agreement. The record keeper of the Master
      Trust allocated trust income and expenses between the participants of the
      participating plans on a monthly basis in relation to the market value of
      each participant's account at the beginning of the month for each Master
      Trust investment account. The financial statements reflect the Plan's
      share of the Master Trust assets and activities using this allocation
      method.

      The following tables present the fair values of investments and investment
      income for the Master Trust Fund:



------------------------------------------------------------------------------------------------------
                                                                             DECEMBER 31,
                                                                  ------------------------------------
                                                                          2001               2000
======================================================================================================
                                                                                 
INVESTMENTS AT CONTRACT VALUE
              Guaranteed Investment Contracts                        $ 225,046,859      $ 229,327,189
INVESTMENTS AT COST
              Participant Loans                                          5,144,781          5,399,564
INVESTMENTS AT FAIR VALUE
              W. R. Grace & Co. Common Stock                            17,065,769         25,203,345
              Mutual Funds                                             184,608,222        222,857,757
                                                                  ------------------------------------
                                                                     $ 431,865,631      $ 482,787,855

======================================================================================================
                                                                        FOR THE YEAR ENDED
                                                                           DECEMBER 31,
                                                                  ------------------------------------
                                                                          2001                2000
======================================================================================================
INVESTMENT (LOSS) INCOME
              Interest and Dividends                                  $ 17,548,754       $ 39,640,311
NET DEPRECIATION IN FAIR VALUE OF INVESTMENTS
              W. R. Grace & Co. Common Stock                           (12,161,369)       (72,350,602)
              Mutual Funds                                             (31,007,165)       (46,582,806)
              Sealed Air Preferred Stock                                         -         (1,739,344)
              Sealed Air Common Stock                                            -         (2,244,019)
                                                                  ------------------------------------
                                                                     $ (25,619,780)     $ (83,276,460)
------------------------------------------------------------------------------------------------------



                                      -11-


W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

7.    RELATED PARTY

      Certain plan investments were shares of mutual funds managed by the
      Fidelity Management Trust Company. Fidelity was the trustee as defined by
      the Plan, and, therefore, these transactions qualified as
      party-in-interest transactions. Fees paid by the Plan for the investment
      management services amounted to $46,110 and $38,191 for the years ended
      December 31, 2001 and 2000, respectively.

      W. R. Grace & Co., as plan sponsor, is also a related party. Investments
      include shares of W. R. Grace common stock. At December 31, 2001 and 2000,
      the Plan held 0 and 2,863,199 shares, respectively, of Grace Common Stock.
      The fair value of the Grace Common Stock was $4,646,282 at December 31,
      2000. Purchases of $3,740,300 (4,028,921 shares) and $5,454,629 (1,723,315
      shares) and sales of $1,310,791 (1,232,398 shares) and $1,494,291 (391,859
      shares) of W. R. Grace common stock were made at the Plan level during
      2001 and 2000, respectively.

8.    FEDERAL INCOME TAXES

      On July 13, 1995, the Internal Revenue Service ("IRS") issued a letter
      stating that the Plan, as then in effect, was in compliance with the
      applicable requirements of the Code. The Plan has been amended since the
      issuance of this determination letter. However, the Plan fiduciaries
      believe that the Plan was designed and was operated in compliance with the
      applicable requirements of the Code. Therefore, the Plan fiduciaries
      believe the Plan continued to be qualified, and the related Trust
      continued to be tax exempt through December 31, 2001.


                                      -12-


                                   SIGNATURES


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

                                          W. R. GRACE & CO.
                                          HOURLY EMPLOYEES
                                          SAVINGS & INVESTMENT PLAN


                                          By: /s/ Brenda Gottleib
                                              ----------------------------------
                                              Brenda Gottleib
                                              Chairman, Administrative Committee


Date: June 27, 2002





                                                                      Exhibit 23

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-49705) of W. R. Grace & Co. of our report dated
June 27, 2002 relating to the financial statements of the W. R. Grace & Co.
Hourly Employees Savings and Investment Plan, which appears in this Form 11-K.



/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Baltimore, Maryland
June 27, 2002