By: Patrick Raleigh UT On-line/news editorNorwalk, Connecticut-Despite higher costs, Arch Chemicals Inc.'s performance urethanes unit achieved better earnings and higher sales in 2003, compared to the previous year, Arch reported 10 Feb. However, the higher profit was mainly due to a $3-million insurance settlement in 2003, and was mostly offset by bad-debt expenses and rising raw material and energy prices. Urethane sector sales increased by about 10 percent on higher polyol volumes and higher Latin American sales, helped by increased economic and political stability in the region, said the company. Arch's urethanes business is the main component of the Norwalk-based group's recently formed Performance Products division. The division also includes the group's hydrazine business.For the Performance Products division as a whole, Arch reported sales of $39.7 million and operating income of $1.4 million. This compared with sales and operating income of $40.3 million and $2.6 million, respectively, in 2002. "