Mark J. Costa
Chairman and Chief Executive Officer at Eastman Chemical
Sure. So just to step back for a second, and then I'll come to the durable question. When we look at the overall portfolio, durables is an important part of the portfolio, but it's not a huge part of the portfolio. And as you think about Eastman and its overall exposure from this sort of recession question, we've dramatically improved our portfolio, you can go all the way back to 10 years ago and how much you know, $3 billion of divest businesses that were commodity and $3.5 billion of specialties added and all the innovation that we've been talking about for the last eight years and how we've improved the portfolio or divesting $1 billion of revenue in ASP that was you know, businesses that are not performing well. And so that gets us now to an end market portfolio that's quite improved.
So when you look stable markets. And we think about 45% of our revenue is in what we call stable as like medical, personal care, consumables, animal nutrition, water treatment, etc. Then you have about 20% in transportation and energy, which actually has offside going into this year and next. And then you get to B&C and consumer durables where we have sort of this sort of market demand sensitivity and risk and about half of that is durables, right? So we're talking about 15% of the total corporate revenue.
And that is a place where it's predominantly two places where we go into consumer durables, mostly specialty plastics. That's our Tritan that would be going into a Cuisinart or a Ninja blender or any of those sort of typical appliances that you would think about, as well as electronics, where we have some of our cellulosic's.
And so its high-value business, but it's also a place where we have tremendous innovation, creating our own growth, especially as we go into next year with all the new content, the recycled content that we're adding.
So you got to sort of - for sure, we're seeing demand come off in those markets, as you can hear, Walmart, Target, etc., destocking, but already hit that. The demand was well in excess of our capabilities. So some of that's actually not a lost volume in the forecast. It's just the backlogs going away, if you will. But there will be some moderation in that business.
And then there's some of it in the coatings business where we have you know, coatings to go into all those different types of products as well, and we'll see some softness in that business. And so that's where we see some sensitivity. B&C also has some risk to it.
I think it's another important thing to keep in mind about what happens in the back half of this year isn't just about primary demand. You've got or innovation, how you offset it, but there's also this question around how much destocking is going to occur.
And we don't think that there is going to be the same kind of bovid you would normally have going into a recession because supply chain constraints have really limited how much inventory could be built through the chain getting to the retailer, especially in markets like auto where clearly, they have no inventory at retail at the dealer level, and B&C also had its own challenges. And as I said, you've got markets rebuilding inventory like medical and aviation, as well as having upside growth and then you're back to this durable question.
So when we put it all together, there's certainly some demand risk and uncertainty. We're trying to factor that into our outlook. And we're really just trying to focus on what we control, continue to drive the innovation, keep driving the pricing on specialty, but be conscious about maintaining a good competitive position while you do that. And that will certainly improve spread to last year and give us a tailwind for next year and manage our costs as always and stay focused on the secure platforms and how we return cash to shareholders.