Would we approve of hunting Panda Bears or Siberian Tigers if their carcasses were used for high value products? No? So it seems strange that there is still a belief that if we could set up a value adding industry, all our problems with logging native forests and old growth would be over.
There is concern that if a large market was found, say overseas, for kiln dried hardwood (paneling or flooring), we could see the continuation of current clearfell logging, with the only difference being that the product would make more profit than woodchips do.
Using KD hardwood as flooring has a better return than house framing, but the market is still limited. Furniture making would be the top end of the market but the small demand for tables and lounge suites could support only a tiny fraction of the current industry.
As we are all aware, there only needs to be one sawlog in a coupe (sometimes none!) for the government to justify flattening and shredding the rest, calling it sawlog driven. They would use the existence of a value adding industry to help justify and continue clearfelling and woodchipping valuable forests.
Market realities rule
Native forest sawn timber has been losing market share to plantation wood since 1950. Whether as green framing timber or kiln dried. Much of what hardwood is sawn, is still low value construction or pallet timber.
What little is kiln dried is only one step up from green sawn timber and is directly competing with the 90% of plantation timber that is KD. There is only a very small niche for KD hardwood.
Information from the RFA says that only 11%, at best, of the native forest sawn timber market is sold as appearance grade timber. Unless it does sell to the top price market, all that kiln drying is doing to hardwood producers is upping the price of production with little return for the effort. Pine competes directly with most native timbers. The only reason mills have invested in kiln drying facilities is because of the encouragement of governments and the massive subsidies they operate under.