A Full Court Appeal on Friday told Australia's biggest sugar milling company CSR that it can proceed with its planned separation of its sugar business from its building materials arm.

The decision was quickly welcomed by CSR executives. The firm will form a company named Sucrogen for soon-to-be created sugar business unit after the Full Court Appeal overturned a February 3 ruling of a lower court stopping CSR's demerger.

CSR described the lower court's decision as "containing errors in law," and welcomed the appeals court ruling.

In a statement sent to the Australian Stock Exchange, the CSR board said, "it will consider today's judgement", and it still thinks "that the separation of its two very different operating businesses will potentially create additional value for its shareholders."

CSR spokesman Martin Cole did not comment when asked if the decision will have any implications on the $1.75 billion offer from Chinese-government backed company Bright Food to acquire Sucrogen. Cole said that discussions with Bright Food are on going and "nothing changes," referring with the court decision.

Farmer's lobby group Canegrowers also expressed satisfaction with the decision because it would allow CSR to focus on its sugar business.

Speaking in Queensland, Canegrowers chief executive Ian Ballantyne said, "Our view of CSR has been for some time that because they act as a conglomerate, their focus has been on glass factories and asbestos claims more than on sugar, and a single sugar cane and energy business would be far better."

He said he would be meeting with Bright Food executives next week and he would inquire of the company's corporate governance.

Ballantyne is concerned that Bright Food is a company not focused on sugar and if Sucrogen would be sold to the Chinese company, the sugar industry in the region would suffer the same uncertainty.

"Are we going from the frying pan into the fire? That is, from one conglomerate with its eyes not totally on the sugar industry to another conglomerate with its eyes not totally on the sugar industry?," he said.