Sergey Frank has been the face and boss of Russian shipowner Sovcomflot (SCF Group) for 15 years, as the company has grown in size and status to take its place on the international shipping scene.
But last month, it was announced there would be a changing of the guard, with company vice president, chief operating officer and chief technical officer Igor Tonkovidov stepping into Frank’s shoes as the new president and chief executive of Sovcomflot.
The move undoubtedly heralds a new era for the state-run outfit as it embarks on what is its third strategic plan covering the 2019 to 2025 period.
But Frank, 59, will still be deeply engaged with the company he clearly loves and has followed since its inception in 1988, although his focus from now on will be on long-term strategy in his new role as non-executive chairman.
“My first assignment in Far Eastern Shipping Co in 1989 was to write a note to Fesco’s chief executive, Captain Victor Miskov, about the company’s shareholding in Sovcomflot,” Frank said, adding that from the start he has seen all the moves and changes for the organisation.
In the years since Frank has been with Sovcomflot, the company’s revenue, fleet, crew and shore-based personnel have all tripled.
Creating new markets
When he took over, contracted future net revenues were less than $500m — a figure that today has multiplied to $8.4bn with big name customers such as Shell, Total, Novatek and Gazprom counted among the company’s growing list of customers.
“I am very happy that we virtually did not make any aggressive speculative investments at all,” Frank said. “We created new markets and new trades. Just over the last decade, we put 250m tonnes of crude oil and 20m tonnes of LNG and LPG onto the market from new industrial projects.”
The spirit of being first and pioneering new technology is clearly deeply ingrained in the company's culture.
“If we are the second, we are losers,” Frank said. “It is important. If you don’t have the spirit in the system to be the leader, it is very difficult to expect great outcomes.”
Frank revealed that Tonkovidov was selected from several candidates. But it was the need for technical expertise in today’s maritime world that swung the vote his way.
“We see less demand for financial engineering or 'smart corporate structurings', but we simply need fantastic technical solutions for our projects and clients which we now have in our strategy,” Frank said. “So this leadership is of paramount importance.”
Frank said Tonkovidov was instrumental in developing Sovcomflot’s SCF — Safety Comes First — philosophy, culture and principles of work. The chairman added that the company’s LNG-fuelled aframaxes were, on the technical side, Tonkovidov's “creature”.
“For me, our Safety Comes First philosophy and commitment to environmental protection [remain] our pillars for the future,” Frank said. “He is the best man to deliver this.”
But Frank’s guiding hand on Sovcomflot may still be felt.
“I will continue to be a little bit of a headache for the new CEO and the management team for some time,” he said, adding that he will remain slightly more actively engaged than the average chairman.
Frank said there is no mystery in the management switch, with the succession being in line with what Sovcomflot must do as part of its corporate governance and succession planning.
However, he was a little more mysterious about any new role he might have outside the company, saying he is not ready to talk about it.
Frank is currently heading up a think tank of companies and organisations focused on the Northern Sea Route and this region has been a focus for him over the years.
He acknowledged there has been speculation about him taking on a lead role in one of the new joint ventures that he has formed with Novatek on Arctic shipping — Maritime Arctic Transport.
“I don’t have a plan to take any executive roles so far," he said. "I probably can do some helpful things for any Sovcomflot initiatives individually or with some SCF partners but on the strategic consultancy side.”
"It [Sovcomflot] is a fantastic company. It is a great privilege to work for it.”